UK Social Security and Child Support Commissioners' Decisions

R(CS) 7/98


Mrs. R. F. M. Heggs CCS/2908/1995

13.3.97

Application for maintenance - phasing in provisions - whether a qualifying child can be a party to a "maintenance agreement"

The tribunal decided that a maintenance agreement for the purposes of the phasing in provisions of child support could be made between an absent parent and a qualifying child, to the exclusion of the parent with care, but that on the facts of the case there was no such agreement. The absent parent appealed to the Commissioner on the grounds that the tribunal failed to consider all the relevant periods.

Held, allowing the appeal, that:

an agreement between an absent parent and a qualifying child does not constitute a "maintenance agreement" for the purposes of section 9(1) of the Child Support Act 1991;

by virtue of section 54 the term has the same meaning in paragraph 7(1)(a)(iii) of the Child Support Act 1991 (Commencement No. 3 and Transitional Provisions) Order 1992 and regulation 7(1)(a)(iii) of the Child Support (Miscellaneous Amendments and Transitional Provisions) Regulations 1994 so that the absent parent could not avail himself of the phasing in provisions.

DECISION OF THE CHILD SUPPORT COMMISSIONER

1. My decision is that the decision of the child support appeal tribunal given on 13 February 1995 is erroneous in point of law and accordingly I set it aside. However, as I consider it expedient to give the decision the tribunal should have given, I remit the matter to the Secretary of State with a direction that the child support officer's initial decision of 8 July 1993 shall be reviewed and revised for recalculation of the maintenance assessment on the following basis:

(a) There was no maintenance agreement between the absent parent and the qualifying child, to whom I shall refer to as "R", existing on 4 April 1993 or at any relevant time thereafter for the purposes of paragraph 7(1)(a)(iii) of the Child Support Act 1991 (Commencement No. 3 and Transitional Provisions) Order 1992 ("the Order") and regulation 7(1)(a)(iii) of the Child Support (Miscellaneous Amendments and Transitional Provisions) Regulations 1994 ("the Regulations").

(b) From 15 May 1993 the earnings of the absent parent shall be calculated by reference to his earnings during the inclusive period from June 1992 to May 1993.

(c) From 15 May 1993 the net income of the absent parent's wife shall be calculated in accordance with regulation 2(1)(b) of the Child Support (Maintenance Assessments and Special Cases) Regulations 1992 ("the MASC Regulations").

(d) From 15 May 1993 the absent parent's housing costs shall be recalculated when his endowment policy premium details have been ascertained and verified and in particular whether the endowment policy or policies have been obtained or retained for the purpose of accruing profits on the maturity of the policy or policies for the purposes of ascertaining the exempt income, if any, under regulation 3(1) and (5) of Schedule 3 to the MASC Regulations.

2. These are the appeals of the absent parent and the parent with care against the decision of the child support appeal tribunal of 13 February 1995, leave having been granted by the tribunal chairman. In accordance with regulation 7(2) of the Child Support Commissioner's (Procedure) Regulations 1992 I directed that the absent parent was to be the appellant and the child support officer and the parent with care were to be the respondents. I held an oral hearing of the appeal. The absent parent attended and conducted his own case. The child support officer was represented by Mr. M. Hunt of Counsel, instructed by the Solicitor's Office of the Department of Social Security. The parent with care did not attend and was not represented.
3. The absent parent is the father of R, who was born on 22 October 1975. He was in receipt of non-advanced education. He lived with his mother, the parent with care, who was in receipt of income support. On 21 April 1993 the parent with care applied to the Secretary of State under section 6 of the Child Support Act 1991 ("the Act") for a maintenance assessment to be made in respect of R. The completed maintenance assessment form was received on 10 May 1993. On 14 May 1993 the Secretary of State issued a maintenance enquiry form to the absent parent, who completed and returned it on 23 May 1993. He stated that he was living with his wife and child in owner occupied property, his gross monthly earnings were £2,265 and his wife's were £333; in January 1993 he had arranged to pay R £30 every four weeks. The absent parent noted that confirmation of this arrangement was required. On 9 May 1994 he submitted a letter from R dated 22 July 1993. This confirmed that in January 1993 the absent parent had written a letter to R in which he agreed to pay him "£30 a month". Although the letter had been lost R confirmed that the agreed payments had been made. On 8 July 1993 the child support officer considered the facts and concluded that the absent parent was obliged to pay child support maintenance to the parent with care in respect of R at the weekly rate of £61.83 from 15 May 1993, the effective date.
4. The absent parent requested a review of the decision of 8 July 1993. The request is not included in the documentary evidence before me, but it seems that he considered a review was justified because his net income had been calculated incorrectly due to an error in his tax liability and that no account had been taken of the monthly payment of £30 to R. On 22 February 1994 the second child support officer reviewed the decision under section 18 of the Act but refused to revise it. He took the view that the absent parent could not avail himself of the phasing in provisions contained in paragraph 7(1)(a)(iii) of the Order, which came into force on 5 April 1993 because the assessment of the child support maintenance exceeded £60. He confirmed that the weekly rate from 15 May 1993 to 6 February 1994 was £61.83 but that the amount was reduced to £55.34 from 7 February 1994 owing to a change in law.
5. Mr. Hunt told me that on 9 May 1994 the absent parent applied for a reduction in the maintenance assessment. Again, the request is not included in the documentary evidence before me and there is nothing to indicate the grounds relied on by the absent parent. On 17 May 1994 a clerical assessment was made as phasing in was believed to be appropriate and the weekly rate was reduced to £27.50 from 7 February 1994, when the regulations came into force. On 22 May 1994 the child support officer conducted a review under section 19 of the Act because the clerical assessment on 17 May 1994 was wrong in law. He concluded that as the phasing in provisions were not applicable the assessment of the weekly rate of £55.34 was correct from 7 February 1994.
6. In a letter dated 24 May 1994 the absent parent gave notice of intention to appeal against the review decision of 22 May 1994. As there is no appeal against a review decision under section 19 of the Act, the letter was treated as notice of intention to request a review under section 18. On 28 July 1994 the absent parent requested the review. On 19 August 1994 the child support officer refused to conduct such review because he considered there were no reasonable grounds to do so. He concluded that the maintenance assessment remained at the weekly rate of £55.34 from 7 February 1994. In his decision he noted the following, so far as relevant:

"[The absent parent] requested confirmation that in principle section 9 of the Child Support Act 1991 did not preclude agreements made between a child and a parent. After taking guidance from the Central Adjudication Service, I am satisfied that in principle maintenance agreements made between a parent and child could be acceptable provided that the agreement itself constituted a maintenance agreement.

There is no evidence that there was in place by 4 April 1993 a maintenance agreement as laid out in section 9(1) of the Child Support Act 1991 and the child support officer was correct not to allow any modification of the maintenance assessment from 7 February 1994."

7. The absent parent appealed to the tribunal on the ground that "the CSA was wrong in law when it refused to consider a parent-child maintenance agreement" and "the CSA made a mistake as to a material fact (and was wrong in law) when it claimed "there is no evidence [of a maintenance agreement]".
8. In his written observations on the appeal the child support officer conceded that "during the process of checking the calculation of the maintenance assessment, several errors had been identified." As a result the tribunal were "requested to decide whether the written confirmation of an agreement between [the absent parent] and R, the qualifying child, is sufficient evidence for the introduction of phasing and to remit the case to the Secretary of State to arrange for further evidence to be obtained in relation to [the absent parent's] partner's income and housing costs and for the child support officer to implement any directions that they make."
9. In the event the tribunal allowed the appeal. The decision reads:

"That this matter be remitted to the Secretary of State with a direction that the refusal to review be revised and that if appropriate the CSO should revise the decision of 22 May 1994 and 19 August 1994 on the basis that:

(a) For the period 7 February 1994 onwards the calculation of the maintenance for [R] shall take into account that there was in force on 4 April 1993 and at all times thereafter a maintenance agreement (being an agreement made as evidenced in writing) and that the appellant complies with section 7. The Child Support (Miscellaneous Amendments and Transitional Provisions) Regulations 1994 and that the said agreement commenced January 1993 in the sum of £7.50 per week.

(b) For the maintenance assessment for the period commencing
15 May 1993 onwards that the appellant's earnings be calculated using the earnings of the appellant for the lunar months June 1992 to May 1993 inclusive.

(c) For the maintenance assessment for the period commencing
15 May 1993 onwards the appellant's partner's net income be calculated in accordance with the Child Support (MASC) Regulations 1992, Schedule 1, Part I, section 2(b).

(d) For the maintenance assessment for the period commencing
15 May 1993 that the appellant's housing costs be recalculated when his endowment policy premium details have been ascertained and verified and in particular that it be ascertained whether the endowment policy or policies have been obtained or repaid for the purpose of accruing profits on the maturity of the policy or policies for the purposes of the exempt income calculation (MASC Regulations, Schedule 3, Clause 3(4) and (5))."

10. The absent parent's main ground of appeal was that the tribunal failed to consider "whether the first assessment, of July 1993, had been made in error". This refers to the child support officer's initial maintenance assessment made on 8 July 1993 with effect from 15 May 1993. Although the tribunal considered this issue, they erred in law because they failed to have regard to the provisions of the Order and considered that the effective date was 7 February 1994, when the MASC Regulations came into force.
11. It is not now in dispute that paragraphs (b), (c) and (d) of the tribunal's decision are not erroneous in point of law. The sole question at issue is whether "the arrangement" which existed between the absent parent and R constituted a maintenance agreement which was either made or evidenced in writing for the purposes of the phasing in provisions of paragraph 7(1)(a)(iii) of the Order and regulation 7(1)(a)(iii) of the regulations, which came into force on 5 April 1993 and 7 February 1994 respectively. The question was crucial because if it did, it may have reduced the formula amount to not more than £60 thereby satisfying all the conditions for phasing in under paragraph 7(1) of the Order. The initial decision dated 8 July 1993 and the successive review decisions failed to address the issue. It was not until 19 August 1994 that on the absent parent's insistence, the child support officer obtained guidance from the Central Adjudication Service. He was advised that although "in principle maintenance agreements made between a parent and child could be acceptable ... there is no evidence that there was in place by 4 April 1993 a maintenance agreement as laid out in section 9(1) of the Child Support Act 1991 ..." albeit, as the absent parent pointed out there was R's letter in support. The child support officer confirmed the assessment at the weekly rate of £55.34 from 7 February 1994. The absent parent feels aggrieved with reason.
12. I agree with the absent parent that because the child support officer on 19 August 1994 refused to review the maintenance assessment from 7 February 1994, the issue before the tribunal was whether the child support officer on 22 February 1994 was right to refuse to revise on review the initial decision of 8 July 1993. The tribunal erred in law in limiting their directions to the review decisions of 22 May 1994 and 19 August 1994.
13. On 8 July 1993 the child support officer was required to consider the phasing in provisions then in force contained in paragraph 7(1) of the Order, which provides so far as relevant:

"(a) On 4th April 1993, and at all times thereafter until the date when a maintenance assessment is made under the Act there is in force, in respect of all the qualifying children in respect of whom an application for a maintenance assessment is made under the Act and the absent parent concerned, one or more-

(i) maintenance orders;

(ii) Orders under section 15 of the Army Act 1955 ...

(iii) maintenance agreements (being agreements which are made or evidenced in writing); and

(b) the absent parent is responsible for maintaining a child or children residing with him other than the child or children in respect of whom the application is made; and

(c) the formula amount is not more than £60; and

(d) the formula amount exceeds the aggregate weekly amount which was payable under the orders, agreements or agreements mentioned in paragraph (a) above by more than £20 a week."

Regulation 7(1)(a)(iii) of the regulations is couched in similar terms and came into force on 7 February 1994.

14. In granting the absent parent's request for an oral hearing of the appeal, I specifically stated that I wished to hear legal argument as to whether the agreement between the absent parent and R was a "maintenance agreement" as defined in section 9(1) of the Act. Mr. Hunt told me that he had no instructions on this matter and was unable to assist. I granted him an adjournment, but he was unable to contact the person concerned for further instructions. As a result he relied on the written submissions of the child support officer dated 23 January 1993 which read:

"There is nothing in current legislation to prevent a written maintenance agreement being between a parent and the qualifying child. The only legal requirements are that there is an agreement in force in respect of the qualifying child and the absent parent; that the agreement is "evidenced in writing" and that the agreement was in force on 4 April 1993. I submit that the above criteria was satisfied.

... the tribunal has erred in law solely by not making a complete finding of fact as to the effective date of the calculation of a revised maintenance assessment as modification may have been appropriate from an earlier date than that proposed by the tribunal ..."

15. Mr. Hunt supported the above submission by referring me to section 9 of the Act which provided at the time, so far as relevant:

"9. - (1) In this section "maintenance agreement" means any agreement for the making, or for securing the making, of periodical payments by way of maintenance, or in Scotland aliment, to or for the benefit of any child.

(2) Nothing in this Act shall be taken to prevent any person from entering into a maintenance agreement.

(3) The existence of a maintenance agreement shall not prevent any party to the agreement, or any other person, from applying for a maintenance assessment with respect to any child to or for whose benefit periodical payments are to be made or secured under the agreement.

(4) Where any agreement contains a provision which purports to restrict the right of any person to apply for a maintenance assessment, that provision shall be void.

(5) ..."

16. Mr. Hunt submitted that there was nothing in section 9 to suggest that maintenance agreements were restricted to those made between the absent parent and parent with care. Section 9(1) referred to "any agreement ... or periodical payments ... to or for the benefit of any child; section 9(2) referred to "any person" and section 9(3) referred to "any party to the agreement". In his view an agreement between a qualifying child and the absent parent fell within the definition of "maintenance agreement". Section 54 defined "maintenance agreement" in the Act to have the meaning given in section 9(1). It followed that the reference to "maintenance agreements" in paragraph 7(1)(a)(iii) of the Order and regulation 7(1)(a)(iii) of the regulations included a maintenance agreement made between an absent parent and a qualifying child. The child support officer had conceded this in principle in his decision dated 19 August 1994 although he had decided that there was insufficient evidence to warrant a finding that the agreement was for maintenance on the facts of the case. Mr. Hunt agreed that it was difficult to reconcile the reasoning but submitted that as the tribunal had found as fact "the agreement between the appellant and his son R was for a maintenance payment by the appellant to R of £7.50 per week", the precise meaning of maintenance was not relevant. The tribunal's decision was not perverse in the light of the evidence.
17. In order to avail himself of the transitional provisions modifying the assessment of maintenance following the introduction of child support law, the absent parent has to satisfy the conditions of paragraph 7(1)(a)(iii) of the Order and regulation 7(1)(a)(iii) of the regulations.
18. Section 1 of the Act sets the framework of obligations round which the child support structure is built. It establishes that each parent of a "qualifying child" is responsible for that child's financial support and that this liability is met when an absent parent makes payments of child maintenance assessment under the formula. The Secretary of State is given statutory powers to ensure that the purposes of the Act are carried out. The Child Support Agency itself was not created by the Act but the powers given to the Secretary of State are exercised through the Agency. The Act is concerned with the rights, obligations and powers of the parent with care, the absent parent and the Secretary of State in respect of the qualifying child who has no statutory rights, except in Scotland where there are specific provisions for a child who is twelve years old or over. It is in this context that the meaning of "maintenance agreement" in section 9(1) falls to be interpreted.
19. Since the oral hearing I have considered the advice given on the interpretation of "maintenance agreement" by the Child Support Adjudication Guide. Paragraph 2 of appendix 5 states so far as relevant:

"Written maintenance agreements

There is no legal definition of a WMA [written maintenance agreement). A decision as to whether a WMA is in force is made by the CSO [child support officer]. At the most basic level for a WMA to exist the CSO needs to be satisfied that:

The couple agreed. It is not enough for the AP [absent parent] to have undertaken to pay an amount and then pay it, there must be some indication that the PWC [parent with care] agreed to this amount.

There is something in writing, between the couple themselves or their representative. There does not need to be one document, it could be an exchange of letters which are effectively a proposal and an acceptance of the terms of the agreement and it refers to periodical payments of maintenance ..."

20. I accept the above interpretation which stresses that there must be agreement between the parent with care and absent parent as to the amount of maintenance undertaken to be paid and that "there is something in writing, between the couple themselves". In my view this interpretation accords with the language of section 9(1) which proceeds on the basis that the child is the subject matter and not a party to the agreement. A child as a party cannot have been contemplated because there is no provision for age limit or capacity of the qualifying child to enter into such an agreement. To conclude otherwise would enable an absent parent to pay an amount equivalent to the maintenance assessment in respect of the qualifying child direct to the child, however young. The parent with care would have no control over such payments though remaining responsible for maintaining the qualifying child under section 1(1) of the Act. I find support for my conclusion in the wording of section 9(3) and (4), which refer either directly or by implication to the parties to the agreement and their rights to apply for a maintenance assessment which is limited to persons with care or absent parent, except in Scotland. I find additional support in section 29 which gives the Secretary of State power to collect and enforce child support maintenance although there is no power for payment to be made to the qualifying child direct, except under specific powers in relation to Scotland; section 35 of the Matrimonial Causes Act and paragraph 10 of Schedule 1 to the Children Act 1989 provide for maintenance agreements. For the purposes of both these provisions a maintenance agreement must be between "the parties to the marriage" (see section 34(2) or "the father and mother of the child" (see paragraph 10(1) of Schedule 1). In my view Mr. Hunt's interpretation would make nonsense of the child support scheme.
21. For the reasons stated above the meaning of "maintenance agreement" in section 9(1) does not include an agreement between an absent parent and a qualifying child. By virtue of section 54 the term has the same meaning in paragraph 7(1)(a)(iii) of the Order and regulation 7(1)(a)(iii) of the regulations. In the present case there was no agreement in writing between the parent with care and the absent parent. As a result the absent parent cannot avail himself of the phasing in provisions. The tribunal's decision was erroneous in law. However as I consider it expedient to give the decision the tribunal should have given, I give the decision set out in paragraph 1, as I am empowered by section 24(3)(a) of the Act.

Date: 13 March 1997 (signed) Mrs. R. F. M. Heggs

Commissioner