UK Social Security and Child Support Commissioners' Decisions

[2008] UKSSCSC CCS_4381_2006 (07 July 2008)

 


CCS/4380/2006

CCS/4381/2006

DECISION OF THE CHILD SUPPORT COMMISSIONER

1. My decision is that the decision of the tribunal is wrong in law. I allow the appeal and substitute for the tribunal's decision my own decision that payments received by the non-resident parent from his partner are to be treated as his income under paragraph 15 of Schedule 1 to the Child Support (Maintenance Assessment and Special Cases) Regulations 1992. I confirm that the effective date of the revised assessment arising out of the non-resident parent's employment by his father is 11 July 2005. I therefore confirm the assessment under appeal.
2. This is an appeal by the parent with care and mother of the relevant children against a decision of the tribunal given on 12 October 2006 allowing the appeal of the non-resident parent against a supersession decision made on 5 May 2006 assessing the non-resident parent as liable to pay child support maintenance of £51.99 per week with effect from 24 October 2005 (CCS/4381/2006). The non-resident parent also appealed against a decision made on 16 March 2006 specifying 11 July 2005 as the effective date of a supersession decision assessing the non-resident parent as liable to pay child support maintenance of the same amount. (CCS/4380/2006). Mr deputy Commissioner Poynter granted leave to appeal against both decisions on 16 July 2007 and I held an oral hearing of the appeals at Bury County Court on 28 February 2008 attended by both parents and by Mr Huw James, Solicitor, on behalf of the Secretary of State. Since that hearing I have received further written submissions from both parents.
3. The adjudication history is long and complicated, but although the deputy Commissioner granted leave to appeal against decisions, I have been concerned only with payments made to the non-resident parent by his partner which were said to have been made to cover his mortgage and council tax payments, which the tribunal held were not to be taken into account as the non-resident parent's income.
4. In a letter dated 13 February 2006 the non-resident parent's legal adviser gave the following explanation of those payments:

"Firstly, with regard to the (non-resident parent's) partner, we confirm that she is not a partner for the purpose of the Child Support Act 1991. For personal reasons, which are not the concern of the CSA, (the non-resident parent) and his partner live separately although I can confirm she does assist him with both mortgage payments and his council tax. I have enclosed bank statements which show the mortgage payment and council tax payments being made and bank statements provided by his partner which show the amounts coming out of her account to cover. As additional proof that the transfers are made on an ongoing basis, a selection of statements covering the year are provided."

At the hearing of the appeal, the non-resident parent gave evidence about the payments, which is recorded in the Record of Proceedings as follows:

"My partner doesn't actually live with me for economic reasons but feels the need to help me out. She couldn't release her interest in her property and so couldn't move in with me but pays to prevent me from going under due to my low income.-I am not employed by her."

5. The tribunal, consisting of a legally qualified panel member sitting alone, allowed the appeal, on the ground that paragraph 31 of Schedule 1 of the Child Support (Maintenance and Special Cases) Regulations 1992 does not apply to non-contractual payments. I agree with the deputy Commissioner who granted leave to appeal that that view is probably incorrect, but both parents and the Secretary of State now agree that that was not in fact the issue which the tribunal had to decide and that, accordingly, the tribunal's decision is in any case wrong in law for that reason.
6. As the submission to the tribunal made clear, paragraph 31 of Schedule 1 to the 1992 MASC Regulations applies to payments of housing costs or council tax made on behalf of, not payments to, a parent. Since the payments in question in this case were said to have been made to the non-resident parent, the relevant provision was paragraph 15 of Schedule 1, which provided that the amounts to be treated as the income of a parent included:

"15. any other payments or other payments received on a periodical basis which are not otherwise taken into account under Part I, II, IV or V of this Schedule except payments or other amounts which-

(a) are excluded from the definition of "earnings by virtue of paragraph 1(2);

(b) are excluded from the definition of "the relevant income of a child" by virtue of paragraph 23; or

(c) are the share of housing costs attributed by virtue of paragraph (3) of regulation 15 to any former partner of the parent of the qualifying child in respect of whom the maintenance assessment is made and are paid to that parent."

Paragraph 16 provided:

"Subject to sub-paragraphs (2) to (7) the amount of any income to which this Part applies shall be calculated or estimated-

(a) where it has been received in respect of the whole period of 26 weeks which ends at the end of the relevant week, by dividing such income received in that period by 26;

(b) where it has been received in respect of part of the period of 26 weeks which ends at the end of the relevant week, by dividing such income received in that period by the number of complete weeks in respect of which such income is received and for this purpose income shall be treated as received in respect of a week in which it is received in respect of any day in the week in question."

7. On 29 November 2007 the Court of Appeal held in Chandler v Secretary of State for Work and Pensions and another [2007] EWCA Civ 1211 (reported as R(CS) 2/08 that monthly repayments of a loan to a non-resident parent by a company of which he was the sole director and majority shareholder were not 'income' within paragraph 15. The non-resident parent did not refer specifically to that case until his fax of 2 April 2008, but at the oral hearing of the appeal he stated that the payments in question in this case came from his own capital. He explained the content of the letter from his legal adviser on the basis of a bereavement referred to earlier in the letter, and both during and since the hearing before me the non-resident parent has referred to evidence to the effect that he was meeting his housing expenses out of his own capital. In his fax of 2 April he invited me to substitute for the tribunal's decision a decision to the same effect as that of the tribunal.
8. I am wholly unpersuaded by the non-resident parent's submissions with regard to the letter of 13 February 2006. The author of the letter specialises in giving child support advice and I regard it as inconceivable that he would have stated that the non-resident parent was being supported by his partner if his instructions were that the non-resident parent was paying his housing costs out of his own capital, particularly since the letter also claimed that the non-resident parent was funding his living expenses using an interest-free credit card. Furthermore, the evidence given by the non-resident parent at the hearing was also to the effect that he was being supported by his partner because of his low income. Although I must allow the appeal and set aside the tribunal's decision because of the error of law to which I have referred, I consider that I must dispose of the case on the basis of the evidence which has already been given, rather than allow the non-resident parent to raise at this stage a new and wholly inconsistent basis for excluding from his income the payments made to him by his partner.
9. The evidence supplied with the letter of 13 February 2006 shows that the non-resident parent received payments from his partner of £1000 on 16 March 2005, £1500.00 on 4 April 2005 and £600.00 on 17 June 2005. In Chandler the Court of Appeal held (at para. 33) that paragraph 15 of Schedule 1 to the 1999 MASC Regulations is a "sweep-up" provision for other kinds of income not specifically dealt with in other provisions in the Schedule and must be read in that context. No doubt in order to fall within paragraph 15 any payments received by a parent must be sufficiently regular in frequency and amount to be properly regarded as the parent's "income", but paragraph 19 of Schedule 2 to the MASC Regulations provides for a disregard of any charitable or voluntary payment made, or due to be made, "at regular intervals", and paragraph 16 of Schedule 1 provides a machinery for calculating or estimating income in cases where payments are not made evenly in respect of a given period. I therefore regard it as apparent that paragraph 15 is not confined in its application to cases where the payments made to a parent are each of the same amount, or made at regular intervals.
10. Paragraph 15 applies to payments "received" on a periodical basis, and in my judgment it is the nature of such payments in the hands of the payee which is crucial in deciding whether they are to be considered as a parent's income under paragraph 15. In this case, the non-resident parent's liability to make mortgage payments and to pay council tax was regular and recurrent. In the letter of 13 February 2006 the payments made to the non-resident parent by his partner were said to be specifically to enable him meet those liabilities, and also to be on an "ongoing basis". In the normal course of events, any ongoing payments to enable the non-resident parent to meet his mortgage and council tax liabilities over a period of time would have to be on a periodical basis and, in my view, such payments from a third party are properly to be regarded as payments of income, rather than as payments of capital. Although the non-resident parent's legal adviser supplied evidence of only three such payments over a three month period, each of which was of a different amount, I therefore consider that the Secretary of State is correct in his submission that those payments should be regarded as falling within paragraph 15. On the basis of the evidence that the purpose of the payments was to enable the non-resident parent to discharge his mortgage and council tax liabilities, I also consider that the Secretary of State was correct in treating the amount of such income as being the amount of those liabilities. Since the amounts received by the non-resident parent on that basis were in respect of the whole of the 26 week period ending on the relevant week, I do not consider that it was necessary to have recourse to paragraph 16 of Schedule 1 for the purpose of calculating the amount of the non-resident's income from his partner under paragraph 15.
11. On the basis of the evidence before the tribunal, I therefore consider that I can substitute for the tribunal's decision my own decision that the payments made to the non-resident parent by his partner are to be taken into account as income under paragraph 15 of Schedule 1 to the 1992 MASC Regulations So far as the other issue is concerned, I can see no reason not to accept the Secretary of State's submission that the effective date of the assessment arising out of the non-resident parent's employment by his father is 11 July 2005.
12. My decision is therefore as set out in paragraph 1.

(signed on the original) E A L Bano

Commissioner

7 July 2008