UK Social Security and Child Support Commissioners' Decisions

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Cite as: [2008] UKSSCSC CF_2826_2007

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CF/2826/2007

DECISION OF THE SOCIAL SECURITY COMMISSIONER

This is an appeal by the claimant (Mr. F), brought with my permission, against a decision of an appeal tribunal sitting at Southampton on 17 May 2007. For the reasons set out below that decision was in my judgment erroneous in law. I set aside the Tribunal's decision and remit the matter for redetermination by a differently constituted appeal tribunal. If follows from what I say below that the only issue for consideration by the new tribunal will be whether Mr. F is entitled to child benefit in respect of the period from 28 November 2006 to 17 December 2006 on the ground that either or both of the children were during that period no longer living with Mrs. F within the meaning of s.143(1) and (2) of the Social Security Contributions and Benefits Act 1992.

The facts

On 1 December 2006 Mr. F made a claim for child benefit in respect of his two children, Benjamin, who was born on 4 October 1988 and Lucy, born on 22 June 1990. He stated in that claim form that he had separated from their mother (Mrs F) in 2003, and that Benjamin had been living with him in Winchester since February 2006 and Lucy since September 2006. He stated that before those dates the children had been at boarding school and had had their base with their mother (in Southampton).

At all material times down to the date of Mr F's claim Mrs. F had been in receipt of child benefit in respect of the children.

On 8 December 2006 HM Revenue and Customs (HMRC) sent forms to Mr. F requesting further details as to who the children had been living with. He responded on 14 December 2006 stating that Ben had come to live with him on 1 February 2006 and Lucy on 5 July 2006, but that they had lived with Mrs. F between 12 September 2006 and 21 October 2006.

On 22 December 2006 HMRC sent a similar form to Mrs. F. It appears that Mrs. F initially responded by telephone. On 4 January 2007 she confirmed in writing what she had said on the telephone, which was as follows. In recent months the children had been living "between my home and [Mr F's ] new residence. Sadly no genuine record has been kept of the actual time spent at either address, suffice to say I have felt up until very recently that their main home has been with me." She said that when Mr. F had bought his house in Winchester in February 2006 Ben started staying there during the week but would often return to Southampton when Mr F was either busy or unwell or if he wanted to see friends in Southampton. She stated that both her son and daughter "would always come and stay with me for all of the weekend." She concluded by saying that she felt that it was reasonable for Mr. F to start receiving the child benefit from then on.

On 2 January 2007 (i.e. presumably after receipt of the phone call from Mrs. F), a decision was made by HMRC that (a) Mr. F was not entitled to child benefit in respect of the period before 27 November 2006 because benefit had already been paid to Mrs. F and (b) he was not entitled to child benefit in respect of the period from 27 November 2006 to 24 December 2006 because Mrs. F had priority of entitlement for 3 weeks following the week in which Mr. F's claim was made. Mr. F was notified of that decision by letter dated 3 January 2007, and child benefit was in fact paid to him in respect of the period from 25 December 2006. I infer from the terms in which the decision of 2 January 2007 was couched that, as at the date of Mr F's claim, payment of child benefit had been made to Mrs. F only down to 27 November 2006, and that payment in respect of the additional period after that date was only made to her at some time after 1 December 2006.

On 17 January 2007 Mr. F appealed against the decision made on 2 January 2007, reiterating that Ben had lived with him since 1 February 2006 and Lucy since 5 July 2006. He further said that he had been led to believe that he would be paid from 1 September 2006.

On 30 January 2007 HMRC revised the decision of 2 January 2007. By the revised decision it was decided that Mr. F was entitled to child benefit from 18 December 2006 (i.e. a week earlier than under the original decision).

The letter notifying Mr. F of the revised decision stated that separate arrangements would be made for payment of the arrears in respect of the period from 18 December 2006 to 24 December 2006. That letter referred to the contentions which had been made by Mr and Mrs. F as to the times when the children stayed with each of them, and then continued:

"After looking at all the information and facts it has been decided that in the absence of a claim from you [Mrs. F] is entitled to child benefit for Benjamin and Lucy because they spend time with her each week.

When a claim is received from another person, the person already awarded benefit has priority of entitlement over the other person until the end of the third week following the week in which the claim was made. This is to allow time to transfer benefit from one claimant to another. As your claim was made on 1 December 2006, [Mrs. F] has priority of entitlement up to and including 24 December 2006. However, [Mrs. F] has surrendered her priority of entitlement having received payment up to and including 17 December 2006."

On 9 February 2007 Mr. F signed a further appeal form. He said that since coming to live with him the children had not regularly visited Mrs F, "not every weekend more like once a month over night – then mother often away."

HMRC's written submission to the Tribunal concluded as follows:

"13. I submit that Child Benefit cannot be paid before the week a claim is received, where benefit has already been paid to another person unless an officer of HMRC, Tribunal or Commissioner has decided that that person was not entitled to benefit and the benefit has either been required to be repaid or has been voluntarily repaid.

14. In this case an officer of HMRC cannot revise the decision given on 30 January 2007 as it has been accepted that [Mrs. F] satisfied the conditions of entitlement throughout the period in dispute.

15. I respectfully submit that the Tribunal cannot overturn the decision made on [Mrs. F's] entitlement as their jurisdiction relates only to the decision under appeal ….. This means that Mr. F's entitlement can only be considered from the end of the third week following the week in which the claim was made.

17. I submit that as Mr. F's claim was received on 1 December 2006, [Mrs. F] has priority up to and including 24 December 2006 and therefore Mr. F is not entitled to Child Benefit for Benjamin and Lucy before 25 December 2006.

18. However [Mrs. F] surrendered her entitlement from 18 December 2006".

At the hearing before the Tribunal Mr. F contended that the question of priority of entitlement did not come into it because Mrs. F had not been entitled to child benefit because the children were not living with her. Mrs. F should have disclosed to HMRC that the children had ceased living with her, and HMRC was entitled to recover the child benefit from Mrs. F but had failed to investigate the matter properly or do its job. He contended that the Tribunal had power to award him the benefit and whether HMRC claimed it back from Mrs. F was up to them.

The Tribunal dismissed the Claimant's appeal. The essential part of its reasoning was as follows:

"3. This is not an appeal against the award of benefit to [Mrs. F] and no issue arises as to her entitlement to benefit; the Appellant himself concedes that the Tribunal has no power to remove her benefit. Consequently any evidence about whether she satisfied the conditions at any time is irrelevant. This is why the Tribunal regarded it as unnecessary to hear evidence from the Appellant's witness, Mr. Rabley, as to where the children were living at any particular time.

4. It is a fact that when Mr. F made his application there was an existing award in favour of his former wife; she was, therefore, already entitled to Child Benefit, and, since under the legal provisions where two or more person would otherwise be entitled only one can receive benefit, the Tribunal has to determine priority under the statutory rules. Under those rules the person who is already in receipt of benefit has priority until the end of the third week following the week in which the claim was made unless that person surrenders entitlement, which [Mrs. F] did from 17 December 2006.

5. This means that under the statutory rules the Appellant had no entitlement to Child Benefit prior to 18 December 2006, and his award can only be made from that date. In order for the conflicting claims to have been considered from an earlier date, the Appellant would have had to have applied earlier."

In this appeal to me it was initially submitted on behalf of HMRC as follows:

"10. The tribunal had the authority to consider whether the competing claimants in each case satisfied the basic entitlement conditions for child benefit. I draw support for this from decision CSF/2/88. Accordingly, the tribunal ought to have considered whether the priority situation actually arose. The tribunal erred in law by proceeding to work through the priority rules without considering whether both claimants satisfied the basic entitlement conditions for child benefit.

11. In my submission it was open to the tribunal to conclude that the claimant's former partner did not satisfy the basic qualifying conditions for child benefit and so find that the claimant qualified for child benefit under the normal rule in section 143(1)(a) of the Social Security Contributions and Benefits Act 1992. That said, it is my submission that operation of section 13(2) of the Social Security Administration Act 1992 could still prevent the payment of child benefit to the claimant for the period prior to the date his claim actually arrived. In order for the claimant's claim to be backdated HMRC would need to revise his former partner's award to show that she was not entitled to child benefit for that period and further, find that the consequential overpayment was recoverable from her. The decision to revise, or not revise, is these circumstances is not a matter for the tribunal in the present case, however.

12. I submit that the tribunal erred in law by proceeding to work through the priority rules without considering whether the claimant's former partner satisfied the basic entitlement conditions for child benefit. I support the appeal and request that the Commissioner sets the tribunal's decision aside and send these matters to a fresh tribunal for determination."

However, in a subsequent submission HMRC, after receipt of a draft of this decision, has agreed with the substance of the conclusions set out below.

The relevant legislation

I shall refer only to those provisions of the legislation which are of direct relevance. Additional provisions may of course be relevant in other circumstances.

Both Benjamin and Lucy were at all material times "qualifying young persons" for the purposes of the child benefit legislation. Most of the child benefit provisions apply equally to children (i.e. persons who have not attained the age of 16) and qualifying young persons. For the sake of simplicity I shall, in summarising the legislation, refer to all these persons simply as "children", and in citing the legislation I shall omit the references to "qualifying young persons."

By s.141 of the Social Security Contributions and Benefits Act 1992 ("the SSCBA 1992") a person who is responsible for one or more children in any week is entitled to child benefit for that week in respect of those children. By s.143(1) of that Act a person is to be treated as responsible for a child in any week if (a) "he has the child living with him in that week" or (b) he is contributing to the cost of providing for the child at a weekly rate not less than the weekly rate of child benefit.

By s.144(3) of the SSCBA:

"Where, apart from this subsection, two or more persons would be entitled to child benefit in respect of the same child for the same week, one of them only shall be entitled; and the question which of them is entitled shall be determined in accordance with Schedule 10 to this Act."

Schedule 10 to the SSCBA is headed "priority between persons entitled to child benefit." By para. 1 of Schedule 10:

"(1) Subject to sub-paragraph (2) below, as between a person claiming child benefit in respect of a child for any week and a person to whom child benefit in respect of that child for that week has already been awarded when the claim is made, the latter shall be entitled.

(2) Sub-paragraph (1) above shall not confer any priority where the week to which the claim relates is later than the third week following that in which the claim is made."

By s.13(1) of the Social Security Administration Act 1992 ("the SSAA 1992"), no person shall be entitled to child benefit unless he claims it. By reg. 6(1) of the Child Benefit and Guardian's Allowance (Administration) Regulations 2003 the time within which a claim for child benefit is to be made is 3 months beginning with any day on which, apart from satisfying the conditions for making the claim, the person making the claim is entitled to the benefit. In order words, a claim can in general be backdated for 3 months.

By s.13(2) of the SSAA 1992:

"Except where regulations otherwise provide, no person shall be entitled to child benefit for any week on a claim made by him after that week if child benefit in respect of the same child has already been paid for that week to another person, whether or not that other person was entitled to it."

By reg. 38(1) of the Child Benefit (General) Regulations 2006 ("the 2006 Regulations"):

"A person is not disentitled to child benefit by virtue of section 13(2) of the Social Security Administration Act 1992 …… if in respect of that week –

(a) the determining authority has decided that the Commissioners are entitled to recover the child benefit paid in respect of that child from a person in consequence of his misrepresentation of, or failure to disclose, any material fact and, where that determining authority is one from whose decision an appeal lies, the time limit for appealing has expired and no appeal has been made; or

(b) the child benefit paid to the other person has been voluntarily repaid to, or recovered by, the Commissioners ………."

Analysis and conclusions

It is clear from the terms of s. 144(3) of the SSCBA 1992 that the rules of priority in Schedule 10 to the SSCBA 1992 only apply where, apart from s.144(3), two or more persons would be entitled to child benefit. The rules of priority therefore do not generally apply where only one person is entitled under the primary rules. Mr F and the Secretary of State are therefore correct in submitting that in general the rules of priority do not apply if, for example, the children are living with only one parent and the other is not contributing to the cost of providing for them.

However, by virtue of s.13(2) of the SSAA 1992 and reg. 38(1) of the 2006 Regulations, Mr F could not in any event be entitled to child benefit in respect of any period (i) before the date of his claim and (ii) in respect of which benefit had already been paid to Mrs. F by the date of that claim, unless either a decision has been made that the benefit already paid to Mrs. F is recoverable from her or it has been voluntarily repaid by her.

It is submitted by Mr F and HMRC that the Tribunal should have considered whether, in respect of the three month period before the date of claim, the children were living with Mrs. F – i.e. whether Mrs. F satisfied the basic condition of entitlement to benefit. However, the difficulty which I have with that submission is that I do not see that the Tribunal had any jurisdiction to consider that question.

As HMRC accepts, even if the Tribunal had considered that question and decided that the children were not (saving during the period between 12 September and 21 October 2006 – see para. 4 above) living with Mrs. F, the Tribunal could not have made a decision superseding (with effect from the dates when the children ceased to live with her) the award of child benefit which had been made in favour of Mrs. F. Nor could the Tribunal have made a decision that the child benefit which had been paid to Mrs. F was recoverable from her. What was under appeal to the Tribunal was a decision on the Claimant's claim for child benefit. Although, as part of its reasoning in refusing that claim, HMRC did decide that the children were also living with Mrs. F during the material period, I doubt whether that that was tantamount to a separate decision refusing to supersede the award in favour of Mrs. F and/or to a separate decision that the child benefit was not recoverable from her. Even if it was tantamount to such a decision, there was no appeal against that separate decision before the Tribunal. The only persons who, under s.12(2) of the Social Security Act 1998, can appeal against a decision are "the claimant and such other person as may be prescribed." In relation to a decision refusing to supersede an award in favour of Mrs. F, or a decision that the benefit paid to Mrs. F is not recoverable from her, "the claimant" is clearly Mrs. F, not Mr. F. (Regulation 24 of the Child Benefit and Guardian's Allowance (Decisions and Appeals) Regulations 2003 prescribes other persons entitled to appeal, but that does not assist Mr F). There is therefore no way in which Mr. F could have appealed a decision about Mrs. F's entitlement to child benefit, or as to recoverability of benefit paid to her.

I have considered whether the Tribunal could have made a provisional finding that the children were not living with Mrs. F and then adjourned Mr F's appeal and remitted the matter back to HMRC for consideration of whether it should supersede the award in favour of Mrs. F and/or should decide that the benefit which had been paid to her was recoverable for misrepresentation/non-disclosure. However, even if the Tribunal had taken that course, and HMRC had made a decision that the child benefit was recoverable from Mrs. F, and the appeal by Mr. F had then come back before the Tribunal, possibly at the same time as an appeal (if made) by Mrs. F against the HMRC's new decision, the problem would then have been that the HMRC's recoverability decision could not in my judgment have been taken into account by the Tribunal in Mr. F's appeal, because s.12(8)(b) of the 1998 Act would have prevented it being taken into account. The decision that the child benefit was recoverable from Mrs. F would clearly have been a circumstance arising after the date of the decision of 2 January 2007 under appeal to the Tribunal. Even in the circumstances which I have just outlined, therefore, the Tribunal's decision would inevitably have had to be that, so far as the period down to 27 November 2006 (i.e. the date down to which benefit had already been paid to Mrs. F at the date of Mr F's claim) was concerned, Mr. F was not entitled to child benefit because it had been paid to Mrs. F.

Given that that would have had to be the Tribunal's decision, whatever it purported to decide on the issue whether the children were also living with Mrs F, I do not see that the Tribunal can have erred in law, so far as the period down 27 November 2006 is concerned, in not considering and deciding whether the children were also living with Mrs. F.

I do not see that such a result is likely to lead to any unfairness in most cases, or in the present case. Even if one assumes that the children had ceased living with Mrs. F, for child benefit purposes, well before the date of Mr F's claim, and that Mrs. F knew that, the remedy surely lay in Mr. F's own hands in that he could have made a claim for child benefit much earlier than he in fact did.

However, s.13(2) of the SSAA 1992 only applies in respect of weeks before the date of claim in respect of which benefit has already been paid to another person by the date of claim. What is the position where that is not the case? I have said above that by its terms s.144(3) of the SSCBA 1992 only applies the Schedule 10 rules of priority where, apart from that subsection, two or more persons would be entitled to child benefit. Mr. F's argument is that, once the children ceased to live with Mrs. F, she did not satisfy the primary rule of entitlement and therefore it ceased to be the case that, apart from s.144(3), two or more persons would be entitled to child benefit.

However, a person in whose favour an award has been made has entitlement by virtue of his award, unless and until it is revised, superseded or reversed on appeal, and para. 1 of Schedule 10 to the SSCBA 1992 deals with the question of priority where, at the time when a claim is made, there is a subsisting award in respect of any part of the period in respect of which the claim is made.

For ease of explanation I shall refer to the person with the benefit of the subsisting award as A, and to the new claimant as B.

It is clear that, if at the date of B' claim A did continue to have underlying entitlement, and continues to do so for the next 3 weeks, he has priority under paras. (1) and (2) of Schedule 10 in respect of the period prior to the date of B's claim and for the next 3 weeks. Even though B might otherwise have had priority, under the later priority rules in Schedule 10, for some period before the date of B's claim and/or the next 3 weeks, the subsisting award in favour of A cannot be superseded until 3 weeks after the date of B's claim.

It must be further be clear that, if (as Mr F contends in the present case) A ceased to be have underlying entitlement long before the date of B's claim, para. 1 of Schedule 10 does not prevent the decision maker superseding A's award with effect from the cessation of underlying entitlement. In the event of such a supersession, A would not have any priority by virtue of para. 1 of Schedule 10.

But if the decision maker does not supersede the existing award and refuses B's claim, and B appeals, what is the position? In my judgment the position before the appeal tribunal will be simply that A had priority only if and so long as A had underlying entitlement. If A's underlying entitlement had ceased by the date of claim, or ceased during the 3 week period thereafter, B is entitled (subject to the terms of s.13(2), which I have dealt with above) to an award in his favour. The appeal tribunal, although it cannot itself make a decision superseding A's award, can therefore award benefit to B in respect of the period after A's underlying entitlement ceased. This may result (if HMRC does not supersede the award in A's favour) in awards subsisting in favour of two persons in respect of the same child in respect of the same period, but that possibility seems to be contemplated by the terms of s.13(2) of SSAA 1992 itself.

If that is correct, it follows that in the present case the Tribunal, in considering the period after 27 November 2006 (i.e. the date down to which Mrs. F had been paid at the date of Mr. F's claim on 1 December 2006), should have considered whether Mrs. F continued to have underlying entitlement – i.e. whether the children continued to live with her. If it concluded that they did not, it should have allowed Mr. F's appeal to that extent and awarded child benefit to him in respect of the period from 28 November 2006 to 17 December 2006 (benefit from 18 December 2006 having been awarded by the decision maker pursuant to the surrender by Mrs. F).

I do not have the information to decide whether the children had ceased to live with Mrs F at some time before 18 December 2006, and this issue must therefore unfortunately be remitted to a new appeal tribunal. It may be appropriate for the new tribunal to give Mrs. F the opportunity to give evidence to it. She cannot of course be bound by anything which it decides. In considering whether the children continued to live with Mrs. F, for child benefit purposes, the new tribunal should of course take into account, if it is material, s.143(2) of the SSCB 1992, which provides, very broadly, that a child is treated as continuing to live with a person until they have been absent from each other for at least 56 days in the 16 weeks preceding the week under consideration.

Summary of conclusions on issues of law

As I have decided some issues of potential wider importance, it may be helpful to summarise my conclusions on those issues.

Where a claimant (B) is refused child benefit on the ground that there is a subsisting award (in favour of A), and appeals:

(1) As regards any period prior to the date of B's claim in respect of which benefit has at the date of claim already been paid to A: unless, by the date of the decision refusing B's claim, either (i) HMRC has made a decision that the benefit paid to A is recoverable or (ii) A has voluntarily repaid the benefit, the appeal tribunal deciding B's appeal does not err in law in failing to make findings (and indeed has no jurisdiction to make findings) as to whether A was entitled to the benefit. The reasons are simply that (a) the tribunal has no jurisdiction to revise or supersede A's award and (b) it would have no jurisdiction to award benefit to B in respect of that period. See paragraphs 23 to 29 above.

(2) However, as regards (i) any period within 3 months before the date of B's claim in respect of which, at the date of that claim, benefit had not already been paid to A and (ii) the 3 week period after the date of claim: the appeal tribunal is required to decide whether A had ceased to have underlying entitlement. If A had ceased to have underlying entitlement, he did not have priority and the tribunal, even though it has no jurisdiction to supersede the award in favour of A, should award benefit to B. See paragraphs 30 to 37 above.

(signed on the original) Charles Turnbull

Commissioner

11 March 2008