Upper Tribunal (Administrative Appeals Chamber)

 

Before: Upper Tribunal Judge PA Gray

 

 

District Tribunal Judge Lazenby having granted permission to appeal, and submissions and further comments made following my directions having been received, and no party having sought an oral hearing of the appeal I have made a decision upon the papers before me.

 

Decision: The fathers appeal to the Upper Tribunal is dismissed. The decisions of the First-Tier Tribunal sitting at Birmingham on 3 December 2012 stands.

 

REASONS FOR DECISION

 

1.     The appellant and the second respondent are the parents of Megan and Lauren. They live with their mother, the Parent with Care, and their father, the Non-Resident Parent in the terms of the applicable legislation, is liable to make child support maintenance payments for them. I will refer to the parents as the mother and the father in this decision.

 

2.     The Secretary of State for Work and Pensions is the first respondent, the DWP having taken over the functions of CMEC (formerly the CSA) from 1 August 2012 under a transfer of functions order.  I will refer to the first respondent as the agency in this decision.

 

3.     The father has remarried, and with his wife, who has represented him during these proceedings, he has three further young children, Emil, Leila and Nelson. 

 

4.     The grounds of appeal centre upon the calculation by the agency and to be First-Tier Tribunal (FTT) of evidence concerning the father’s net income. I have looked at the papers below and at the Secretary of State’s submission to this Tribunal and the father's reply.  The mother has made some brief general comments, but has otherwise played no part in these proceedings.   I have considered the relevant case law and the statutory child support scheme in the broader context of the human rights and discrimination issues that have been raised.

 

5.      Child support maintenance in this case is based on the statutory scheme which came into place on 3/3/2003, still referred to as the "new rules". 

 

The grant of permission to appeal

 

6.     The District Tribunal Judge who had made the decisions on 3 December 2012 granted permission to appeal upon the discrimination issue which I will deal with below, which he felt may be arguable. He had made his decision based upon Upper Tribunal case law which had considered the same legislative provision in somewhat similar circumstances.  This was a decision of Deputy Commissioner Poynter (as he then was) in CCS/738/2007.  That decision was binding upon the FTT, and is of persuasive authority before me.

 

 

The procedure in the Upper Tribunal

 

7.     The Secretary of State’s short submission (which supplemented a longer submission from the agency in the original response) supported the decision of the FTT.   It referred to the case of VL-SSWP [2012] UKUT (AAC) 10, which the father then indicated he was having some difficulty finding. I directed that a copy be sent to him and he was given an opportunity to make further submissions.  The father made a further submission, the mother did not. 

 

8.     No party has requested an oral hearing. I am satisfied that I am able to decide matters fairly on the papers before me, and I can explain to the father why his careful and well researched submissions do not result in the remedy that he seeks. 

 

The procedural history below

 

9.     The appeal to the FTT was made on 1/9/11 against a decision dated 8/8/11.  That decision was revised on 30/10/11, and the revision was not to the advantage of the father, so his appeal proceeded, but was treated as being against the revised decision in accordance with regulation 30 (3) Social Security and Child Support (Decisions and Appeals) Regulations 1999

 

10. The revised decision was that the father should pay £29 per week for the maintenance of Megan and Lauren from an effective date of 29/6/11. The father's appeal was upon a limited point.  That was the treatment of what he has throughout claimed to be his wife’s child tax credit award, which under paragraph 13A of Schedule 1 of the Child Support (Maintenance Calculations in Special Cases) Regulations 2000 is taken into account as income to be assessed within the child support calculation.

 

11. Whilst there has been no challenge as to the way in which the provision operates, it is useful to set it out the relevant part at this stage.   It appears in the schedule to the regulations under which income is calculated. These are the Child Support (Maintenance Calculation and Special Cases) Regulations 2000.   This provides for the net weekly income calculation of the non-resident parent to include tax credits as follows:

 

  ‘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.

 

12. That is a mandatory inclusion; there is no discretion as to whether or not to include the amount of Child Tax Credit received. (R(CS)3/09).  This is of importance because under section 2 of the Child Support Act 1991 the welfare of any child affected by a discretionary decision under the Act must be considered.  That is not the position in this case.

 

13. The father’s concerns as to the operation of the paragraph related to what he perceived as the unfairness of the inclusion, and that he saw no literature regarding that on the relevant government website.

 

14.  As to the latter point, whilst I appreciate the reliance that people place on accessible public information I am considering the legal issues not upon the information available on a government website or indeed in any aide memoire or legal guide, but according to the legislation passed by Parliament.   

 

The legal issues

 

15. The father’s argument as to the unfairness of the inclusion of the child tax credits has developed as the case progressed. I will deal firstly with the contention that the tax credit award was in fact that of his wife, and amounted to her income, and therefore should not be included in the calculation of his maintenance for Megan and Lauren.

 

Whose income?

 

16. The award of tax credit where a couple are married or living together as if they were married is a joint award.  The obligation is to apply jointly, the award is made jointly, and it is joint income. (CCS/738/2007) The father is as much entitled to the income as his wife despite the fact that the payment may be being made to her and that entitlement arose due to her working, rather than him working or both of them working.  If there were at any time an overpayment of the award, they would be jointly liable to repay it.  The payment for convenience is made to one of a couple, in this case the father's wife. As set out above any such payment made to either a non-resident parent or their partner is captured by paragraph 13, and must be included within the net income calculation of the non-resident parent.

 

The human rights issue

 

17.  The father has mounted a human rights challenge invoking his wife’s article 6 rights and her rights under article 14, relying upon article 1 of the first protocol or article 8 to engage article 14. 

 

18. The Article 6 argument has been made in relation to the father's wife's lack of standing in the FTT appeal.  I do not consider that this point has merit.

 

19.  Article 6 (1) provides "in the determination of his civil rights and obligations … everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law …" .

 

20. There is a power in rule 9 of the Tribunal Procedure (First-Tier Tribunal) (Social Entitlement Chamber) Rules 2008 to add or substitute a party to proceedings before the FTT. That rule is of wide ambit, and will be exercised in conjunction with the overriding interest set out in rule 2, which is broadly to do justice.  It is routinely used in child support cases to join parents with care from other Assessment Units where there is an appeal which may affect their entitlement.  It is wide enough to encompass the father’s wife in this case. 

 

21. I think it doubtful that the breach of the article 6 rights of someone who is not a party to proceedings can succeed as a ground of appeal within those proceedings. Where someone is not a party they have no status; there is no determination of their civil rights or obligations. They are not part of the dispute. If someone applied within proceedings to become a party and was joined then their article 6 rights would arise within those proceedings; if an application to be joined at first-tier level was refused there would be the remedy of judicial review available to challenge that decision. This is not a point which has been argued before me and it is not central to this decision. I do not need to decide it for that reason and I base my decision upon another perhaps more understandable reason which concerns the fairness of the proceedings before the FTT in relation to any civil rights which may attach to the father's wife.

 

22. There was no application to join the father's wife and the FTT in failing to consider that point of its own volition within its inquisitorial role did not disadvantage any party or the father's wife.  This is not a case where the father’s interests deviate from those of his wife, indeed she represented him at the FTT and has represented him in these proceedings.  The purpose of joining a person who may be affected by a decision made is to enable that person to hear the evidence and put their point of view.  Throughout, the father’s wife’s argument has been put across in the submissions made on behalf of the father (some of which I think have been drafted by her as his representative). His case has been based almost entirely upon matters from her perspective. Her role as his representative has meant that she has had access to all the papers in the case and has been present at the oral stages.   Even had he not wished to appoint her as his representative the Tribunal Procedural Rules give a wide discretion to a judge to allow the parties to be accompanied and for others, even if they do not have the status of representative, to make submissions; it is a flexible and user-friendly jurisdiction.

 

23. It may be said that the point I raised above as to the father's wife being unable to mount the human rights challenge which has been and remains under consideration as a non-party would have been the reason for joining her, and it may well have been, had that course been considered. I look once again at the actual position, and her human rights challenges have been dealt with as if she were a party. I continue to consider them, and, as will be seen below, make this decision upon the basis that it she has rights that are capable of founding arguments within these proceedings.

 

24. As a matter of fact there been no unfairness in the appeal process, and I reject the argument that there has been any breach of her article 6 rights. 

 

The discrimination claim

 

25. The father’s claim is that the 2003 child support scheme is indirectly discriminatory to women due to the application of paragraph 13A of Schedule 1 of the Child Support (Maintenance Calculations in Special Cases) Regulations 2000.   He argues that child tax credits are a possession within the meaning of article 1 of the first protocol to the European Convention on Human Rights, thus his wife's property rights are engaged and she is being deprived of her property (the child tax credits which are awarded for the support of their family) by the inclusion of them in his income for child support maintenance purposes. Article 14 (linking to both article 8 and article 1 of protocol 1) is engaged because the interference amounts to indirect discrimination on the grounds of sex. The discrimination against women is upon the basis that women form the majority of partners of non-resident parents.

 

26. I have already said that I do not accept that the child tax credits belong to the father's wife; they are entitled jointly, however I accept that entitlement to child tax credits falls within the ambit of article 1 of the First Protocol to the European Convention on Human Rights (R (RJM) v Secretary of State for Work and Pensions [ 2008 ]UKHL 63 ) thus article 14 is potentially engaged.  I will deal with the discrimination point upon that basis, consequently I do not need to consider article 8 issues specifically. (Burnip-v-SSWP[2012] EWCA Civ 629 at paragraph 6) although I take into account the general points made by the father in respect of his family life, and return to this point at paragraph 38.

 

27. Although I have seen no evidence to support the father's contention as to the majority position of women as non-resident parent's partners, he says in his submission to the FTT at page 111 that the ONS statistics bear this out. For the purposes of the argument in this case I am prepared to accept that, and that indirect discrimination to women is shown. The issue is whether that enables me to disapply the provision aggregating child tax credits paid to the father's wife as part of is net income within the child support scheme.

 

28. The father doubts the applicability of Judge Poynter's decision in CCS/738/2007, which formed the basis of the decision in the FTT. That case involved a discrimination allegation in relation to paragraph 13A contrasting the treatment of tax credits within the original scheme (the old rules scheme) with the new scheme under which this case has been assessed.  The argument was that the new scheme was in effect impugned by that particular paragraph. I appreciate that the circumstances are not exactly the same as this case, nonetheless legal principles frequently have a more general application; a case does not need to be factually equivalent for me to either follow it, or, in the case of a decision of a higher court, be bound by it. The conclusion of Judge Poynter was that taken as a whole the new child support scheme was not discriminatory.  As I have already indicated I predicate this decision upon the basis most favourable to the father, treating his case for the purposes of this decision as if indirect sex discrimination had been made out, and assuming a comparable group in a relevantly similar situation against which his wife is disadvantaged. I do not need, in those circumstances, to discuss that case further. I will consider simply whether such discrimination is justified.

 

29. Relevant to that consideration is the decision of the House of Lords in SSWP-v-M [2006] UKHL 11.  It concerned a child support case and a challenge to the way in which the original scheme calculated housing costs which differed as between a single sex couple and a heterosexual couple.  The House of Lords, having acknowledged the difference in treatment, decided that the difference was proportional the context of the child support scheme as a whole.   Once again the case is not entirely analogous, but the principle that a specific difference in treatment based upon gender can be justified within the overall context of social policy driven legislation is apposite. 

 

30. Recent jurisprudence has tended to the view that a strict view as to proportionality was required in the case of certain discriminatory provisions; where the discrimination was based upon, for example race or sex "weighty reasons" were required to justify it.  (AM(Somalia)-v-Entry Clearance Officer[ 2009]EWCA Civ 634 at paragraphs 15-16 and 61-2, and Burnip-SSWP.

 

31. In the case of Humphreys (FC) v The Commissioners for Her Majesty's Revenue and Customs [2012] UKSC 18 the Supreme Court analysed the child tax credit regime and emphasised the importance in the context of possible discrimination of the larger picture. They concluded that the "no-splitting" rule for child tax credits where there was a minority carer was a reasonable rule for the state to adopt and that indirect sex discrimination was justified. Although the circumstances are not identical the principle is again being stated that discrimination, even with regard to a personal characteristic such as gender, can be justified where the state is pursuing a legitimate social aim.  Further the “weighty reasons” test is ameliorated in respect of state benefits. Baroness Hale delivering the judgement of the Court reprised the test in Stec v United Kingdom (2006) 43 EHRR 1017.

 

“The proper approach to justification in cases involving discrimination in state benefits is to be found in the Grand Chamber's decision in Stec v United Kingdom (2006) 43 EHRR 1017 The Court repeated the well-known general principle that "A difference of treatment is, however, discriminatory if it has no objective and reasonable justification; in other words, if it does not pursue a legitimate aim or if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be realised" (para 51). However, it explained the margin of appreciation enjoyed by the contracting states in this context (para 52):

 

 "The scope of this margin will vary according to the circumstances, the subject-matter and the background. As a general rule, very weighty reasons would have to be put forward before the Court could regard a difference in treatment based exclusively on the ground of sex as compatible with the Convention. On the other hand, a wide margin is usually allowed to the State under the Convention when it comes to general measures of economic or social strategy. Because of their direct knowledge of their society and its needs, the national authorities are in principle better placed than the international judge to appreciate what is in the public interest on social or economic grounds, and the Court will generally respect the legislature's policy choice unless it is 'manifestly without reasonable foundation.'"

 

32. Having discussed how this had been interpreted in a number of cases she then went on to say at paragraph 19

 

"It seems clear from Stec, however, that the normally strict test for justification of sex discrimination in the enjoyment of the Convention rights gives way to the "manifestly without reasonable foundation" test in the context of state benefits"

 

33. The child support scheme is clearly a “measure of economic or social strategy” as envisaged by the paragraph quoted from Stec. The scheme is an overarching approach to the assessment, collection and enforcement of maintenance for the children of separated parents which interlocks with the state benefit system, importing aspects of benefit entitlement into the assessment and calculation process, and with the appeals system mirroring that which exists in relation to state benefits.  I place it into a similar category as schemes designed to regulate entitlement to state benefits, and I read the "manifestly without reasonable" foundation test set out by Lady Hale across into the child maintenance scheme. That view of the scheme as an instrument of social policy also derives some support from SSWP-v-M and R (Qazi)-SSWP (reported as R (CS) 5/04) which I mention further below.

 

 

 

 

 

The father's main points discussed in light of Humphreys

 

34. Despite not being subject to the more strict test, scrutiny is required to see whether the discrimination lacks a reasonable basis.   With that in mind I consider the father's main arguments.

 

35. The father claims that the treatment of the tax credit award is socially divisive to non-resident parents in their relationship with a new partner, and can create unjustified hardship for the children of the new relationship. He argues as a backstop position that some apportionment based perhaps upon the respective earnings of each partner may be appropriate. In support of that he cites the difference in treatment between working tax credit and child tax credit within the same schedule.  As regards working tax credit where a joint award is in payment some apportionment takes place which is earnings dependent vis-a-vis the earnings of the other partner under paragraph 11(2).

 

36. Working tax credits and child tax credits bear a similar name, but they are essentially different. Working tax credit is an earnings top-up, related specifically to the number of hours worked and the amount earned. Child tax credit is payable to all at an amount per child based upon income and up to a maximum level of income.  It is not for me to say whether it would be possible or desirable to split it between partners as suggested or on some other basis; I do not speculate as to the difference in approach in the legislation to the two types of tax credit.   I look at the scheme as a whole, and consider whether the provision taking child tax credit into account as the income of the non-resident parent is unreasonable in the sense I have explained above.

 

37. There is a provision in relation to the calculation of income whereby an allowance is given against income. For two children that is a 20% reduction in net income.  It would appear to be a policy decision that the child tax credits paid by the state towards the maintenance of those children should be brought into account as income before the deduction is made.   Any disadvantages to the father’s wife must be considered in terms of the legislation as a whole and the social context of the scheme. I am of the view that any discrimination is not manifestly without reasonable foundation. 

 

38. The case of R (Qazi)-SSWP concerned a human rights challenge by way of judicial review to the child support departures scheme in relation to the costs of maintaining contact with qualifying children.  Charles J assumed engagement and infringement of the appellant father’s article 8 rights, together with engagement of article 1 of the first protocol. In dismissing the claim the learned judge, making reference to 2 cases, R (Plumb)-v-SSWP [2002]EWHC 1125 (Admin) and Campbell –v-South Northamptonshire DC and SSWP[2004]EWCA (Civ) 409 (reported as R (H) H/04), agreed with the approach that the child support regime was a response to a pressing social need, and "in respect of it the executive enjoys a wide margin of appreciation in its policy decisions".  In the particular circumstances of the case, while he accepted that the financial position brought about by the regulations under consideration was a disincentive to the father maintaining contact with his daughters that, and other competing considerations relating to the proportionality argument was outweighed by the policy aspects.  In this case, even though I accept that there may be some force in the father's arguments that the treatment of child tax credits causes difficulty with new relationships to both the adults and children involved in those, the breadth permitted to the legislature in relation to their policy decisions weighs more heavily. 

 

39. The father, together with his wife who has been representing him in these proceedings, has researched the issues and set them out well; his arguments have required very careful consideration. I have assumed indirect discrimination against those in the position of the father's wife, that being the high point of the father's argument, but even upon that assumption his case fails. 

 

40. His difficulty is that the child support legislation is an arm of social strategy.  It has been enacted for the purpose of ensuring that the biological parents of children contribute to their upbringing where they live apart.  The actual number of those that it affects is unknown to me, but it must run at least into the hundreds of thousands.  It is clearly designed as a scheme to be both broad in its catchment and simple in its approach.  It replaced the initial scheme which was so complex that it was thought to be impractical. Since it is by its nature a general rather than an individualised tool it and any such scheme is likely to fail the few in its attempt to do justice to the many. 

 

41. For these reasons the father’s arguments in relation to the various alleged interferences with Convention rights concerning family life, the quiet enjoyment of property, the fair resolution of civil disputes and the right not to be the subject of discrimination cannot succeed.  I confirm the decision of the FTT to include the disputed child tax credit income within the father's net weekly income calculation, and I dismiss the appeal accordingly.

 

 

 

 

 

(Signed on the original) PA Gray

Judge of the Upper Tribunal

17 October 2013