Before:  Upper Tribunal Judge PA Gray 

DECISION OF THE UPPER TRIBUNAL
(ADMINISTRATIVE APPEALS CHAMBER)

Decision 

This appeal by the appellant father succeeds. In accordance with the provisions of section 12(2)(b)(i) of the Tribunals, Courts and Enforcement Act 2007 and rule 40(3) of the Tribunals Procedure (Upper Tribunal) Rules 2008 I set aside the decision of the First-tier Tribunal sitting at Middlesbrough and made on 8 April 2013 under reference SC227/13/00319. I refer the matter to a differently constituted panel in the Social Entitlement Chamber of the First-tier Tribunal for a fresh hearing and decision in accordance with the directions given below. 

Reasons for my decision.

I will set out initially the background to the appeal procedurally and legally, then I will explain the main legal issue upon which I am remitting the appeal to de re-decided, and a subsidiary point.  Finally I will give directions for the further conduct of the appeal, and some guidance to the new FTT that will hear it.

Procedural History

1.	The case concerns child support maintenance for Robbie, the son of the appellant father, who is the absent parent in terms of the child support legislation that governs this case, and the second respondent, who is Robbie’s mother and parent with care.  I will refer to the parents as the mother and the father in this decision.  

2.	The respondent is the Secretary of State for Work and Pensions, who inherited the functions of the Commissioner for Child Support Maintenance (the successor to the Child Support Agency) on the abolition of that office by way of a transfer of functions order effective from 1 August 2012.  I will refer to the body which from time to time has been responsible for child support maintenance as the agency.

3.	Robbie is now 13, having been born on 14 September 2000.  His father is liable to pay child support maintenance for him, and he has been doing so regularly over some years.  Robbie has an older sister who obtained work aged when about 18. This change in the family circumstances prompted a supersession and the agency contacted both parents and asked for full details of their current circumstances. The enquiry was to see what, if any, other relevant changes in the parents’ lives had occurred so that the maintenance assessment might be appropriately modified and updated.

4.	The father completed the enquiry form. He is a public servant, and has for some years been subject to no, or to a minimal pay increase.   He anticipated that his liability would decrease following his daughter being no longer a qualifying child for the purposes of the calculation, there having been little change in his personal circumstances.  

5.	There was a considerable delay in the agency making their calculations. They did so initially on 8 October 2012, in a decision that decided the father was liable to pay weekly child support maintenance of £111.39. That was from an effective date of 17 May 2012.  That decision was later revised, on 15 November 2012, the agency having become aware of an error.  The revised decision was that the father’s liability was £107 .75 per week from the same effective date.

6.	It had been to the father’s surprise that, even with the reduction in the decision as revised, his liability had significantly increased from what he had previously been paying in respect of both children.  He appealed.  The tenor of his appeal was really his bewilderment, and his feeling that the sum of £107 per week was disproportionate for one child when he had others who lived with him to care for, and he could not afford to do so at that rate.  He simply could not understand the reason for the increase.  He focussed in his appeal upon the fact that he was being assessed under the original “old rules” scheme.  He had as a matter of prudence tried to organise his affairs over the years to eliminate the need for a mortgage.  He was not able to do this with ease, but borrowed and saved in order to do so.  His new wife contributed.  He was disappointed to find that it may have been to do with the decrease in his housing costs that his liability had increased so substantially.  He was upset because the increased maintenance liability affected both his immediate family living with him at home, his wife and her 2 sons, and also his ability to contribute in other ways to Robbie’s welfare, and to entertain him on his contact stays.  He was also aware that the newer scheme provided for more generous discounts for shared care, the possibility for an allowance starting at 52 nights each year in contrast to the provision under the old rules where a discount was only possible for staying contact in excess of 104 nights each year.   Bearing these factors in mind his focus on the possibility of a change form the old to the new rules in his appeal was understandable.

7.	The First Tier Tribunal (FTT), however, had no power to change the basis of the calculation as the father wished.  Neither could they do anything about his complaint as to the build up of arrears due to the combination of the increase and the delay in the fresh assessment.  He had always paid on time; this position was, he felt, not of his making and it worried him.

8.	The father’s appeal was dismissed.  The tribunal rightly decided that they could do nothing in respect of his main arguments.  The decision did not indicate that other issues had been considered.

9.	The father appealed further.

The application for permission to appeal.

10.	The initial application for permission to appeal was made to the FTT.  It was refused by the District Tribunal Judge.  The father renewed the application to a Judge of the Upper Tribunal. The application for permission to appeal was listed for an oral hearing by Judge Williams, who wanted to give the father an opportunity to explain how he was saying that the tribunal had gone wrong.  At that stage Judge Williams could not see an obvious error of law.  He directed that the Secretary of State should attend the oral hearing.  Later that direction was amended to allow the Secretary of State to put in a written submission rather than attend. The submission of the Secretary of State supported the appeal. I will deal with why below.  The mother declined to attend the oral hearing, so I heard only from the father.

The issue at the oral hearing before me 

11.	The issue raised in the submission of the Secretary of State was that, the father having raised an issue at the FTT hearing concerning the legitimacy of the mother's housing costs being allowable within the formula, whether the tribunal arguably should have investigated the matter to see if they, or a proportion of them, were properly allowed within the child support scheme. The Secretary of State concluded that the tribunal in its inquisitorial jurisdiction should have done so.  He supported the appeal and recommended that the matter be remitted to a further tribunal so that proper findings on the issue can be made.    I granted permission to appeal.  No further submissions have been made, and I agree with the Secretary of state that the appeal should be allowed.

12.	 It appears at first sight that the father only raised the issue of her mortgage at the FTT hearing.  On further reading, however, I discovered that this was not the first time that the matter had been raised by the father; there was mention of the issue in the response of the agency at the FTT stage, it having been raised by the father with the agency.  There is a note from a child support officer who says that the father queried the mothers housing costs, this appears at page 23 of the response.  The child support officer says that she checked and verified the documentation.  The documents were neither described nor exhibited, however, and the calculation was not explained. The father’s concern that the mother’s housing costs comprised or were considerably increased by her extending an already suitable property, was not dealt with.   The issue was therefore one which, to the knowledge of the agency and the tribunal had troubled the father, although it was not specifically mentioned in the father’s grounds of appeal against the decision of the agency. Perhaps the father at that stage had accepted the agency’s assurance that the housing costs were correct.

13.	 The tribunal has a discretion whether to consider a matter not raised by the appeal.  This is provided for in section 20(7)(a) Social Security Act 1991, which reads 

“(7) In deciding an appeal under this section, the First-Tier Tribunal
(a) need not consider any issue that is not raised by the appeal;…”

14.	The Upper Tribunal will not interfere with a decision which is within the discretion of a tribunal where the discretion has been properly exercised upon reasonable grounds, which is to say that the tribunal considered the matters that it should have done in the context of the exercise of the discretion, and did not consider irrelevant matters.  Here the tribunal did not explain the exercise of its discretion in relation to this issue at all.  The father’s complaint about the mother’s housing costs was put clearly before it.  It was not wholly new, despite being absent from the grounds of appeal.  The decision under appeal was a concerted attempt by the agency to bring matters up to date following a considerable period where this had not been done.  The old rules calculations are notoriously complex and mistakes can be made.  Housing costs can impact heavily on the formula calculation because they form part of the exempt income, and here there was sufficient assessable income from the mother to give potential for those costs to have more than a marginal effect.  The combination of these factors made it incumbent on the tribunal, if they were not going to investigate the issue as not raised by the appeal, to explain clearly why not.

15.	It was also said in the decision notice that the tribunal confirmed the calculations of the agency. This positive statement required justification where there was dispute as to those calculations, and here the father had raised such a dispute.  The tribunal needed to go into the issue of the eligibility of the mothers housing costs in order to explain that finding.

16.	 It may be said that the mother, who did not attend the FTT, would have been disadvantaged by the matter being dealt with without warning, and I would agree, but had the FTT decided to look at the father’s concerns the proper course was to adjourn with directions to the mother, the agency or both, to produce documentary evidence of her mortgage commitments.  The mother should also have been directed to attend on the next occasion to assist the tribunal and put her case as to the inclusion of the amounts allowed, and warned that if she did not provide the evidence then the tribunal would make decisions based upon what evidence was available to it.

17.	The Secretary of State submits that the decision should be remitted for a rehearing with findings upon this disputed issue, and I agree.    On the other matters the Secretary of State is of the view that they were correctly dealt with by the tribunal. The other points that he makes were as to matters on which the tribunal's hands were tied because of the constraints of the legislation. Those were the father's arguments that he should have been migrated from the old scheme to the new, and that a different view should have been taken as to the matter of arrears.  These were not matters of discretion before the tribunal, and I cannot remit on that basis. The father needs to appreciate that his expectations in those matters cannot be fulfilled by the next tribunal.

18.	There is, though, a further possible error in the calculations as set out in the response to the FTT.  It has not been raised before in these proceedings.  It relates once more to the calculation of the exempt income.  The father’s exempt income will always be low, because he has no allowable housing costs. He tells me, however, that he has the day-to-day care of at least one minor child, as he lives with his wife and her two children.  The older child is now at university, and I do not know his age at the relevant effective date. The younger child is currently 16.  The issue is whether either child will attract a family premium within the exempt income provisions under regulation 9 Child Support MASC Regulations 1992.  I am aware that family premiums were abolished in income support as long ago as 2004, and were replaced by Child Tax Credits.  There are Transitional Provisions, however, and the agency is aware of the circumstances of both the mother and the father and must decide whether or not they apply.     The mother’s exempt income does include a family premium. It needs to be clarified whether or not either parent is entitled to a family premium within the exempt income. These details must be clarified by the Secretary of State prior to the rehearing. 

Guidance for the re-hearing 

19.	The crux of the housing costs issue is well set out in the Secretary of State's submission to the Upper Tribunal, dated 13 September 2013.  The relevant provisions are in schedule 3 to the Child Support (Maintenance Assessment and Special Cases) Regulations 1992.  Paragraph 1 (d) sets out the essential eligibility criteria, and Paragraph 2 defines "repairs and improvements" as major repairs necessary to maintain the fabric of the home in any of the following measures undertaken with a view to improving its fitness for occupation. There follows a list of specific matters which, if undertaken with that view, would be eligible.   Paragraph 4 confirms that the term "repairs and improvements" has the meaning given in paragraph 2 which I have alluded to above.  The case of Pabari –v-SSWP(Court of Appeal) [2005] 1 All ER 287 should also be considered. 
20.	The District Tribunal Judge may wish to make directions as to the mother producing evidence concerning her housing costs, together with the other matters that I deal with in paragraph 15 above.  The mother is now aware, however, that the amount of her housing costs is in issue.  

21.	It will be for the tribunal to make as detailed findings as they are able as to the circumstances in which the mothers housing costs arose, so that they can establish whether or not they satisfy the legal tests for inclusion which are set out above.  

22.	The period under consideration for all evidential issues is the effective date, 17 May 2012 until the date of the original supersession decision, 8 October 2012. That decision was revised by a decision made on the Secretary of State's own initiative on 12 November 2012 on the grounds of official error. The date of decision for the purposes of the terminal date rule in section 20 (7) (b) Child Support Act 1991 is, however, the date of the original supersession, the revision decision effectively replacing it (section 16 (3) Child Support Act 1991).

23.	 The fact that the appeal has succeeded at this stage is not to be taken as any indication as to what the tribunal might decide in due course. I make the following directions to explain what will happen next.

Directions

1.	The Secretary of State will file a supplemental submission to the FTT, within 28 days of the issue of this decision, exhibiting all notes and documentation that he holds in relation to the mothers claimed housing costs.  It should also deal with the applicability of the family premium in relation to the exempt income of both the mother and the father.
2.	The file should be put before a District Tribunal Judge for further directions and listing instructions, and they are subject to any further directions that may be made.
3.	The clerk to the First-tier tribunal should send to the presiding Judge of the original panel a copy of the submissions from the Secretary of State dated 13 September 2013 at pages 66-74 together with this decision and the case of Parbari, attached, and ensure that the same documents are placed in the tribunal bundle for the benefit of the panel that will hear the case.

PA Gray                                                                      (signed on the original)
Judge of the Upper Tribunal   

13th November 2013