UK Social Security and Child Support Commissioners' Decisions

 


DECISION OF THE CHILD SUPPORT COMMISSIONER

1. The absent parent's appeal is allowed. The decision of the Nottingham appeal tribunal dated 5 November 1999 is wrong in law, for the reasons given below, and I set it aside. I can give the decision on the absent parent's appeal against the child support officer's decision dated 12 February 1998 having made the necessary findings of fact (Child Support Act 1991, section 24(3)(b)). My decision is that the decision to be given on the parent with care's application for review under section 18 of the Child Support Act 1991 of the maintenance assessment made on 17 October 1997 is that the child support officer on that date had no jurisdiction to make a maintenance assessment with an effective date of 29 October 1996 as the absent parent was by 29 October 1996 and thereafter not habitually resident in the United Kingdom (Child Support Act 1991, section 44(1)). Accordingly, the maintenance assessment is cancelled with effect from 29 October 1996. I draw attention to paragraphs 19 and 20 below on where that leaves both parents.
2. The application for child support maintenance was made on 6 August 1996. A maintenance enquiry form (MEF) was sent to the absent parent on 3 September 1996. He signed the completed form on 15 September 1996. He was at that time living in Germany with his new wife and step-daughter. The usual blanking-out of names and addresses has removed much useful information, but I think that it is not now in dispute that he was working for the Soldiers' Sailors' and Airmen's Association (SSAFA), possibly as part of an organisation called the British Forces Germany Health Service. In the section for further information at the end of the MEF he wrote:

"I am a UK based [blanked out] working for the [blanked out] in Germany. I currently occupy an army married quarter, although my permanent residence is my house in the UK, on which I pay £263.93 pm mortgage. The house is empty and I am not in receipt of rent."

He sent pay slips, which showed payment in pounds sterling, with deductions for national insurance contributions, but not for income tax. As well as the basic salary there were substantial additions for cost of living allowances (COLA). He also declared income of £314.73 per month from an occupational pension scheme.

3. It is not surprising that on that information it was assumed that the absent parent was habitually resident in the United Kingdom, so that the child support officer (CSO) assumed that there was jurisdiction to make an assessment under section 44(1) of the Child Support Act 1991:

"(1) A child support officer shall have jurisdiction to make a maintenance assessment with respect to a person who is--

(a) a person with care;

(b) an absent parent; or

(c) a qualifying child,

only if that person is habitually resident in the United Kingdom."

Some information was obtained about the COLA payments and other items on the absent parent's pay slips and it was also discovered that his wife was in receipt of child benefit and of family credit from 23 April 1996 to 11 November 1996.

4. The first decision making an assessment of £39.42 per week with effect from 29 October 1996 was made on 17 October 1997. The parent with care applied for second-tier review. It emerged that a lump sum of £30,000 received by her in the divorce settlement had been attributed as annual income. A second CSO on 12 February 1998 made an assessment of £111.76 per week with effect from 29 October 1996. The calculation of the absent parent's income included all the COLA payments in his earnings, put his occupational pension at £36.15 per week and included family credit of £76.20 per week. This time it was the absent parent who protested and appealed in a letter received on 13 March 1998. His letter raised many points, in particular the level of the increase in the amount of the assessment. But he did specifically submit that he was a non-tax paying non-UK resident, so that the Child Support Agency had no jurisdiction, and that the COLA payments should be excluded from his net income, because they were merely to compensate for the higher cost of living in Germany and were not properly part of his pay.
5. The CSO's written submission to the appeal tribunal revealed that on 26 May 1998 the case had been closed with effect from 10 April 1998 on the ground that the absent parent was no longer a UK resident. Very unfortunately the documents in their hands relating to that decision have been lost by the Child Support Agency. There is a record on the computer notepad (now at page 135), which also records that a letter had been received from the absent parent on 11 May 1998. However, I have now received copies of some of the relevant documents from the absent parent. I shall mention those later when explaining my decision.
6. The child support appeal tribunal (CSAT) of 5 November 1999 dismissed the absent parent's appeal, holding that the absent parent remained habitually resident in the United Kingdom and that the COLA payments were to be included in his income. In the statement of reasons it was explained that the chairman (the sole member of the CSAT) took the view that the absent parent was habitually resident at 29 October 1996 down to 12 February 1998, while accepting that he had ceased to be resident by 10 April 1998. The absent parent now appeals to the Commissioner with the leave of the chairman.
7. The appeal was supported in the submission on behalf of the Secretary of State dated 14 June 2000. It was submitted that the CSAT was bound to deal with the period down to 5 November 1999, subject to the possible cancellation of the assessment with effect from 10 April 1998. It was said that therefore the CSAT went wrong in law in not dealing with the issue of habitual residence beyond the date of 12 February 1998. In addition it was said that there were insufficient findings of fact about the COLA, particularly in the light of an amendment to paragraph 1(2) of Schedule 1 to the Child Support (Maintenance Assessments and Special Cases) Regulations 1992 (the MASC Regulations) with effect from 13 January 1997 to exclude tax-exempt allowances from the meaning of earnings from employment. The parent with care had no comments on that submission. The absent parent did comment, mainly about the effect of the "closure" of his case, which he contended meant that the issue of habitual residence had to be decided in his favour for the whole of the period in issue.
8. When, after a very long wait, the case was referred to me, I issued a direction for further submissions on the proper treatment under Schedule 1 to the MASC Regulations of earnings from employment overseas and for information from the absent parent relevant to the question of his habitual residence. That produced a further submission from the Secretary of State and a response from both parents, but little further information. I issued a further direction saying that I wished to substitute a final decision in the case and asking some specific questions. That did produce a good deal of information from the absent parent, including copies of the first page of his contract of employment dated 14 March 1996, of a letter from the Child Support Agency dated 24 April 1998 and of his reply dated 5 May 1998. The parent with care has commented on that evidence. A final submission was made on behalf of the Secretary of State on 27 February 2002.
9. I agree with the Secretary of State that the decision of the CSAT of 5 November 1999 was wrong in law for the reasons stated in paragraph 7 above. I do not need to go into any more detail. The decision therefore has to be set aside.
10. I can now consider the decision to be made on the absent parent's appeal against the CSO's decision of 12 February 1998. That decision was given on the parent with care's application for review of the assessment made on 17 October 1997. Although the parent with care's application was made on the basis that that assessment was too low, in reconsidering the application on appeal I can look at the correctness of the assessment in general. I am satisfied that the assessment made on 17 October 1997 was wrong in law, as on the findings I make below there was no jurisdiction to make that assessment.
11. The key is section 44(1) of the Child Support Act 1991. Because that defined the CSO's jurisdiction, ie the limits of the officer's legal powers, I tend to think that it bit as at the date on which the assessment was made. However, it could also be argued that a CSO had jurisdiction to make an assessment for a past period during which the person in question was habitually resident in the United Kingdom even though the person had ceased to be habitually resident before the assessment was made. In the present case I do not have to decide as between those different possible interpretations of section 44(1), as on my findings of fact below I have concluded that the absent parent had ceased to be habitually resident in the United Kingdom before 29 October 1996. There is no doubt that the jurisdiction depends on the circumstances as they actually were at the relevant dates and not as they were known to the CSO at the time.
12. I now have the evidence produced by the absent parent at pages 211 to 216, which includes a fairly detailed statement of the circumstances of his move to Germany. The parent with care has queried some of the details, but in my view what the absent parent has said there is in substance consistent with what he has said before and with the documentary evidence and I accept it. The effect of the contract of employment with SSAFA, made on 14 March 1996, was that the absent parent agreed to be employed by SSAFA in Germany as a community psychiatric nurse from 8 April 1996 to 31 March 2001. There were provisions for a probationary period of six months and, it appears (although the relevant part of the contract has not been copied), for termination by notice within the five years. The contract could be renewed by SSAFA. The absent parent said in his letter of 5 May 1998 that he left the United Kingdom on 14 April 1996. I do not think that the odd days matter: the absent parent could easily have been allowed some days from 8 April 1996 in which to move to Germany, as he only ended his service in the RAF in March 1996. The absent parent re-married in July 1996. His wife and step-daughter joined him immediately in Germany. They live in accommodation provided through his employer, so have not acquired any property. His step-daughter attended school in Germany and his wife has taken up employment there (although I do not know when). Most of the absent parent's salary is paid into his German bank account, but he maintains a bank account in England to pay for life assurance, professional subscriptions etc. He also visits the United Kingdom for up to two weeks a year to see family.
13. I note that in July and August 1996 the absent parent was paying United Kingdom national insurance contributions, but not income tax. There are complicated provisions in the Anglo-German Convention on Social Security of 20 April 1960 which require those employed in Germany by an organisation listed as serving United Kingdom armed forces to remain subject to British social security legislation, but only if the person is not ordinarily resident in Germany. Those provisions remain effective despite European Community legislation on the co-ordination of social security legislation (see the discussion in my decision R(F) 2/99), about a NAAFI employee). I do not know whether SSAFA is listed for the above purposes, although I suspect that it is. It might be argued that the payment of national insurance contributions indicated that at those dates the absent parent was not ordinarily resident in Germany. However, there was widespread misunderstanding, or at least vagueness, about the effect of the Anglo-German Convention on liability for United Kingdom national insurance contributions of employees of organisations like the NAAFI and SSAFA. I do not regard the deduction of national insurance contributions from the absent parent's earnings as of any significant weight against his personal circumstances. Therefore I have decided not to impose yet more delay by seeking further evidence about national insurance contributions after August 1996.
14. The absent parent has said that his intention in April 1996 was to stay in Germany and not to return to the United Kingdom, and that he regarded his permanent residence in the United Kingdom as ended. Some doubt is cast on that by what he wrote on the MEF on 15 September 1996 (see paragraph 2 above), in particular the reference to the house in England as his permanent residence. The absent parent has now explained in the submission signed on 13 November 2001 that the house was originally jointly owned and transferred to him as part of the divorce settlement. It was sold in late 1996 or early 1997, with negative equity of some £5,000. He has said that he ceased to regard the house as his permanent residence immediately on leaving the United Kingdom. Although I might doubt exactly what the absent parent's intentions were in April 1996 and how definitely they had then been formed, I have no doubt about his intentions after he had been joined by his wife and step-daughter, the house in England was being sold and he was past the probationary period under his contract. I have no doubt (using the terms stated by the courts in several authoritative cases) that he had voluntarily adopted residence in Germany for the settled purpose of remaining there for the foreseeable future (and at least the five-year term under his contract) as part of the regular order of his life for the time being.
15. Under the principles recently confirmed by the House of Lords in Nessa v Chief Adjudication Officer [1999] 1 WLR 1937, R(IS) 2/00, that is enough to establish habitual residence in Germany, where he had resided for an sufficient period to give his residence the quality of "habitual", by 29 October 1996 (when he had been there for more than six months). I think that this is a case where the acquisition of habitual residence in Germany goes hand in hand with losing habitual residence in the United Kingdom, although there are cases where habitual residence in one country can be abandoned unequivocally overnight before a new habitual residence is established anywhere else.
16. I do not need to go into all the cases on habitual residence in social security law and in other contexts, such as family law. But I ought to mention the one reported Commissioner's decision on child support, R(CS) 5/96. There Mr Commissioner Rice suggested that the habitual residence test should be applied in a special way in child support cases, in the context of a social need to require absent parents to maintain their children. The case concerned a civil servant of some 20 years' standing in the Home Office, who was posted to India, initially for 18 months then extended to five years, to investigate potential immigrants. The Commissioner was looking at the position nearly two years into the posting and held that the civil servant was habitually resident in the United Kingdom. The Commissioner considered that he had to look at the nature and degree of his past and continuing connection with the United Kingdom and his intentions for the future as well as at the length and purpose of his residence in India. He put great weight on the fact the civil servant was pursuing his career within the Home Office, would return to the United Kingdom after his posting and was paid in this country, subject to United Kingdom income tax. The essential character of his career was one based in the United Kingdom. I do not need to decide how far all of Mr Commissioner Rice's comments can stand with later case-law on habitual residence, because I am satisfied that the facts of the present case are significantly different from those of R(CS) 5/96. The present case is not one of a posting abroad as part of a United Kingdom career, but the taking up of new employment in Germany expected to last for a substantial or indefinite length of time and the putting down of roots and a family base in Germany. I do not regard R(CS) 5/96 as pointing to a different result in the present case from that I have reached above.
17. As the absent parent was not habitually resident in the United Kingdom at either of the potentially crucial dates, there was no jurisdiction to make a child support maintenance assessment at all. That requires the review of the assessment made on 17 October 1997.
18. Regulation 7(1) of the Child Support (Maintenance Arrangements and Jurisdiction) Regulations 1992 provides that where, among others, an absent parent with respect to whom a maintenance assessment is in force ceases to be habitually resident in the United Kingdom, a CSO (now the Secretary of State) is to cancel the assessment. Regulation 7(3) provides that on such a cancellation the assessment ceases to have effect on the date on which the relevant person ceases to be habitually resident. Those provisions seem to cover a case where an assessment is initially properly made and a person later ceases to be habitually resident, as that is the only case in which a maintenance assessment can sensibly be said to cease to have effect. They do not seem to cover the present case, where my conclusion is that no valid maintenance assessment was made from the outset. However, it is consistent with regulation 7 and with the general use in the child support legislation of the concept of the cancellation of a maintenance assessment, for me to take the following approach in giving the decision on review of the assessment of 17 October 1997. I do not just declare that that assessment was made without jurisdiction, but also rule that that assessment is cancelled with effect from 29 October 1996.
19. The first result of my rulings will be that the authority for any payments made by the absent parent to the Child Support Agency has been removed. However, the issues of the reimbursement to the absent parent of overpaid child support maintenance and of the (limited) powers of the Secretary of State to require repayment from the parent with care are not within my jurisdiction and I ought to say no more about them.
20. The second result of a ruling that the present case falls outside the jurisdiction of the child support system is that there is nothing to take away the powers of the ordinary courts to order payments of maintenance for the child in question under family law legislation. In such cases it does not matter if one parent is not habitually resident in the United Kingdom if the other parent has a sufficient connection. The normal rule is that any order under that legislation is for a period starting with the date of the application under the legislation. But special provision has been made for cases where a child support maintenance assessment is cancelled or ceases to have effect and allows an order to be made for a period, in cases of cancellation, starting with the date from which the cancellation had effect. An application must be made within six months of the date when the cancellation is made. These rules are in the Child Maintenance Orders (Backdating) Order 1993 (SI 1993 No 623). It is a long way outside my powers for me to suggest how the 1993 Order applies in the present case. However, the parent with care might well wish to take prompt legal advice about the possibility of making an application now to the ordinary courts for a maintenance order for the period starting on 29 October 1996.

(Signed) J Mesher

Commissioner

Date: 18 April 2002