UK Social Security and Child Support Commissioners' Decisions

 
DECISION OF THE CHILD SUPPORT COMMISSIONER
1. My decision is as follows. It is given under section 24(2) and (3)(d) of the Child Support Act 1991.
2. 1. The decision of the Liverpool appeal tribunal under reference U/06/900/2001/00059, held on 19^th April 2001, is wrong in law.
3. 2. I set it aside and remit the case to a differently constituted appeal tribunal.
4. 3. I direct that appeal tribunal to conduct a complete rehearing of the issues that arise for decision.

In view of the extent and complexity of the parties evidence and comments, it is impossible to give directions on every issue that the tribunal will have to consider. However, there are two obvious directions that the district chairman should consider giving. The first is obviously a direction as to the time to be allowed for the rehearing. The second I suggest as no more than a possibility. It is that the parties could each be required to summarise their competing views under each head of the application. That might help to crystallise the issues for the parties and for the tribunal, although I fear that it would only add further to the documents that the tribunal will have to read and consider.

The appeal to the Commissioner

5. This case concerns an application for a departure direction from the formula assessment of child support maintenance payable with respect to Corrina. In the terminology of the child support legislation, the appellant is her absent parent and the non-applicant for a direction, and the second respondent is her parent with care and the applicant for a direction. I shall refer to them in those terms.
6. This is an appeal to a Commissioner against the decision of the appeal tribunal brought with the leave of a district chairman of tribunals. The Secretary of State supports the appeal. Both parents have made detailed observations on the appeal.

The history of the case

7. This case came before the appeal tribunal as a referral by the Secretary of State of the parent with care's application for a departure direction. This was (as far as I know) the second application for a departure direction. A departure direction had been given on the previous application, but it was removed on appeal to an appeal tribunal. The application is this case was made soon after the earlier tribunal's decision in favour of the absent parent.
8. The application was made under a variety of heads. The parent with care provided comments in considerable detail on each head and the absent parent responded, also in detail. I do not need to attempt to summarise the competing contentions of the parents. It is sufficient to commend as a useful starting point to the tribunal that rehears this case the Secretary of State's summary at pages 152 to 159. There have been further detailed exchanges since that summary was complied, but it is a useful way into the papers.
9. I need only refer to the life-style inconsistent head of departure direction. This was the head under which the tribunal gave a departure direction and the only appeal before me is by the absent parent who challenges that decision.

The tribunal's reasoning

10. The tribunal gave six directions in its decision notice for the recalculation of the absent parent's liability to child support maintenance (page 263). The directions were:
11. 1. First, the tribunal stated that it gave a departure direction under the life-style inconsistent head.
12. 2. Second, it recorded the absent parent's admission that his life-style was supported by a contribution from a lady friend who did not live with him, but who had an income of £40,000 from salary and maintenance.
13. 3. Third, it recorded that the absent parent would not disclose how much she gave him, the breakdown of her income, or her expenses.
14. 4. Fourth, the tribunal recorded that the absent parent did not dissent from his life-style as set out on what is now page 222.
15. 5. Fifth, the tribunal found that the lady friend had an income of £24,000, of which she gave £6,000 towards the expenses of the absent parent's lifestyle.
16. 6. Finally, the tribunal refused to make a departure direction under any of the other heads of the application.
17. The explanation for giving the departure direction is set out in paragraph 2 of the full statement of the tribunal's decision (page 276). It adds little or nothing to the decision notice.

Did the tribunal go wrong in law?

18. Yes, it did.
19. The tribunal's reasoning is difficult to relate to the legislation. That is because it has explained its decisions in terms that do not relate to the legislation. The proper approach is identified by the terms of the legislation. That legislation is contained in the Child Support Act 1991 and the Child Support Departure Direction and Consequential Amendments Regulations 1996.
20. The relevant regulations are regulation 25 and regulation 40(5). Regulation 25(1) provides that a departure direction may be given if

'the Secretary of State is satisfied that the current maintenance assessment is based upon a level of income of the non-applicant [in this case, the absent parent] which is substantially lower than the level of income required to support the overall life-style of that non-applicant.'

This is subject to regulation 25(2), which provides that

'Paragraph (1) shall not apply where the Secretary of State is satisfied that the life-style of the non-applicant is paid for-

(a) out of capital belonging to him; or

(b) by his partner, unless the non-applicant is able to influence or control the amount of income received by that partner.'

If a case is made out under regulation 25(1), regulation 40(5) provides that

'the net income of the non-applicant who is a parent of a child in respect of whom the current assessment is made shall be increased by the difference between the two levels of income referred to in paragraph (1) of that regulation [i.e. regulation 25].'

21. The final provision that is relevant is section 28F(1)(b) of the Act, which provides that a departure direction may not be given unless it would be just and equitable.
22. That legislation suggests the following approach.
23. First, the tribunal must identify the absent parent's disclosed income. There was no dispute about this. Indeed, there could not be.
24. Next, it must make findings of fact on the absent parent's life-style. The tribunal made findings by reference to page 222. The Secretary of State argues that that was insufficient. I disagree.
25. Then, the tribunal must consider how that life-style is funded. If it can be accounted for under paragraph (2), no departure direction can be given.
26. Paragraph (2)(b) refers to a partner. The definition in regulation 1(2) refers to the definition in the Child Support (Maintenance Assessments and Special Cases) Regulations 1992. As the absent parent and his lady friend are not married or living in the same household, she is not his partner for the purposes of regulation 25. It follows that her contribution cannot operate under paragraph (2)(b). The tribunal was correct on that point.
27. However, that does not mean that the lady's contribution was irrelevant. The fact that it was a source of support was relevant in applying the just and equitable requirement.
28. In view of its findings, it should have explained why it was nonetheless just and equitable to give the direction. Although it is no where expressly stated, the purpose of regulation 25 is obviously to allow undisclosed income to be proved by inference from life-style and then taken into account. I do not rule out the possibility that it may be just and equitable to give a departure direction that treats another person's contribution towards a parent's expenses as part of that parent's income under regulation 40(5). But neither is it correct that such a contribution must always be taken into account.
29. The tribunal did not refer to the just and equitable requirement. I cannot believe that it forgot about it. It must have had it in mind as an essential part of its consideration whether or not to give a departure direction. But it failed to deal with it at all.
30. I make two comments in order to avoid any misunderstanding on the just and equitable requirement. First, the lady friend's contribution is not the only factor that is relevant. Second, regulation 30(2)(c) refers only to partners. As I have explained, the lady is not the absent parent's partner for the purposes of this legislation.
31. The tribunal also went wrong at the next stage of determining the level of income necessary to support that life-style. It did not quantify the cost of the life-style, although it may just be possible to work out what it believed that cost to be. Nor did the tribunal explain how it had arrived at that cost. That makes its reasons inadequate. It also deprived the tribunal of a sound basis for applying regulation 40(5).

Summary

32. I allow the appeal and direct a rehearing so that the issues can be further investigated.

Signed on original

Edward Jacobs Commissioner 21st May 2002