UK Social Security and Child Support Commissioners' Decisions

R(CS) 10/98


Mr. P. L. Howell QC CCS/12598/1996

7.10.97

Maintenance assessment - absent parent's police officer's rent allowance - whether to be included as earnings or excluded as expenses

Application for maintenance - parent with care's claim for income support unsuccessful - whether application for maintenance under section 6 of the Child Support Act 1991 effective

After an abortive claim for income support, a subsequent claim resulted in payment of that benefit. An application for child support maintenance was required by, and made under, section 6 of the Child Support Act 1991. A tribunal confirmed the assessment as validly made, notwithstanding that the original claim for income support had not resulted in entitlement to benefit, and gave various directions for a re-assessment. The absent parent appealed to the Commissioner on the grounds that (a) the Child Support Agency acted without jurisdiction; (b) the various allowances paid to the absent parent were incorrectly dealt with under paragraph 1 of Schedule 1 to the Child Support (Maintenance and Special Cases) Regulations 1992; and (c) the costs of a mortgage protection policy should not have been excluded from housing costs in the calculation of exempt income.

Held, allowing the appeal, that:

as to (a), section 6 of the Child Support Act 1991 operates to produce a fully effective claim for child support when income support is claimed or paid regardless of the outcome of the benefit claim;

as to (b), a balanced judgment on the facts is required as to the extent to which the expenses payments received do or do not fall within the "wholly, exclusively and necessarily" category when considering plain clothes allowance and standard allowances to cover out-of-pocket expenses;

applying Fitzpatrick v. CIR [1994] 1 WLR 306 the rent allowance was not paid in reimbursement of expenses actually incurred wholly, exclusively and necessarily in the performance of the duties of the officer's employment, so was to be included as earnings;

as to (c), premiums for the mortgage protection policy fall within paragraph 3(4) of Schedule 3 to the Child Support (Maintenance and Special Cases) Regulations 1992 and are allowable housing costs.

DECISION OF THE CHILD SUPPORT COMMISSIOMER

1. The decision of the tribunal given on 13 April 1995 dealt with a large number of points and was in my judgment in error in point of law on two of them only. I have therefore to set it aside but I exercise the power under s. 24(3) Child Support Act 1991 to substitute my own decision to the same practical effect apart from the two points. I refer the case to the child support officer for the assessment to be redetermined accordingly.
2. This case concerns the maintenance for two children now aged 17 and 15 who have lived with their mother since their parents' marriage broke up. She was on income support during the period material for the assessment. Their father has remarried and remains in full-time employment as a serving police officer.
3. I held an oral hearing of the father's appeal against the decision of the tribunal. He appeared by Anna Vigors of Counsel, instructed by Faulkners, and Rachel Perez of the DSS Solicitor's Office appeared for the child support officer. The children's mother did not appear at the hearing but sent in written submissions all of which I have taken into account. In addition to the submissions made at and before the hearing I have taken into account later written submissions by the parties dealing with Commissioners' decisions that were referred to at the hearing or came to light subsequently. To reduce the length of this decision I will refer to the various contentions only so far as necessary to explain the conclusions I have reached, though all have been taken into account.
4. The children's mother originally applied for a child support maintenance assessment on 21 April 1993, being required to do so as she was then making a claim for income support. She had previously been in receipt of income support and was at that time just about on the borderline of entitlement, having regard to her grant income as a student teacher and her housing costs which were fluctuating because of changes in the mortgage rates. As matters stood in April 1993 she turned out not to be entitled to the benefit and no further action was at that stage taken by the Secretary of State as regards her child support claim under s. 6 of the Child Support Act 1991. However, her circumstances changed again shortly afterwards and in June 1993 she made a further claim on the advice of the DSS and was awarded income support from 19 June 1993 onwards. On this occasion she was again required to make a child support maintenance application pursuant to s. 6(6) of the Act and on 19 June 1993 a maintenance enquiry form was issued to the children's father which resulted in the making of the assessments under appeal. As a court maintenance order was already in force the assessment which was first made on 27 September 1993 became legally effective under the regulations two days after that date, that is from 29 September 1993.
5. It is that assessment, as subsequently reviewed and modified, which was confirmed as valid by the tribunal on 13 April 1995 subject to the directions they gave as to recalculation of the amount. The children's father in this appeal challenges the legality of the whole assessment and also contends that the tribunal were wrong in various ways in the directions they gave about the calculation. The issues I have to determine on appeal are first whether the tribunal were right to reject the challenge to the whole assessment as having been made without jurisdiction, second whether they were correct in the way they dealt with various allowances paid to the father with his police pay, and third whether they were correct in directing the child support officer that the costs of a mortgage protection policy were not part of allowable housing costs in computing the father's exempt income under para. 3, Sch. 3, Child Support (Maintenance Assessments and Special Cases) Regulations 1992, SI 1992 No. 1815.
6. The first point is in my judgment completely unmeritorious though it occupies a large part of the paper submissions in the file and was maintained on the father's behalf by Miss Vigors in oral argument before me. It is founded on the transitional provisions for the introduction of the new child support system, which prescribed that where a child maintenance order was already in force no individual application for child support maintenance under s. 4 of the 1991 Act was to be made before a particular transitional date, in this case 8 April 1996: see Child Support Act 1991 (Commencement No. 3 and Transitional Provisions) Order 1992, SI 1992 No. 2644. However, this restriction on the operation of the new system did not apply to applications which people claiming or receiving income support were required by the Secretary of State to make under s. 6.
7. The children's mother was required to and did make such an application on each occasion when she applied for income support in April and June 1993, although it was only the second of these applications that was acted on by the Child Support Agency and an effective assessment did not come into force for a further three months after that. The argument that the assessment made was ineffective and without jurisdiction has to depend on saying that there was no valid application in accordance s. 6 at all, since there can be no doubt that if an application is properly made under s. 6 it must as a matter of duty be referred by the Secretary of State to a child support officer who must then proceed with an assessment under s. 11. Miss Vigors submitted that the mother's application should be treated as ineffective as the original income support application had not resulted in entitlement to benefit. She said people could not have been intended to be able to circumvent the transitional phasing-in regulations by making claims for income support that failed but yet count the related child support applications under s. 6.
8. In my judgment this contention is quite unarguable, despite some observations in a Commissioner's decision in case CCS/7062/1995 at para. 13 which appear to support it. The plain and unambiguous language of s. 6(1) makes the section operate where income support is either claimed by or in respect of, or paid to in respect of, the parent of a qualifying child. Nothing prevents a maintenance application which the Secretary of State requires an applicant to make under s. 6 in either of those two circumstances from being a fully effective application for child support, regardless of the outcome of the benefit claim. The tribunal's reasoning on this issue on page T144 is in my opinion impeccable and the point permits of no further elaboration. In any event even if there had been something wrong with the application the children's mother was required to make on 21 April 1993, she was required to and did make a further one in June at the time she was in fact awarded benefit, which was effective beyond question.
9. The police allowances paid to the children's father together with his pay were of three different types, first a plain clothes allowance paid to him because he is a detective, second a monthly amount paid to him for detective's out of pocket expenses, and thirdly a rent allowance paid to him under Police Regulations in place of the provision of free accommodation on police property, see pages 205-206. In relation to each of these the same issue arises, whether the amount he received should be taken into account as part of his "earnings" from his employment as a police officer under para. 1 of Sch. 1 to the maintenance assessments regulations or left out of account as being merely a payment in reimbursement of expenses wholly exclusively and necessarily incurred in the performance of his duties.
10. As regards the first two types the tribunal directed at page T145 that the amounts he received should be included in the calculation of his earnings except insofar as he was able to show "specific evidence of actual amounts spent on items which would satisfy the strict test of para. 1(2)" that they were wholly, exclusively and necessarily incurred in the performance of his duties: the tribunal were not satisfied on the evidence that any of them were. As regards the rent allowance the tribunal directed that the whole of it should be included as earnings and none disregarded.
11. The provisions of para. 1 about payments for expenses are confusingly worded. Para. 1(l)(d) as in force at the material time appears to place the burden on the person seeking to assert that expenses payments should count as remuneration by providing that "earnings" includes any payment made by the employer in respect of any expenses not wholly, exclusively and necessarily incurred in the performance of the duties of the employment. However the burden as regards the same expenses appears to be the other way round under para. 1(2) as it provides that earnings shall not include any payment in respect of expenses which are wholly, exclusively and necessarily so incurred.
12. Against that legislative background it is I think a mistake to view the question as imposing a formal "burden of proof' on one side of the argument or the other; what a child support officer or a tribunal should in my view do is to consider the actual expenses payments and the facts in each particular case and attempt to form a balanced view on the extent to which the payments received do or do not fall within the "wholly, exclusively and necessarily" category. To the extent that a plain clothes allowance paid to a member of the CID is to cover the provision of normal everyday clothing and merely amounts to a payment in lieu of the free clothing the uniformed branch get for use during working hours, it would not meet the "wholly, exclusively and necessarily" test. To the extent that it covers special clothing for under cover work that the officer would not otherwise have and is only for use on such occasions, the payment is both exclusively and necessarily for the performance of his work and therefore allowable. Payments by way of standard allowances intended to approximate to the actual amount of out of pocket expenses incurred while on duty should be dealt with on similar principles. The child support officer should use his common sense and if necessary make a fair apportionment of the total allowances paid, on the best evidence available.
13. It follows in my judgment that the tribunal did err in law in holding that it was for the children's father to prove that what they referred to as the "strict test" was satisfied in relation to each individual item, and in focusing only on para. 1(2) without also referring to para. 1(1)(d) which appears to neutralise the burden. In my judgment the question should be approached more broadly in the manner I have outlined. Of course many, and perhaps most, sets of facts themselves give rise to inferences requiring explanation or proof as a practical matter in one direction or the other.
14. According to the evidence before me the rent allowance is a standard amount added to the pay of officers who are not housed free in police quarters. It is taxable which means that it has not been accepted as passing the identical "wholly exclusively and necessarily" test under s. 198 Taxes Act 1988, and is I think in process of being phased out so that new entrants to the force no longer qualify for it at all. I am faced with two apparently conflicting decisions of other Commissioners on such allowances, in cases CCS/10/1994 and CCS/12769/1996. Only the first of these was available at the time of the hearing before me and as the Commissioner had on materially similar facts held the allowances to be "earnings" and not deductible expenses (CCS/10/1994 esp. para. 13) no oral argument was addressed to me on the point. However since the date of the hearing I have had the benefit of further written submissions from all three parties in view of CCS/12769/1996 and the issue is a live one for me to determine.
15. It may be that the two decisions can be differentiated on their facts, as in CCS/12769/1969 the Commissioner plainly placed a good deal of weight on evidence that the police sergeant concerned lived in a house known as a police house, where members of the public were in the habit of going for assistance. The Commissioner appears to have been satisfied that the additional use this imposed on the house gave rise to substantial extra expenses attributable solely to the performance of the sergeant's duties and outside normal domestic expenses; see paras. 8 and 9. He did not however dissent from the statement of principle in the earlier case at para. 13, which (impeccably in my respectful view) identifies the issue as being whether the rent allowance was paid in reimbursement of expenses actually incurred wholly, exclusively and necessarily in the performance of the duties of the officer's employment. The correctness of this is beyond doubt, Fitzpatrick v. CIR [1994] 1 WLR 306, cf. also CCS/6807/1995 at para. 12(2).
16. This test is not satisfied by pointing to the fact that the rent allowance is paid as a matter of course to officers who do not get free accommodation in police quarters, or that a policeman is a public officer whose terms of appointment and oath as constable to uphold the peace mean that even when not on rostered duty he may be required to turn out to assist with an emergency or act on his own initiative to take control of some incident he sees, and so in that sense is never wholly off the job. These do not make the domestic expenses of his home "incurred in the performance of his duties" any more than those of a hospital doctor at home with the bleeper switched on in case he is suddenly needed. Nor does the requirement for his residence to be approved by the chief officer of police and for him only to reside at premises so approved (para. 2, Sch. 2, Police Regulations 1995, p. 208). Para. 4 similarly requires that "A member of a police force shall not wilfully refuse to discharge a lawful debt", but this does not make the payment of his bills an expense incurred in the performance of the duties of his employment.
17. In the present case the children's father is a drug squad officer engaged in undercover activities and his address is naturally not publicised as one to which the public can go generally for police assistance. There are no special facts to make the case analogous to CCS/12769/1996 which in my judgment was an exception to the normal rule. I conclude therefore that there was no error of law in the way the tribunal dealt with the question of the rent allowance and they were right to direct the child support officer to take it into account as part of the father's income.
18. The final question about the cost of mortgage protection insurance can be dealt with shortly. The tribunal's direction at pages T144-145, that the premiums could not be deducted as housing costs in calculating his exempt income, was clearly mistaken. As the children's father confirmed to me at the hearing and I accept, the premiums in question were for the normal type of mortgage protection insurance insisted on by building societies under which the policy is to provide a capital sum to pay off all or part of the mortgage in the event of the borrower's death or serious illness. This appears to me to fall squarely within para. 3(4) of Sch. 3 to the maintenance assessments regulations as "a policy ... for the purpose of discharging a mortgage or charge on the home of the parent ..." for which the premiums are an allowable housing cost.
19. For those reasons I set aside the decision of the tribunal dated 13 April 1995 and substitute my own decision, namely that the case is referred to the child support officer to carry out such modifications of the assessment as may be required from the effective date of 29 September 1993, following the tribunal's directions except that the father's plain clothes and expenses allowances should be dealt with as explained in paras. 12-13 above, and his mortgage protection premiums are to be allowed as eligible housing costs under Sch. 3, para. 3(4). To that extent only, the appeal is allowed.

Date: 7 October 1997 (signed) Mr. P. L. Howell QC

Commissioner