R(CS) 4/02

Mr. J. M. Henty	CCS/1020/2000
6.4.01
Maintenance assessment – protected income – whether “maintenance” includes child support maintenance in the calculation of income
The absent parent was the father of two children who lived with their mother, the parent with care. The absent parent had a partner, who also had two children from previous relationships. She was in receipt of child support maintenance for those children. On appeal to a tribunal against a maintenance assessment, the tribunal decided that the calculation of the absent parent’s protected income should include the child support maintenance which was in payment to the absent parent’s partner. The absent parent appealed to the Commissioner.
Held, allowing the appeal, that:
on the proper construction of regulation 11(2)(a)(i) of the Child Support (Maintenance Assessments and Special Cases) Regulations 1992 “maintenance” does not include child support maintenance.

DECISION OF THE CHILD SUPPORT COMMISSIONER

1.	My decision is that:

	(i)	The tribunal were not in error of law in 
		(a)	the calculation of the AP’s partner’s earnings; or
		(b)	the AP’s earnings; and

	(ii)	the tribunal were in error in
		(c)	the expenses relating to the use of the home as an office; and
		(d)	in the treatment of CSM in relation to reg. 11(2)(a)(i) MASC Regs.

Insofar as be necessary I make the decision I consider that the tribunal should have given on (ii) (c) and (d) pursuant to the powers contained in S 24(3)(a) CSA 1991.

2.	The parent with care (“PWC”) and the absent parent (“AP”) were married and they had two children. The AP pays child support maintenance (“CSM”) in relation to those children. The AP has a partner, who herself has two children, and their absent fathers pay CSM in relation to them.

3.	This is an appeal from the decision of a CSAT dated 28 July 1999. I granted leave on 4 August 2000. I held an oral hearing on 20 February 2001, at which the PWC and the AP each appeared in person, and Miss. Powick of the DSS Solicitors Department appeared for the Secretary of State. At the hearing, the PWC produced a short extract from something that she had, with considerable initiative, obtained on the internet, but the reference to which was mistaken. At the end of the hearing, I adjourned, in order to trace that case. That case was in fact R(CS) 10/99, a case which was concerned with whether maintenance payable under a Court Order was “maintenance” for the purposes of reg. 11(2) MASC Regs. It therefore does not have any relevance to the issues before me.

4.	Those issues concern:

	(i)	the calculation of the earnings of the AP’s partner;

	(ii)	the calculation of the earnings of the AP and his expenses;

	(iii)	the use of part of his home as an office; and

	(iv)	whether, on the construction of reg. 11(2)(a)(i) MASC Regs., CSM paid in respect of the AP’s partner’s children should be taken into account for the purpose of calculating the AP’s disposable income, that is to say whether CSM is included in the term “maintenance” in that sub-paragraph. The Secretary of State submitted that it was not. 

5.	There was no full statement of facts and reasons, but the Chairman wrote a detailed reasoning dated 23 December 1999 (246/7), setting out why he had concluded that “maintenance” did include CSM. This explanation has been of great assistance, even though, in the end, I have decided to disagree.

6.	The principal argument before me related to issue (iv) and I will deal with that issue first.

7.	Is CSM “maintenance” for the purposes of reg. 11(2)(a)(i) MASC Regs.?

There is no authority on the point and, in CCS/4351/1998, while at para. 11 acknowledging that there was a difficult point of interpretation on the regulation, the Commissioner very properly forbore to answer it, as the question did not then directly arise. However, the point does directly arise in the appeal before me, and I am left to decide it as best I can. In this area of law, there seems to pervade an atmosphere almost to the effect that obscurity of expression is good drafting. It is not. If the point had ever been thought of – and it may be that it had not – it would have been a matter of extreme simplicity to have made the position clear.

I now turn to the relevant legislation.

	“Disposable income” is defined in reg. 12 for the purposes of protected income to mean “the aggregate of [the AP’s] income and any income of any member of his family calculated in like manner as under regulation 11(2).”

For present purposes, “family” as defined in reg. 1(2) means:

	“.… (b) a married or unmarried couple …. and any child or children living with them for whom at least one member of that couple has day to day care.”

In this case, I remind myself of the fact that the AP’s partner has two children, of whom she has day to day care, and in respect of whom their respective fathers are paying CSM. Clearly those children, their mother, and the AP are all members of a “family”.

Reg. 11(2) provides

	“…. “income” shall be calculated –

	(a)	in respect of the absent parent in question or any partner of his, in the same manner as N (net income of absent parent) is calculated under regulation 7 except –

		(i)	there shall be taken into account the basic rate of any child benefit and any maintenance which in either case is in payment in respect of any member of the family of the absent parent;

		(ii)	there shall be deducted the amount of any maintenance under a maintenance order which the absent parent or his partner is paying in respect of a child in circumstances where an application for a maintenance assessment could not be made in accordance with the Act in respect of that child; ….”

The purpose of the calculation is a safeguard for the AP, who should be guaranteed not less than his protected income. Reg. 12(2) provides that if a maintenance assessment is made which would reduce the AP’s disposable income below his protected income level, the amount of the assessment is to reduce pro tanto to prevent his disposable income being reduced below his protected income.

The circumstances of reg. 11(2)(a)(i) predicate that the relevant child must be a member of the AP’s family, irrespective of whether the AP is the father or not.

In this case, the PWC submits that the maintenance paid by their respective fathers should be added to the AP’s income under reg. 11(2)(a)(i). Although this would entail a modest rise in his protected income, it would nevertheless greatly increase his disposable income, and would obviate the result, which did occur in this case, that the AP’s protected income exceeded his disposal income, with the attendant result to the disadvantage of the PWC. The PWC submits that it is illogical that a person who has undergone a CSM assessment should be excluded from this advantage, as opposed to a voluntary person who has not. In the chairman’s very helpful reasons he stated he could see no reason why “maintenance” – a very wide term used in many contexts – should not include CSM.

I must say, I was much attracted by this robust and common sense approach. However, the department’s official guideline (242/3) takes the view that CSM is to be excluded on the grounds that, if the regulation was intended to include a reference to CSM, it would expressly state “child support maintenance”. They rely on section 3(6) of the Act which provides:

	“(6)	Periodical payments which are required to be paid in accordance with a maintenance assessment are referred to in this Act as “child support maintenance”.”

This also formed a ground put forward by the Secretary of State in paras. 29 - 30 of his submissions to me (269). This line of argument was, however, rejected by the chairman in the last paragraph of his reasons, and I must say I am not, myself, much impressed by it. The definition is such that it relates to periodic payments which are required to be paid under a maintenance assessment only, and “maintenance” in reg. 11(2)(a)(i) can certainly embrace CSM among other matters.

In the back of my mind, there was, however, some nagging doubt, which is formulated in para. 24 of the Secretary of State's submissions to me (268). To begin with, I was inclined to dismiss it, since all we were concerned with, in this case, was, in effect, the protection of the AP’s protected income. But if CSM is to be included that will, in fact, result in an endless circle of reassessments, which reduces the situation to the absurd and thereby calls for the rejection of the argument put forward by the PWC and the chairman. This is probably best illustrated by the following example.

The situation envisaged is that contemplated by the Secretary of State in para. 24 of his submission, a situation which can very possibly arise. In this situation, it is contemplated that one child stays with the father as a member of his family, and one with the mother as a member of her family. Both parents are AP’s for this purpose and separate assessments can be made for both in accordance with regulation 19.

Father AP
	N is £150

	CSM is prima facie receivable £70

	Total family income £220 – disposable income (including in this example, of course, the CSM).

	Protected income £200

	CSM prima facie payable £50 

	This would reduce disposable income to £170 – CSM payable is therefore reduced to £30 (£200-£170).

That reduction will be reflected in the mother A.P.’s disposable income, which, if the protected income level in her case is breached, will in its turn require recalculation, and that recalculation will have a return effect on the father AP’s disposable income. One thus goes round in circles with an endless series of recalculations. The result is thus a nonsense.

It seems to me that this situation can only arise when the protected income level is breached but that is the whole point of “disposable income” and “protected income”. The absurdity of an endless circle of reassessments will be avoided if CSM is excluded from “maintenance” in reg. 11(2)(a)(i). Excluded, therefore, it must be. However, it does seem to me that drafting which requires such an esoteric line of reasoning, is somehow much less than perfect.

Finally, before leaving this issue, there may be something - though it should not be overlaboured – in thinking that as para. 2(a)(ii), as it does, excludes CSM, for deduction, so should sub-para. (i) for addition – at least contemplation. 

I have therefore come to the conclusion that the tribunal were in error of law on this aspect of the matter and, in the calculation of maintenance for the purposes of regulation 11(2)(a)(i) MASC Regs., CSM is to be ignored.

8.	I now turn to the other issues involved.

	(i)	I do not understand why the AP states that he understood that the tribunal would reach their decision on the documentation before them in the appeal papers prepared by the CSA, all such evidence being provided to all parties prior to the hearing. On 8 July 1997, the tribunal then seised of the matter had indicated that the appeal was not suited for a paper hearing, and the hearing then was but a decision to adjourn. That remark therefore remained relevant throughout the appeal. The tribunal were perfectly entitled to admit the oral evidence of the PWC, about which the chairman said:

			“[The AP’s partner] has a net income of £15 per week.”

		The tribunal gave their reasons:

			“1.	The tribunal was satisfied by [the PWC’s] evidence that [the AP’s partner] had an income of at least £15 p. week.”

		The evidence of the PWC was recorded as follows:

			“In November 1995 [the partner] was cleaning for [Mrs. W]. I know because the children had come back to me at about 9 am because [the partner] had to go out to work. I know she earned £5 per hour (remarkably good for 9 to 5) but I don’t know how many hours she worked.”

		The AP has not produced any evidence of his partner’s earnings. At page 3 the CSO said: “I submit that [the AP’s] partner was treated as having no income as [the AP] had made a written statement, see page I2, which stated his partner received no income. The child support officer had no reason to doubt the validity of the statement supplied by [the AP].”

		“Page I2” can be found in the bundle at page 179 and does not, in fact, address the income of the partner: the question there asked concerned the partner’s employment to which the answer given was “N/A”. – It was not directly concerned with any earnings.

		I see no reason to interfere with the tribunal’s decision on this point. The claimant knew that this was an issue and knew there would be an oral hearing. He failed to attend or adduce any other evidence. The tribunal reached their decision as best that they could, and I see no reason to suppose that they should have exercised their discretion and then adjourned to seek further evidence. They formed their conclusion on the available evidence.

	(ii)	It seems to me that the tribunal was not in error in making an estimate of the proportion of expenses attributable to private use. They did not accept the PWC’s evidence without question and I accept the submissions of the Secretary of State in paras. 13 to 15 of his submissions to me (267).

	(iii)	Again, I accept the submissions of the Secretary of State in paras. 16 to 18. It seems to me that the evidence is not sufficient to conclude that the dining room ceased to be residential occupation.

Date: 6 April 2001						(signed) Mr. J. M. Henty
Commissioner