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[2008] UKUT 19 (AAC) (20 November 2008)

 


IN THE UPPER TRIBUNAL Appeal No. CCS/1192/2008

ADMINISTRATIVE APPEALS CHAMBER [2008] UKUT 19 (AAC)

Before Upper Tribunal Judge E A L Bano

Decision: My decision is that the decision of the tribunal involved the making of an error on a point of law. I set aside the tribunal's decision and without making any further findings of fact I re-make the tribunal's decision by upholding the decision of the Secretary of State notified on 18 July 2007 that the non-resident parent was liable to pay child support maintenance of £47.00 per week in respect of the relevant child from the effective date of 19 June 2007.

REASONS FOR DECISION

1. This is an appeal by the Secretary of State, brought with the leave of the chairman, against the decision of the tribunal allowing the appeal by the father and non-resident parent of the relevant child against a maintenance assessment of £47.00 per week effective from 19 June 2007. The sole issue in the appeal is whether child tax credit should be included in the non-resident parent's income for the purpose of calculating his maintenance liability.
2. The non-resident parent lives with his partner and her daughter. Following an application for a maintenance calculation made on 14 June 2007 by the parent with care, the non-resident parent disclosed that, in addition to earned income and working tax credit, child tax credit amounting to £449.85 every 4 weeks was payable to the non-resident parent's partner in respect of her daughter. That amount included a disability premium, and the non-resident parent contended that in those circumstances it should not be included in his assessable income for the purposes of calculating his maintenance liability. That contention was rejected by the decision maker but upheld by the tribunal on appeal.
3. By paragraph 10(1) of Schedule 1 to the Child Support Act 1991, "net weekly income is to be determined in such manner as is provided for in regulations", and by paragraph 1 of the Schedule to the Maintenance Calculations and Special Cases Regulations 2000 ("the 2000 MCSC Regulations"), which are the regulations applicable to this case, "net weekly income means the aggregate of the net weekly income of the non-resident parent provided for in this Schedule." Part IV of the Schedule makes provision for tax credits, and paragraphs 11 and 12, dealing with working tax credit and employment credits respectively, provide that in the specified circumstances payments of those credits "shall be treated as the income of the non-resident parent". However, paragraph 13A, which deals with child tax credit, omits those words and simply provides:

"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."

4. The omission of the words "shall be treated as the income of the non-resident parent" in paragraph 13A led the tribunal to conclude that child tax credit should not be taken into account in calculating the non-resident parent's income, for the following reasons:

"In this particular case significant additional income into the household at the rate of more than £5000.00 per annum payable in respect of the appellant's step child, who suffers from significant disabilities, has been taken into account in circumstances where the statutory provisions are at least ambiguous.

It appears that there is wording missing from this provision but the Tribunal is not empowered to substitute wording which it may conjecture as being omitted. Briefly put the issue is whether the laconic reference to Child Tax Credits is sufficiently explicit as currently worded to require the Decision Maker to invariably treat income so derived as income of the non-resident parent. In those circumstances the appeal is allowed and leave to appeal to the Commissioner will be granted, should leave be sought."

5. In CCS/2040/2005 Mr Commissioner Angus held that child tax credit was to be taken into account as income of the non-resident parent in a case governed by the 2000 MCSC regulations, and in CCS/3018/2006 the same Commissioner assumed that, while paragraph 13A of the Schedule read by itself was meaningless, in its context it meant that payments of tax credit made to the non-resident parent were to be treated as that parent's income. The Secretary of State's representative has submitted that the words "shall be treated as income of the non-resident parent" are found in paragraphs 11 and 12 of Schedule 1 to the 2000 MCSC Regulations because under those paragraphs it is only if certain conditions are satisfied that the tax credit is treated as income of the non-resident parent. However, in relation to child tax credit, paragraph 2(2) of Schedule 1 to the Child Support Act 1991 makes provision for other relevant children of the non-resident parent to be taken into account by reducing the basic rate of the parent's weekly income. Since the rules of entitlement to child tax credit may give rise to uncertainty as to whether entitlement to the credit is that of the non-resident parent or the non-resident parent's partner, paragraph 13A of the Schedule to the 2000 MCSC regulations is intended to make it clear that child tax credit paid in respect of such a child is to be taken into account as the non-resident parent's income whether payment of the tax credit is made to the non-resident parent, or to the non-resident parent's partner. Any other construction, submits the Secretary of State, would render the provision meaningless.
6. Mr Pape, of Child Support Solutions, who also represented the non-resident parent before the tribunal, has submitted that the word "shall" is used in every case in the Schedule to the MCSC Regulations where income is to be taken into account as that of the non-resident parent. Mr Pape contends that there is no difficulty in deciding who is entitled to child tax credit, and that it cannot have been Parliament's intention that a non-resident parent who lives with the parent of a disabled child should have an increased liability to child support maintenance. Mr Pape submits that I should not follow CCS/2040/2005 and CCS/3018/2006 because the issue in this appeal was not fully argued before the Commissioner (as indeed seems to have been the case), and asserts that as drafted paragraph 13A of the Schedule to the 2000 MCSC Regulations is devoid of any effect.
7. I do not accept that the words "shall be treated as the income of the non-resident parent" have been accidentally omitted from paragraph 13A. Since paragraph 1 of the Schedule to the 2000 MCSC Regulations provides that the net weekly income of the non-resident parent is the aggregate of the net weekly income of that parent "provided for in this Schedule", it is only necessary for the following paragraphs in the Schedule to specify the relevant type of income for that income to be taken into account. The words "shall be treated as the income of the non-resident parent" are therefore unnecessary where the whole of such income is to be treated as that of the non-resident parent, and I agree with the Secretary of State that they appear in paragraphs 11 and 12 of the Schedule because the tax credits covered by those paragraphs are only treated as income of the non-resident parent in certain circumstances. Similarly, the word "shall" appears in the paragraphs referred to by Mr Pape in those cases where the relevant income is treated as the non-resident parent's income only in certain cases. By paragraph 10B of Schedule 1 to the Child Support Act 1991, the Secretary of State has power to provide for a person to be treated as possessing income which he does not possess, and in my judgment paragraph 13A of the Schedule to the 2000 MCSC regulations, when read with paragraph 1, makes it clear that all payments of child tax credit are treated as the income of the non-resident parent at the rate in payment at the effective date, irrespective of whether it is paid to the non-resident parent, or to the non-resident parent's partner
8. I have therefore reached the same conclusion as the Commissioner in CCS/2040/2005 and CCS/3018/2006, but even if I had upheld Mr Pape's submission that the words "shall be treated as the income of the non-resident parent" had been accidentally omitted from paragraph 13A, I would still not have upheld the tribunal's decision. It is well established that words can be implied into legislation if not to do so would deprive the provision of all meaning-see, for example, Adler v George [1964] 2 Q.B. 7. However, for the reasons I have given, I do not consider it necessary to have recourse to that principle here.
9. For those reasons, I uphold the Secretary of State's maintenance assessment and give the decision set out above.

E A L Bano

Judge of the Upper Tribunal

20 November 2008