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[1997] UKSSCSC CSCS_13_1995 (28 January 1997)

R(CS) 11/98

Mr. J. G. Mitchell QC CSCS/13/1995

28.1.97

Maintenance assessment - absent parent's council tax liability - whether an eligible housing cost in the calculation of exempt income

The absent parent was the father of a child who lived with his mother (the parent with care). The absent parent appealed to a child support appeal tribunal against the review decision of the child support officer in regard to a maintenance assessment. The tribunal allowed the appeal and remitted the case to the Secretary of State with directions for review and recalculation of the maintenance assessment. The absent parent appealed to the Commissioner against the tribunal's decision that his council tax liability, the amount of which was accepted as relevant in calculating his protected income, was not relevant as a "housing cost" in assessing his exempt income under the Child Support (Maintenance Assessments and Special Cases) Regulations 1992.

Held, dismissing the appeal, that:

some restriction required to be recognised in interpreting the meaning of the words in paragraph 1(g) of Schedule 3 of the regulations. Although paragraphs 4 and 6 of Schedule 3 imposed certain conditions relating to housing costs and rendered certain costs ineligible, neither of those paragraphs could be considered except in relation to an item which fell within the list of housing costs in the regulations;

regulations 9(1)(b) and 11(1)(b) dealt with housing costs for the purposes of exempt income and protected income, respectively. Both provisions refer to regulation 14 which in turn provides that Schedule 3 is to have effect for determining certain housing costs for both purposes. It was clear that the specific inclusion in regulation 11(1)(j) of a provision relating to council tax was only necessary because housing costs determined under Schedule 3 would not otherwise include council tax;

in terms of regulation 3(5) of the Child Support (Maintenance Arrangements and Jurisdiction) Regulations 1992, where a maintenance assessment is made under a court order, the effective date of the assessment is to be two days after the assessment is made. Accordingly, the tribunal had correctly accepted that the effective date in this case was 17 November 1993 being two days after the child support officer's decision.

DECISION OF THE CHILD SUPPORT COMMISSIONER

My decision is that the decision of the child support appeal tribunal dated 12 July 1995 is not erroneous in law. This appeal is therefore refused.

This is an appeal by the absent parent of a child D born on 6 April 1988 who lives with his mother (the parent with care) who is the second respondent in this appeal. The first respondent is the child support officer. The appeal was dealt with at a hearing held before me on 16 January 1997 at which the absent parent, who did not attend the hearing, was represented by Mr. Paul Gostelow, solicitor, of Castlemilk Law Centre and the child support officer was represented by Mr. Liddle, Advocate. I am obliged to both representatives for their submissions.

In their decision the child support appeal tribunal allowed the appeal of the absent parent against the decision on review of a child support officer and remitted the case to the Secretary of State with directions for recalculation and review of the maintenance assessment. The only issue in respect of which the tribunal's decision was said by the appellant before me to have been erroneous in law was their decision that the appellant's council tax liability, the amount of which they accepted was relevant in the computation of his protected income, was not relevant as a "housing cost" for the purposes of assessing his exempt income when making the maintenance assessment under the Child Support (Maintenance Assessments and Special Cases) Regulations 1992 ("the MASC Regulations"). The appellant's contention, which was rejected by the tribunal, was that payments of council tax were eligible as housing costs for the purposes of exempt income under paragraph 1(g) of Schedule 3 to the MASC Regulations. That paragraph is both preceded and followed by various instances of specific eligible housing costs for the purposes of both exempt income and protected income. Paragraph 1(g) is in the following terms:

"(g) payments in respect of, or in consequence of, the use and occupation of the home;"

The tribunal referred to Commissioner's decision CSCS/1/1994 in which I observed, in paragraph 23:

"The wording of paragraph 1(g) is expressed in terms which, if read alone, are potentially very wide in their application. However paragraph 1 as well as dealing specifically with rental and licence payments, contains a number of other very specific examples of payments which are eligible as housing costs, a specification which would be unnecessary if a broad, unrestricted meaning were to be given to paragraph 1(g). It would appear accordingly that that sub-paragraph was intended to have some narrower, more restricted meaning, although what that is may be far from clear."

Before me Mr. Gostelow for the appellant conceded that paragraph 1(g) required to be given a restricted meaning to the extent that other sub-paragraphs of paragraph 1 made specific provision for payments which could otherwise have come under 1(g). The ambit of payments under 1(g) was also restricted, he said, by other provisions in paragraphs 4 and 6 of Schedule 3. Otherwise however the operation of paragraph 1(g) was and should in his submission be unrestricted and in particular council tax came within its ambit. The liability under the Local Government Finance Act 1992 of a resident for payment of council tax in respect of residence in a dwelling came within the general provision of a liability for payment for the use and occupation of the home. The various statutory exemptions in the schedule of exempt dwellings in the Council Tax (Exempt Dwellings) (Scotland) Order 1992 relating to unoccupied premises indicated, in his view, an emphasis on occupation for liability purposes.

For the child support officer Mr. Liddle agreed with Mr. Gostelow that the ambit of paragraph 1(g) was restricted by other specific provisions but submitted that its terms were perfectly plain and that as council tax was not levied in respect of the "use and occupation" of a home but on the basis of "residence", the wording of paragraph 1(g) was not apt to cover a council tax payment. In this connection Mr. Liddle contrasted the previous rating legislation use of the term "occupation" and contrasted it with the "residence" basis of council tax liability. The draftsman of the MASC Regulations had to be assumed to be aware of council tax and its incidence and had indeed made specific reference to council tax elsewhere in those regulations. Alternatively, Mr. Liddle argued that if I did consider there was uncertainty as to the meaning of paragraph 1(g), the specific references to council tax elsewhere in the MASC Regulations made it clear beyond doubt that that tax was not included as an eligible housing cost under paragraph 1 of Schedule 3. He referred in particular to paragraph 31 of Schedule 1 to those regulations which, albeit in a different context, referred to payments which he emphasised were in respect of:

"... housing costs or council tax ..."

Furthermore he referred to regulation 11 of the MASC Regulations dealing with protected income which he said demonstrated that the legislators had applied their mind to the question of council tax and had included it for protected income purposes in regulation 11(1)(j).

In dealing with Mr. Liddle's alternative argument Mr. Gostelow maintained that the reference in Schedule 1 to council tax was necessary because it might fall out of housing costs in Schedule 3 under other restrictions. Schedule 3 could create a different class of housing costs from that in paragraph 31. He admitted to more of a problem with regulation 11 but submitted that the relative provisions dealing with exempt and protected income had different aims and the problem, if there was one, affected protected income under regulation 11 and not exempt income under regulation 9.

It is in my judgment clear that some restriction of what might otherwise be the full ordinary meaning of the words in paragraph 1(g) of Schedule 3 must be recognised for the reasons which I have already given in decision CSCS/1/1994. I also recognise that paragraph 4 of the schedule imposes certain conditions relating to eligible housing costs and paragraph 6 renders certain costs ineligible. But I do not accept that either of these paragraphs falls to be considered except in relation to an item which has otherwise fallen within the earlier list of housing costs. So far as Mr. Liddle's primary submission is concerned I recognise that there is some force in the point taken that "residence" is the basis of council tax liability and not "occupation". I do not accept that the words of paragraph 1(g) are "perfectly plain and clear" as he has submitted. Indeed the concession that some restriction has to be applied to the meaning of those words is of itself sufficient to create an arguable uncertainty about the ambit of the sub-paragraph, particularly in view of the lack of any suggestion as to an application of it in some other respect not covered by the specific sub-paragraphs.

However the question whether council tax can be regarded as within the scope of paragraph 1(g) is in my judgment put beyond doubt by a consideration of the context of that provision in the scheme of the MASC Regulations. Those regulations contain clearly parallel provisions in regulation 9(l)(b) and 11(1)(b) dealing with housing costs for the purposes of exempt income and protected income respectively. Both of those provisions refer to regulation 14 which in turn provides that Schedule 3 is to have effect for determining certain housing costs which are eligible for both purposes. However regulation 9 is concerned with establishing income which is exempted from the absent parent's assessable income for the purposes of the maintenance assessment. Regulation 11 on the other hand has a different object, namely to establish a protected level of income of an absent parent below which the maintenance assessment is not to reduce that parent. Mr. Gostelow accepted that it would hardly be surprising to find different provisions applying to the items eligible in each case. In the case of regulation 11 the aggregate amount of the protected income includes not only the housing costs applicable also to exempt income but in addition includes in terms of regulation 11(1)(j):

"the amount of council tax which the absent parent in question or his partner is liable to pay in respect of the home for which housing costs are included under sub-paragraph (b) less any council tax benefit;"

The necessity for that provision could only arise because housing costs determined in accordance with Schedule 3 would not include council tax. Furthermore the wording of regulation 11(l)(j) makes it perfectly clear that the draftsman was not only aware of council tax but of the need to make a special provision for it in respect of a home for which housing costs were included. The clear distinction is also pointed to by the alternative provision in paragraph 31 of Schedule 1 referred to above. I was not impressed by the appellant's attempt to explain away that provision.

In the result I am satisfied that whatever restricted meaning falls to be applied to paragraph 1(g) of Schedule 3, that sub-paragraph does not, and was not intended to, include payments by way of council tax. For these reasons I hold that the tribunal in the present case came to the correct conclusion as to council tax and that their decision is not erroneous in law.

One other matter arose before me regarding the tribunal's ruling that the effective date of the original maintenance assessment fell to be altered from 7 October 1993 as determined by the child support officer at first instance and also on review. It was accepted before the tribunal by the parties' representatives that the effective date should be 17 November 1993 which was two days after the date of the child support officer's decision upon the appellant's child support maintenance liability. The tribunal in the reasons for their decision referred to section 8(11) of the Child Support Act 1991 specifying the enactments under which maintenance orders affected by the Child Support Act had been made. One of those enactments is the Family Law (Scotland) Act 1985 under which the order for the payment of aliment to the parties' child was made when decree of divorce was pronounced between them in 1991. In terms of regulation 3(5) of the Child Support (Maintenance Arrangements and Jurisdiction) Regulations 1992 where a maintenance assessment is made with respect to a child covered by such a Court order the effective date of the assessment is to be two days after the assessment is made. I am therefore satisfied that the tribunal correctly accepted that the effective date in the present case fell to be altered to 17 November 1993, being two days after the date of the child support officer's decision.

Date: 28 January 1997 (signed) Mr. J. G. Mitchell QC

Commissioner