UK Social Security and Child Support Commissioners' Decisions

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[2008] UKSSCSC CCS_738_2007 (26 June 2008)

Decision

My decision is set out in paragraph 2 below. Its effect is that the non-resident parent has not succeeded on the main point raised by the appeal. I have allowed the appeal on a technical point concerning the effective date of the maintenance calculation. I believe that my having done so will leave the non-resident parent slightly worse off than he was under the tribunal's decision

The appeal is allowed. The decision of Stoke-on-Trent appeal tribunal given on 21 November 2006 under reference 049/06/00203 is wrong in law and I set it aside. Under section 24(3)(a) of the Child Support Act 1991, I give the decision I consider the tribunal should have given, namely that the non-resident parent is liable to pay child support maintenance for Rebecca at the weekly rate of £33.00 from the effective date of 12 May 2005.

Reasons

Introduction

This appeal is about Rebecca. The appellant non-resident parent is Rebecca's father and I will refer to him as such. The first respondent is the Secretary of State and the second respondent to this appeal is Rebecca's mother, with whom Rebecca lives.

The father also has a son, James, by a different mother and, at the time I have to consider, he lived with a third woman and her two children, whose names I have not been told. One of those children is severely disabled.

Rebecca's mother applied for child support maintenance under section 4 of the Child Support Act 1991 on 28 April 2005. The Child Support Agency notified the father of that application by issuing him with a maintenance enquiry form ('MEF') on 12 May 2005. The father completed and returned that form on 23 June 2005.

On 12 July 2005, the decision maker calculated that the father was liable to pay £22 per week from the effective date of 19 July 2005. That liability was calculated on the basis that:

(a) there was a maintenance calculation extant in respect of James when Rebecca's mother made her application and that, therefore, there were two qualifying children, namely Rebecca and James;

(b) there were two 'relevant other children', namely the children of the father's partner; and

(c) the father's net weekly income was £272.03.

The figure of £22.00 per week was calculated by:

(a) reducing the net weekly income by 20% to £217.62 per week because of the two relevant other children in the father's household;

(b) applying the appropriate percentage, which as there were two qualifying children, was 20%, to the reduced net weekly income, to give an unrounded assessment of £43.52 per week;

(c) rounding that assessment to £44.00 per week; and

(d) apportioning the rounded assessment equally between Rebecca and James to give a liability of £22.00 per week for each child.

However, by the tribunal hearing, it had become clear that the Secretary of State's decision had been made on a false premise: there had never been a maintenance calculation in respect of James and the previous maintenance assessment in respect of him had been closed with effect from 8 October 2002. The tribunal was told by the presenting officer that the father's correct weekly liability for Rebecca was £33.00 per week and it issued a decision confirming liability at that rate, again from the effective date of 19 July 2005.

The father now appeals to the Commissioner against that decision with the leave of the tribunal chairman.

The issue

One of the issues before the tribunal, and the only issue raised by the parties before the Commissioner, was whether the Secretary of State was correct to include a sum of £97.96 representing the child tax credit ('CTC') paid to the father's partner as part of his net weekly income.

The father says that the effect of doing so is to take money that has been given to his partner for the needs of her children and to give it to someone else's children. He points out that his partner would receive CTC whether he lived with her or not and submits in effect that the CTC should therefore be treated as her income, rather than his. A legal officer noted, when giving case management directions, that CTC is treated differently under the old child support scheme and raised the issue of whether that difference in treatment might amount to unlawful discrimination under Article 14 of the European Convention on Human Rights.

The Secretary of State's position is that the law requires him to decide as he did and does not discriminate unlawfully against the father. Specifically, Schedule 1 of the Child Support (Maintenance Calculations and Special Cases) Regulations 2000 provides as follows (so far as is relevant):

'Net weekly income

1. Net weekly income means the aggregate of the net weekly income of the non-resident parent provided for in this Schedule.

2.-13. …

Child tax credit

13A. Payments made by way of child tax credit to a non-resident parent or his partner at the rate payable at the effective date.

…'

If the matter is governed solely by the technical law relating to child support, then paragraph 13A of Schedule 1 has the effect for which the Secretary of State contends and the tribunal was correct to treat the CTC payments as part of the father's income. Therefore, the father's appeal can only succeed on this issue if he can show that paragraph 13A discriminates unlawfully against him and that the Human Rights Act 1998 obliges me to disapply the paragraph in his case.

The father and his partner (who acted as his representative) are not lawyers and, understandably, were unable to address me on the technical issues relating to discrimination. The father's partner has given me a helpful explanation of how the decision to include CTC in the father's net weekly income has reduced the income of her household. I accept what she says and do not seek to minimise the financial difficulties that the household has experienced as a result of the decision.

However, I am unable to conclude that paragraph 13A discriminates unlawfully against the father. My reasoning is as follows:

(a) Although the CTC may have been paid to the father's partner it was not, as the father submits, her income. Rather, it was the joint income of the father and his partner. The father and his partner were a couple for the purposes of the Tax Credits Act 2002 and section 3(3) of that Act required them to make a joint claim for tax credits. Papers available to the Commissioner (but not the tribunal) show that they did make a joint claim and that the resulting award of CTC was made jointly to both of them.

Therefore this is not a case in which the partner's income has been treated as that of the father: it actually is his income just as much as it is hers.

(b) It is not the correct approach to compare individual rules of the old scheme with the equivalent rules of the new scheme without considering them in the contexts of those schemes as a whole. A rule that is part of a technical scheme may perform a function that is performed by a different rule in another scheme. Therefore discrimination cannot be established merely by showing that CTC is disregarded when calculating the net income of an absent parent under the old scheme but included when calculating the net weekly income of a non-resident parent under the new scheme. It can only be established, if at all, on the basis that the new scheme taken as a whole treats the father in a way that is worse than he would have been treated by the old scheme taken as a whole and does so for reasons that are impermissible. The evidence in this appeal does not even establish categorically that the father is worse off under the new scheme, far less that he is worse off as a result of discrimination.

(c) In particular, as Rebecca's mother points out, the father is under a legal obligation to maintain Rebecca and he is under no obligation to maintain his partner's children. Despite that, under the new scheme, his net weekly income was reduced by 20% to reflect their presence in his household. In those circumstances, the Secretary of State has taken a policy decision that CTC, as income the father receives to help him maintain those children, should be included in the calculation before the 20% reduction is made. It appears that he took the view that to disregard the CTC and make the 20% reduction would be to make an allowance twice to reflect the same expenditure.

(d) In my judgment, he was entitled to take that view. The rule is only disadvantageous to the father and his new family because the level of CTC was relatively high and the father's earnings were relatively low, so that reducing the net weekly income by 20% was not enough to overcome the effect of including the CTC as income in the first place. It is not difficult to envisage other cases where the same rule would operate to the advantage of non-resident parents and their families: one only has to increase the level of net weekly income and/or reduce the rate of CTC.

(e) Moreover, even if it were permissible merely to compare the treatment of CTC under the old and new schemes, it would still be logically impossible to treat one of the two rules as the benchmark for judging whether the other was discriminatory. Both schemes involve taking money from one parent and giving it to the other for the benefit of the qualifying child. If the different treatment of CTC is treated as 'discriminating' against non-resident parents under the new scheme, then—as a matter of logic—it must also be treated as 'discriminating' against parents with care under the old scheme. As both schemes are in force at the same time, albeit in relation to different people, it is not possible that both those conclusions are correct: therefore neither is.

(f) The same applies when one looks at the effect of the schemes as a whole. The fact, if it be, that the father would be better off under the old scheme does not, without more, mean that the new scheme is discriminating against him. It is equally possible that the old scheme discriminates against those in the position of Rebecca's mother or that, as I judge, there is no discrimination at all.

(g) For those reasons, even if (as the Secretary of State accepts) Article 8 and 14 of the European Convention on Human Rights are engaged in this appeal; and even if (which I doubt) the father is in a position that is analogous to a person whose financial circumstances are the same but who falls to be assessed under the old scheme; and even if (which I greatly doubt) whether being assessed under the new scheme or the old scheme amounts to an 'other status' for the purposes of Article 14, I hold that the difference in treatment is justified as being within the margin of appreciation afforded to the Secretary of State. The Secretary of State is entitled to establish schemes by reference to general rules without seeking to reflect the individual circumstances of every person affected by the scheme. The new scheme taken as a whole does not necessarily disadvantage non-resident parents, or even non-resident parents whose households include relevant other children. The effect produced by the rules in this case is not discrimination but, at most, an anomaly such as may arise in any technical scheme.

It follows that the father's appeal fails on the substantial issue. The Secretary of State was correct to include the CTC paid to the father and his partner as part of the father's net weekly income.

The effective date of the calculation

I have, however, set the tribunal's decision aside because it erred in law by deciding that its revised decision should be effective from 19 July 2005.

That effective date was originally determined by the Secretary of State under regulation 7B(21) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999. That regulation would have applied had a maintenance calculation been in force in respect of James but, as it turns out, there was no such calculation and therefore regulation 7B(21) did not apply. Rather, the application made by Rebecca's mother fell to be treated as a new application and, under regulation 25(3) of the Child Support (Maintenance Calculation Procedure) Regulations 2000, was effective from 12 May 2005, the date on which the MEF was sent to the father. The tribunal should have corrected the effective date of the calculation as well as corrected the figure for the father's liability.

It only remains for me to explain why I have accepted the figure of £33 as the father's weekly liability. My decision on the main issue confirms the father's net weekly income as being £272.03 and that figure remains subject to the 20% reduction to £217.62 per week because of the two relevant other children. However, the fact that James was not a qualifying child meant that the applicable percentage reduced from 20% to 15% and that no apportionment was appropriate. The father's unrounded liability was therefore 15% of £217.62, which is £32.64. Rounding that figure to the nearest whole pound gives a liability of £33.00 per week.

Conclusion

For those reasons, my decision is as set out at paragraph 2 above.

(Signed on the original)

Richard Poynter
Deputy Commissioner
26 June 2008