BB v Secretary of State for Work and Pensions and CB (CSM)
| Jurisdiction | UK Non-devolved |
| Judge | Judge Wikeley |
| Neutral Citation | [2019] UKUT 314 (AAC) |
| Court | Upper Tribunal (Administrative Appeals Chamber) |
| Subject Matter | Child support,Child support - calculation of income,Child support - variation/departure directions: other,Wikeley,N |
| Date | 15 October 2019 |
| Published date | 14 November 2019 |
BB v SSWP and CB (CSM) [2019] UKUT 314 (AAC)
1
DECISION OF THE UPPER TRIBUNAL
(ADMINISTRATIVE APPEALS CHAMBER)
The DECISION of the Upper Tribunal is to allow the appeal by the Appellant.
The decision of the London Fox Court First-tier Tribunal dated 19 January 2018
under file reference SC242/16/07714 involves an error on a point of law. The First-
tier Tribunal’s decision is set aside.
The Upper Tribunal is able to re-make the decision under appeal. The decision that
the First-tier Tribunal should have made is as follows:
“The parent with care’s appeal is dismissed.
The Secretary of State’s decision of 28 July 2016, revising the decision of 27
June 2016, is confirmed.
The father is liable to pay £0.00 per week as from 2 July 2016 in statutory
child support maintenance for the three qualifying children.”
This decision is given under section 12(2)(a) and 12(2)(b)(ii) of the Tribunals, Courts
and Enforcement Act 2007.
REASONS FOR DECISION
Summary
1. This appeal concerns what should be, on the face of it, a straightforward
question – is a redundancy payment treated as part of a non-resident parent’s
current income for the purpose of assessing his child support liability?
2. The question may be straightforward but the length of this decision shows that
the answer is anything but.
3. In summary, my decision is that while the taxable component of a redundancy
payment counts as historic income for the purposes of the latest (and third) child
support scheme, it does not count as current income.
4. The result is in several ways deeply unattractive. One arm of the State – Her
Majesty’s Revenue and Customs – treats redundancy payments in the hands of an
employee as subject to income tax (and subject to an exemption for the first £30,000
of any such payment). At the same time another arm of the State – the Child
Maintenance Service treats redundancy payments as historic income but not as
current income. The consequence in this case – where a very substantial
redundancy payment is made to the non-resident parent, after many years of
handsomely-remunerated employment, followed by a period of nearly a year’s
unemployment – is that the father escapes any child support liability. I find it hard to
credit that this outcome represents the Secretary of State’s policy intention. However,
the statutory drafting leads me inexorably to the conclusion outlined above.
Abbreviations
5. The following abbreviations are used in this decision:
BB v SSWP and CB (CSM) [2019] UKUT 314 (AAC)
2
CMS Child Maintenance Service
CSMCR 2012 Child Support and Maintenance Calculation Regulations 2012
(SI 2012/2677)
FQPM Financially Qualified Panel Member
HMRC Her Majesty’s Revenue and Customs
ITEPA Income Tax (Earnings and Pensions) Act 2003
ITTOIA Income Tax (Trading and Other Income) Act 2005
PAYE Pay As You Earn
Annexes
6. This decision involves extensive reference to both child support and tax
legislation. For convenience all the relevant statutory materials (and an allied HMRC
Practice Note) are set out in annexes to this decision. The text of the legislation is
included as it stood on the date of the Secretary of State’s decision under appeal,
being 27 June 2016 (but as revised on 28 July 2016).
Annex 1 ITTOIA (sections 76-79)
Annex 2 ITEPA (sections 6-10, 14-15, 62, 309 and 401-404)
Annex 3 HMRC Practice Statement 1 (1994)
Annex 4 CSMCR 2012 (regulations 4 and 34-39)
The parties
7. The Appellant is, in the language of the Child Support Act 1991, the “non-
resident parent”, being the father of the “qualifying children”. The Second
Respondent is their mother and the “parent with care”. The couple went through an
acrimonious divorce. The First Respondent is the Secretary of State for Work and
Pensions, who makes decisions on child support liabilities through the CMS. This is a
“third scheme” case, i.e. one based on the child maintenance regime established by
the Child Support Act 1991 and as amended by the Child Maintenance and Other
Payments Act 2008.
8. None of the parties has actively sought an oral hearing of this appeal. I am
satisfied that the case can be properly determined without such a hearing.
The background to this appeal
9. What follows is necessarily only a summary of the complex and contested
factual background to the case, but sufficient to understand the context of the legal
issues that arise in this appeal. The parents married in 2002 and have three children,
now aged 15, 13 and 12. The father was employed in a (well-paid) senior role by a
City merchant bank. The parents separated in 2012. The Central Family Court made
a financial remedy order on 10 June 2014, which included provision for the father to
pay spousal maintenance of £1,755 a month and child maintenance of £1,500
monthly (£500 for each child).
10. T he father’s gross salary in the 2015/16 tax year was £187,771. However, on 8
March 2016 his employers notified him that he was being made redundant; he was
then sent on “gardening leave” for three months. On 10 June 2016 he applied to the
CMS for a child support assessment. On 27 June 2016 the CMS calculated his child
support liability as £413.13 a week with effect from 2 July 2016, based on his historic
gross income for the 2015/16 tax year, as provided through the HMRC computer
interface. This assessment was equivalent to £1,795.15 a month in child support,
approximately £300 a month more than the court-ordered level of child maintenance.
11. The father then asked for a reconsideration of the decision of 27 June 2016,
advising the CMS that he made been made redundant on 20 June 2016. His gross
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2 cases
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DT v Secretary of State for Work and Pensions (CSM)
...the redundancy payment fell to be taken into account as income in the light of BB v Secretary of State for Work and Pensions (CSM) [2019] UKUT 314 (AAC) and explaining the apparent use of current earned income alongside historic unearned income It also directed that the panel on the resumed......
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MC v Secretary of State for Work and Pensions and TM (CSM)
...FLR 1413 at paragraph [22] and also at [2017] EWFC 52; [2017] 2 FLR 1423 at paragraphs [23]-[25], discussed in BB v SSWP and CB (CSM) [2019] UKUT 314 (AAC) at paragraphs 62-64). CCS/1139/2019 7 MC v SSWP and TM (CSM) [2020] UKUT 157 (AAC) 36. However, a new type of variation for assets exce......