The current 2012 scheme for child support differs from the previous schemes in that it uses the gross (before tax) income of the non-resident parent (NRP), usually obtained from HM Revenue and Customs (HMRC), rather than their net income. However, as we shall see, there can be a problem with this, as the gross income figure can be out of date.
This problem was highlighted in the case IW v Secretary of State for Work and Pensions and DW (CSM) (Child support : calculation of income). In this case the parent with care, the mother, appealed to the First-Tier Tribunal (FTT) against a decision made by the agency then responsible for calculating child support maintenance. That decision was that the father was liable to pay £128.98 per week, for the three qualifying children from 6 September 2013.
The decision had been based upon the father’s gross income for the tax year 2011/12. However, the mother obtained (we are not told how) details of the father’s gross income for the following year, 2012/13, which was higher than the previous year, and provided these to the FTT. The FTT allowed the appeal and directed the agency to make a fresh calculation, based upon the 2012/13 figure.
The father appealed to the Upper Tribunal.
Before going any further I should just explain in a little more detail how the NRP’s gross income figure is calculated. As mentioned above, it is usually obtained from HMRC. The figure provided by HMRC will be for the past tax year, which may have ended some months prior to the child support calculation. For this reason, the figure is known as ‘historic income’. The NRP’s income may obviously have changed since the last tax year, and therefore the calculation can be based upon the NRP’s current income provided that the current income is at least 25 per cent different (i.e. more or less) from the amount provided by HMRC for the past year.
Back to the case. The Upper Tribunal had to decide two issues: firstly, whether the FTT was in fact entitled to use information that came to it from the mother and not directly from HMRC, and secondly, even if the FTT had not been entitled to use that information, whether there was any disadvantage to the father, given that the information indicated that his current income was comfortably more than 25 per cent higher than his historic income.
The appeal was dealt with ‘on the papers’ (i.e. without a hearing) by Upper Tribunal Judge Gray. He held that if there had been an error of law on the part of the FTT it had been immaterial, as the FTT was entitled to consider the mother’s evidence of the father’s current income and, if reliable, use that as the basis of the calculation if it differed from the historic income supplied by HMRC by more than 25 per cent, which it did. Accordingly, any error of law by the FTT did not make a difference at the end of the day. The decision of the FTT therefore stood, and the father’s appeal was dismissed.
As Judge Gray pointed out, HMRC should in any event have had the 2012/13 figure at the time they were requested to provide a figure, and only provided the 2011/12 figure by mistake. The FTT could have requested the correct figure from HMRC. However, the FTT clearly appeared to accept that the details provided by the mother were reliable. Unfortunately, the report does not tell us what form those details took.
An interesting look at some of the detailed workings of the 2012 scheme.
The full report of the case can be found here.