JF v Secretary of State for Work and Pensions (CSM : Child support : receipt of benefit) [2013] UKUT 209 (AAC)

UKUT-AAC

JF v Secretary of State for Work and Pensions (CSM : Child support : receipt of benefit)

[2013] UKUT 209 (AAC) · 2013-05-01

45. Given that uncertainty, I regret that there will need to be a fresh F-tT hearing to establish the facts and apply the law appropriately. The District Tribunal Judge responsible for giving listing directions may well wish to consider(i) joining HMRC as a party to the appeal; and

(ii) directing HMRC to produce all relevant documents relating to the award of child benefit to the mother in respect of J for the period from, say, January 2009. Conclusion

[2014] AACR 3

(JF v Secretary of State for Work and Pensions and DB (CSM)

[2013] UKUT 209 (AAC)

)

Judge Wikeley CCS/506/2012

1 May 2013

Child support – receipt of benefit – whether young person is “a person in respect of whom child benefit is payable” – the meaning of the word “payable” – whether child benefit properly in payment

The appellant’s son lived with the mother (the resident parent). The appellant agreed to pay child support while his son was attending college. In December 2009 the son completed the first year of his City & Guilds course but did not return to college until September 2010. Child benefit continued in payment throughout this period. In March 2011 the son turned 19 years of age whereupon child benefit was stopped and the child support maintenance calculation closed. The appellant appealed against the decision that he was liable to pay child support for the period when his son was not attending college. The First-tier Tribunal (F‑tT) decided that the son qualified as a child under section 55(1) of the Child Support Act 1991, as child benefit remained in payment (it held that “payable” meant “actually paid”). The key issue before the Upper Tribunal (UT) was whether the word “payable” within the context of child support law meant that child benefit was(i) actually paid,

(ii) payable under an award, whether that award was right or wrong, or

(iii) properly or lawfully payable.

Held, allowing the appeal, that:

1. in the present case the word “payable” in the phrase “a person in respect of whom child benefit is payable” in paragraph 1A of Schedule 1 to the Child Support (Maintenance Calculation Procedure) Regulations 2000 (as amended) meant “properly or lawfully payable”. This was consistent both with the usual meaning of “payable” and with the way in which that word had typically been interpreted in previous decisions (paragraphs 25 to 32);

2. the principle established by the Court of Appeal in Secretary of State for Social Security v Harmon, Carter and Cocks

[1999] 1 WLR 163

, also reported as R(CS) 4/99, namely that “paid” means actually paid not properly or lawfully paid, did not apply in this context as the language was not the same; paragraph 1A refers to whether child benefit is “payable”, not whether it is “paid”, and that decision turned on considerations which did not apply in the present case (paragraphs 23 to 24).

The judge set aside the decision of the First-tier Tribunal and remitted the appeal to a differently constituted tribunal to be decided in accordance with his Directions.

DECISION OF THE UPPER TRIBUNAL

(ADMINISTRATIVE APPEALS CHAMBER)

The DECISION of the Upper Tribunal is to allow the appeal by the appellant (the father).

The decision of the Manchester First-tier Tribunal dated 31 October 2011 under file reference SC946/11/04553 involves an error on a point of law. The tribunal’s decision is therefore set aside.

The Upper Tribunal is not in a position to re-make the decision on the father’s appeal against the decision of the Secretary of State (formerly the Child Maintenance and Enforcement Commission) dated 9 March 2011.

It therefore follows that the father’s original appeal against the Secretary of State’s decision is remitted to be re-heard by a different First-tier Tribunal, subject to the Directions below.

This decision is given under section 12(2)(a) and (b)(i) of the Tribunals, Courts and Enforcement Act 2007.

DIRECTIONS

The following directions apply to the re-hearing:

(1) The re-hearing should be at an oral hearing.

(2) The new tribunal should not involve the tribunal judge who sat on the last tribunal on 31 October 2011.

(3) The District Tribunal Judge responsible for listing should consider whether Her Majesty’s Revenue and Customs (HMRC) should be joined to the appeal as a party and invited to make a submission on the issue of child benefit entitlement for the material period (see [5] below).

(4) If either parent has any further written evidence to put before the tribunal, this should be sent to the regional office of HM Courts and Tribunals Service in Liverpool within one month of the issue of this decision.

(5) The Child Maintenance and Enforcement Commission, now the Secretary of State, should be represented at the new hearing by a presenting officer.

(6) The new tribunal must consider all the evidence afresh and is not bound in any way by the decision of the previous tribunal.

These directions may be supplemented as appropriate by later directions by a District Tribunal Judge in the First-tier Tribunal (Social Entitlement Chamber).

REASONS FOR DECISION

The Upper Tribunal’s decision in summary

1. The father’s appeal to the Upper Tribunal is allowed. The decision of the First-tier Tribunal (F-tT) involves an error on a point of law. The tribunal’s decision is therefore set aside as having no effect. Unfortunately the Upper Tribunal is not in a position to re-make the original decision under appeal. It follows that there will need to be a fresh hearing before a different F-tT.

The issue on this appeal

2. This case turns on the meaning of one word: “payable”. In summary, and in certain situations such as the present case, child support law says that a non-resident parent is liable to pay child support where child benefit is “payable” to the parent with care for the child in question. The question is whether “payable” in that context means that child benefit was(i) “actually paid”;

(ii) “payable under an award, whether that award was right or wrong”; or

(iii) “properly or lawfully payable”.

3. For the reasons that follow, I conclude that the proper meaning is meaning (iii). So there is a child support liability on the facts of this case where child benefit was properly or lawfully payable. At the time with which this appeal is concerned, the fact that child benefit was actually paid by Her Majesty’s Revenue and Customs (HMRC) did not mean that a child support liability arose for the same period, if such child benefit was paid in error. This was because the statutory definition of “child” for child benefit and child support purposes respectively was not the same between 2006 and 2012. Whether child benefit was in fact paid in error in this case (between 2009 and 2010) remains unclear. I also note that the definition of “child” for the purposes of both child benefit and child support has now been re-aligned by primary legislation (see [37] below).

The facts of the case

4. Most, but not all, of the facts of the case are clear from the F-tT’s decision and the case papers and are not in dispute. They are as follows. For convenience I refer to the Child Maintenance and Enforcement Commission or the Secretary of State simply as “the Agency”.

5. The parents’ son, J, was born on 8 March 1992. In March 2009, when he was just 17, the Agency decided that the father was liable to pay £60 a week in child support, with effect from 10 March 2009.

6. On 9 December 2009 J left college, having completed the first year of a City & Guilds qualification. In July 2010 the mother advised the Agency that J was “on holiday”, but planning to return to college in September 2010 and was working for a relative over the summer (unconnected with his course).

7. In September 2010 J returned to college to do the second year of his City & Guilds course. On 8 March 2011 J turned 19, and, allowing for the child benefit extension period, his mother’s award of child benefit stopped on 6 June 2011. There had been no breaks in payment of child benefit by HMRC. Meanwhile, on 9 March 2011, the Agency made a supersession decision, closing the child support maintenance calculation with effect from J’s 19th birthday, the day before.

8. The father appealed against the decision of 9 March 2011. He said that he agreed to pay child support for the period from September 2010 to March 2011, when J was back at college. However, he was not happy with paying child support for the period from December 2009 to September 2010 when his son was not at college.

The First-tier Tribunal’s decision

9. The F-tT set out the facts and the law carefully in its decision. The District Tribunal Judge dismissed the father’s appeal. She noted that the appeal turned on the meaning of “payable”. She agreed with the Agency’s interpretation of that word. She concluded that child benefit was “payable” where that benefit was actually in payment, even if on the face of it child benefit was not properly paid during a particular period. However, she accepted that the point was arguable and later gave the father permission to appeal to the Upper Tribunal.

The proceedings before the Upper Tribunal

10. The father’s case is essentially the same as the case he made before the F-tT. His argument is that although child benefit was actually paid between December 2009 and September 2010 it was not properly payable . Accordingly, he says, he should not be liable for child support for that same period.

11. The mother says that she did not want child support in the first place and did not want an argument over it. She adds that she has not claimed anything that she should not have done. She says that she “rang the child benefit and told them my son was working they said as long as it was nothing to do with his course that he could”. It is not actually clear whether she had that conversation with HMRC’s child benefit office – she certainly had such a conversation with the Agency (see [6] above). She also not unreasonably points out that the father stopped making payments to the Agency months ago (J is now 21).

12. Mr Kevin O’Kane, on behalf of the Secretary of State (for the Agency) has provided two submissions on the father’s appeal.

13. In his first submission he opposed the appeal, arguing that the F-tT was entitled to find as it did, namely that where child benefit was actually paid it was therefore “payable” and the child support obligation continued, even though J had ceased full-time education. I then issued further directions, raising some additional points.

14. In his second submission, Mr O’Kane concedes that in the light of the history of legislative changes it was “unlikely that the previous explanation of the term ‘payable’ ... was in fact correct”. He concluded that where child benefit had been incorrectly paid by HMRC, “the definition of ‘child’ for the purposes of child maintenance would not be satisfied and the non resident parent’s liability would fall away”. He does not in terms express a concluded view as to whether child benefit was properly payable on the facts of this case.

The Upper Tribunal’s analysis

The relevant legislation

15. Child support obligations only apply to a “qualifying child” (see Child Support Act 1991 (the 1991 Act), section 3(1)). At the time in question, section 55 of the 1991 Act defined a “child” as follows:

“ Meaning of “child”

55 – (1) For the purposes of this Act a person is a child if –

(a) he is under the age of 16;

(b) he is under the age of 19 and receiving full-time education (which is not advanced education) – (i) by attendance at a recognised educational establishment; or

(ii) elsewhere, if the education is recognised by the Secretary of State; or

(ii) prescribed conditions are satisfied with respect to him. ”

16. In December 2009, when J had left college (at least for the time being), he was 17. Accordingly he did not fit within either subsection (1)(a) or (1)(b). So the question was whether he fell within subsection (1)(c) at that date and so remained a “child” for child support purposes. He obviously met the age condition in subsection (1)(c)(i). So the issue then was whether he also met the specified conditions under subsection (1)(c)(ii).

17. These prescribed conditions were originally set out in paragraph 1 of Schedule 1 to the Child Support (Maintenance Calculation Procedure) Regulations 2000 (SI 2001/157; the CS(MCP) Regulations) under the heading “Persons of 16 or 17 years of age who are not in full-time non-advanced education”. This complex provision specified four separate conditions, the first of which was that the young person was “ registered for work or for training under work-based training for young people ”. There was no evidence that J was registered for work or training in that sense.

18. However, as from 10 November 2009, regulation 4(2) of the Child Support (Miscellaneous Amendments) (No 2) Regulations 2009 (SI 2009/2909; the Miscellaneous Amendments) (No 2) Regulations 2009) amended Schedule 1 to the CS(MCP) Regulations. In particular, it added a new paragraph 1A, providing for a new prescribed condition, as follows (emphasis added):

“Where a person (‘P’) has ceased to fall within section 55(1) of the Act, P is to be treated as continuing to fall within that subsection for any period during which P is a person in respect of whom child benefit is payable . ”

19. As noted at paragraph 2 above, the question is whether “payable” in this context means that child benefit was(i) “actually paid”;

(ii) “payable under an award, whether that award was right or wrong”; or

(iii) “properly or lawfully payable”.

Meaning (i) – actually paid?

20. Meaning (i) reflects the Agency’s original position, as confirmed by the F-tT (but now abandoned by Mr O’Kane), namely that for the period from December 2009 through to his return to college in September 2010, J was “ a person in respect of whom child benefit is payable” as child benefit was actually being paid and so he remained a qualifying child under section 55(1) of the 1991 Act.

21. One difficulty with this interpretation is that the legislation refers to child benefit being “payable”, and not being “ paid or payable”. In his first submission Mr O’Kane referred to the decision of Mrs Deputy Commissioner (now Judge) Ramsay in CIB/3831/1998. The issue there concerned a dependant’s addition to incapacity benefit, where a change in the way the earnings of the claimant’s spouse were calculated meant that entitlement to such an increase had ceased, but payment had continued in error. Under the rules in question, a person ceased to be entitled to such an increase where “no increase ... is paid or payable” for a specified period. The Secretary of State accepted that the increase had been “paid” (albeit in error) but argued that it was not “payable”.

22. Deputy Commissioner Ramsay rejected the argument by the claimant’s representative in that case that there was no difference between “paid” and “properly or lawfully paid” (at paragraph 8). She also ruled that “‘payable’ must refer to the situation where if not actually paid, there is an underlying entitlement” (at paragraph 7). Although the context is different, that decision supports the argument that “payable” in the amended paragraph 1A of Schedule 1 to the CS(MCP) Regulations means “properly and lawfully payable” and not simply “actually paid”.

Meaning (ii) – payable under an award, whether that award was right or wrong?

23. Meaning (ii), that “payable” means “payable under an award, whether that award was right or wrong”, is really just another way of putting meaning (i) but by teasing out its full implications. I have considered whether the case law on the former section 6 of the 1991 Act sheds any light on this issue. The Court of Appeal held that the word “paid”, in the context of the statutory expression referring to whether a means-tested benefit was “claimed by or in respect of, or paid to or in respect of” the parent with care, means simply actually paid, and not lawfully or properly paid (see Secretary of State for Social Security v Harmon, Carter and Cocks

[1999] 1 WLR 163

;

[1998] 2 FLR 598

, also reported as R(CS) 4/99). Millett LJ, giving the leading judgment of the Court, held that the test was “whether or not benefit is claimed by or in respect of the parent with care or is being paid to or in respect of her. It does not depend on whether the benefit in question is benefit to which she is entitled” (at 173C).

24. This authority would appear to support the Agency’s original position and the F-tT’s decision. However, I conclude that the principle in Harmon, Carter and Cocks does not apply in the present context for two reasons. First, the language is not the same: paragraph 1A refers to whether child benefit is “payable”, not whether it is “paid”. Second, the Court of Appeal’s reasons for adopting the construction it did were rooted in the structural inter-relationship between sections 4 and 6 of the 1991 Act, turning on a number of considerations which do not apply in the present case.

Meaning (iii) – properly or lawfully payable?

25. I suggested in unreported Commissioner’s decision CCS/1664/2007 that “the meaning of the term ‘payable’ is not fixed. Like a chameleon, it takes its colour from its context” (at paragraph 16). However, the normal dictionary definition of “payable”, when referring eg to a sum of money, is “that is to be paid; due, falling due”. The reference to “due” suggests there must usually be some underlying entitlement.

26. Thus in Morton v Chief Adjudication Officer

[1988] IRLR 444

, also reported as R(U) 1/88, a case which turned on the meaning of “payable” under the old unemployment benefit scheme, Slade LJ observed that “The word ‘payable’ is not a term of art … It is a word which is capable of bearing different meanings in different contexts” (at 446, paragraph [16]). In Morton itself the Court of Appeal held that an employment tribunal award was “payable” if it was “due and owing” at that time, even if there was little prospect of the award actually being met (because the employer was in liquidation).

27. Similarly, in R(IB) 1/04, the trustees of the claimant’s occupational pension scheme, under the terms of a court order made in divorce proceedings, paid half of the claimant’s occupational pension directly to his former wife. The decision-maker took the view that the full amount of the pension was “payable to” the claimant within the meaning of section 30DD of the Social Security Contributions and Benefits Act (SSCBA) 1992. Mr Commissioner (now Judge) Turnbull disagreed (at paragraph 13):

“... The reality of the situation is that the claimant neither receives them nor is entitled to receive them. They can be said still to benefit him in that they discharge his underlying liability for periodical payments under the court order, but it does not seem to me that they are ‘payable to’ him within the ordinary meaning of those words. There is in my judgment no reason for thinking that those words have in section 30DD(1) anything other than their ordinary meaning ... .”

28. In the present case I have concluded that the word “payable” in the phrase “a person in respect of whom child benefit is payable ” in paragraph 1A means “properly or lawfully payable”. This is consistent both with the usual meaning of “payable” and with the way in which that word has typically been interpreted in previous decisions (eg CIB/3831/1998). Had the intention been to align child support entitlement with the mere fact of child benefit receipt, rather than that of child benefit eligibility (a question of mixed fact and law) then, consistently with Harmon, Carter and Cocks , paragraph 1A could have been easily drafted in different terms, eg as referring to “a person in respect of whom child benefit is paid or payable ”. I am also fortified in this conclusion by considering the legislative history of the relevant provisions.

29. The rules governing entitlement to child benefit, originally set out in the Child Benefit Act 1975, were re-enacted in Part VIII of the SSCBA 1992. These rules were amended as from April 2006 by the Child Benefit Act 2005. There are more detailed provisions in the Child Benefit (General) Regulations 2006 (SI 2006/223).

30. Originally the child support rules followed the child benefit rules in terms of defining who is a “child”. However, although the Child Benefit Act 2005 made extensive amendments to the SSCBA 1992, it made no changes to the 1991 Act. In addition, there were no amendments to the child support regulations (at least initially). The result was that the child support rules no longer mirrored those for child benefit as regards the meaning of a “child”.

31. Consequently, after 10 April 2006, a young person for whom child benefit was payable was no longer necessarily also a child for child support purposes. This was because child benefit was payable to a wider class of young people than “qualifying children” under child support legislation. This mismatch was then belatedly corrected by the amendments to Schedule 1 to the CS(MCP) Regulations, made by the Miscellaneous Amendments) (No 2) Regulations 2009 (which came into force on 10 November 2009). Furthermore, the Explanatory Memorandum to those amending regulations explained as follows (emphasis added):

“7.2 The Commission’s longstanding policy has been that a parent with care of a child or children living with them until their nineteenth birthday and where those parents are eligible for child benefit payments can make an application for child maintenance. This is a simple rule which clients understand and can be effectively administered.”

32. Both the history of these amendments and the policy justification advanced therefore support the construction which I had already arrived at, namely that “payable” means “properly or lawfully payable”.

33. Finally, I should refer to what seems to me the strongest argument for the contrary proposition, namely that “payable” in this context simply means “actually paid”, regardless of entitlement. This argument is that the mother’s entitlement to child benefit for the relevant period was not the subject of any direct appeal before the F-tT. How then could the F-tT have concluded that child benefit was not “payable”? This was plainly a consideration in the Harmon, Carter and Cocks scenario. However, I do not regard this argument as conclusive in the current context for three reasons.

34. First, in those cases under section 6 of the 1991 Act the relevant question was simply whether certain means-tested benefits had been “paid” – here the issue is whether child benefit is “payable”. The issue of a parallel child benefit entitlement is thus part and parcel of the statutory test for child support.

35. Second, it is in any event well established that one tribunal’s finding of fact is not binding on another tribunal. For example, a tribunal’s conclusion that there was no entitlement to income support because the claimant was found to be living together as husband and wife is not in itself binding on a subsequent tribunal which has to determine an overpayment appeal arising out of the same facts (see eg AM v Secretary of State for Work and Pensions (IS)

[2010] UKUT 428 (AAC)

). Providing the party concerned (here the mother) is a party to the present proceedings, and there is no breach of natural justice, then there is no prejudice to her in deciding that issue in the context of the child support appeal.

36. Third, if there is any doubt about the matter, the question can be readily resolved by joining HMRC as a party to the appeal and inviting its submissions on the issue.

37. For completeness I simply observe that as from 10 December 2012, section 42 of the Child Maintenance and Other Payments Act 2008 has substituted a new definition of qualifying child under section 55, designed to complete the process of re-alignment of the statutory definitions.

A further complication

38. The District Tribunal Judge pointed out that the conclusion that “payable” means “properly or lawfully payable” gives rise to a further complication in this case. Thus, if the father was indeed not liable to pay child support maintenance in respect of J from December 2009, the question then was whether his liability revived automatically in September 2010 when J went back to college – or did the case close in December 2009, requiring the mother to make a new application for child support after September 2010?

39. Mr O’Kane relies on my earlier decision in CCS/2153/2004 (at paragraphs 14–25) as authority for the argument that the father’s liability revived automatically in September 2010, and continued until J was 19 in March 2011. However, I am not sure the two cases are necessarily directly comparable. In CCS/2153/2004 there was a younger child involved and so the underlying maintenance assessment continued in place in any event. Here there appears to have been just one child involved.

40. On one view I do not have to decide this issue. This is because the father has already accepted liability for this period (see [8] above), and so this is not a matter raised by the appeal (see section 20(7)(a) of the 1991 Act, as amended by section 42 of the Social Security Act 1998).

41. In any event, the view that the father’s liability revives automatically is consistent with the approach taken by the Court of Appeal in Brough v Law and CMEC

[2011] EWCA Civ 1183

; [2012] AACR 25 . The issue there was the proper interpretation of paragraph 16(1) of Schedule 1 to the 1991 Act in circumstances where the qualifying child’s parents had had a temporary reconciliation. Pill LJ, giving the leading judgment, concluded that “it was not intended that a maintenance assessment would cease to have effect by reason of a short period of the parents living together”, noting that the various sub-paragraphs “contemplate a specific and permanent event” ([37]). Pill LJ approved the reasoning of Upper Tribunal Judge Levenson, who had held ( [2010] AACR 24 ) that paragraph 16(1)(b) was “about there no longer being a qualifying ‘child’, rather than being about the particular child no longer ‘qualifying’”.

(b) :

“... applies to a case in which there is ‘no longer’ a qualifying child. To my mind, that is not the same as a case in which there is ‘not for the time being’ a qualifying child. It suggests something more permanent; such as the former child attaining the age of 16, or leaving full-time education, or marrying, or even dying” (paragraph 59).

42. Given the other examples cited, Lewison .LJ’s reference to “leaving full-time education” must be taken to mean “ permanently leaving full-time education”. It would also be consistent with the policy underpinning the 1991 Act that child support liability would revive in such circumstances, rather than require a fresh claim.

The Upper Tribunal’s disposal of the substantive appeal

43. The father’s case was that his liability to pay child support should have stopped, or at least been suspended, as from December 2009, reviving again in September 2010. This argument was based on the fact that J had left college in December 2009. The father’s assumption is that because J was not in full-time education for the period in question, it necessarily followed that J’s mother was not entitled to child benefit.

44. However, the law is not that simple. As Mr O’Kane pointed out in his first submission, there are circumstances in which a young person under the age of 19 can continue to be treated as in full-time education (or otherwise remain the subject of an award of child benefit) even though he has left college. It is possible that one of those special circumstances applied in this case. The Act governing entitlement to child benefit simply refers to “conditions so prescribed” (SSCBA 1992, section 142(2)). The prescribed conditions are set out in some detail in regulations 2–7 of the Child Benefit (General) Regulations 2006 (SI 2006/223). It is possible, for example, that as of December 2009 J satisfied the education and training condition as set out in regulation 3(2). This refers to young people who have finished one course of full-time non-advanced education and have either enrolled on or been accepted on another such course.

46. For the reasons explained above, the Upper Tribunal allows the father’s appeal. The decision of the First-tier Tribunal is set aside. The Upper Tribunal directs a re-hearing of the case before a new First-tier Tribunal subject to the directions above.