SG v The Secretary of State for Work and Pensions & Anor

At all relevant times, SG was the non-resident parent to his child “H” and CD was the person with care of her. On around 30 January 2023, acting on behalf of the Secretary of State, the Child Maintenance Service (“CMS”) superseded (which means changed) SG’s child maintenance liability for H, to take account of a current income of £48,410.26 and to create a weekly child maintenance liability of £92.19. CMS decided the effective date for this decision was 04 March 2022. SG appealed this decision on the basis he had not worked since October 2022.

On 15 May 2023, CMS again superseded SG’s child maintenance liability for H. CMS decided that with effect from 07 December 2022, SG’s child maintenance liability was nil because he had stopped being employed. On 15 June 2023, HMCTS received SG’s appeal against this decision. SG appealed on the basis his job had ended on 03 October 2022, and CMS should have used that earlier effective date for him.

SG’s appeals were linked and dealt with the same First-tier Tribunal (“FTT”). The FTT held a video hearing of SG’s appeals on 08 April 2024. The FTT allowed both appeals and remitted the matters to CMS to make fresh child maintenance liability decisions on the following basis:

The FTT decided that SG worked as a contractor for relatively short periods of time and that during the period it was considering, SG made withdrawals from a self-invested personal pension (“SIPP”). The FTT decided that SG’s employment did not continue beyond 14 April 2022 and other employments after that date did not satisfy the criteria in regulation 38 of the Child Support Maintenance Calculation Regulations 2012 (“the CSMC regulations”) to count as current income of an employee.

The FTT also decided that SG’s pension withdrawals should count as current income for the purpose of his child maintenance liability, applying regulation 41 of the CSMC regulations. The FTT decided that as SG was charged to tax for those pension payments, they fell within regulation 41 and should be included as current income in the form of a weekly average over an appropriate period. The FTT applied SG’s pension payments received on 20 January 2022, 15 February 2022 and 11 March 2022 as part of his gross annual income of £61,478.26 (which also included income from his contractor work).

Applying regulation 41, the FTT decided that taking into account SG’s pension withdrawals of £10,000 on each of 13 June 2022 and 25 August 2022, these payments should be averaged as equivalent to an annual income of £80,000. The FTT decided this figure should apply within the calculation from 01 June 2022 but that from 01 September 2022, SG did not have any income.

The FTT decided it could make “stepped” assessments of SG’s liability during different periods of time, which reflected the different amounts of income he received during given periods. The FTT reflected these as annualised amounts of SG’s current income, on which his child maintenance liability should be based.

The FTT decided that the incomes set out at paragraph 3 above represented SG’s current income and that it was different from his historic income by more than 25%. The FTT therefore decided that under regulation 34(2)(a) of the CSMC regulations, SG’s child maintenance liability should be based on his current income.

The FTT provided a Statement of Reasons for its decisions on 03 July 2024. The FTT refused SG permission to appeal against those decisions on 31 July 2024.

On 08 August 2024 the Upper Tribunal received SG’s application for permission to appeal. I listed it for an oral hearing but also directed the Secretary of State to provide written submissions about the effective dates the FTT had used in its decisions. In addition, I directed the Secretary of State to listen to a recording of a telephone call SG said he had held with a CMS official on around 09 May 2023. SG provided us with a copy of that telephone call. SG believed the telephone call confirmed that CMS accepted that his pension payments should not be taken into account and the FTT should have done likewise.

The Upper Tribunal received representations on behalf of the Secretary of State dated 24 January 2025. In summary, these were that the Secretary of State considered the FTT had made errors of law in relation to a number of matters. The representations also explained the representative for the Secretary of State had not been able to listen to the telephone call that had been provided to them, but went on, in any event, to make submissions on the issue about what the CMS official was stated to have said during that call.

On 04 February 2025, having seen the representations made on behalf of the Secretary of State, I vacated the hearing of SG’s application (listed for 17 February 2025). I granted SG permission to appeal against the FTT’s decisions dated 08 April 2024 on the basis that it was arguable the FTT had made one or more errors of law in one or more of the ways set out below.

Using an effective date of 01 June 2022 for its decision that SG had £80,000 of current income to use in the child support calculation. It was arguable the FTT had made an error of law in choosing 01 June 2022 as the effective date for superseding (changing) SG’s child maintenance liability to move from a current income figure of £0 to a figure of £80,000.

SG had been assessed as having a nil (£0.00) rate of liability for child support. In those circumstances, he had a duty under regulation 9A(3) and (9) of the Child Support Information Regulations 2008 (“the CSI regulations”) and to report any change in his gross weekly income that meant it increased to £7 per week or more. Where a change occurred and was one SG had a duty to report under regulation 9A(3) and (9) of the CSI regulations, the effective date for the change would be set by regulation 18(4) of the CMSC regulations. This would fix the effective date to when the change occurred.

The evidence in the appeal bundles suggested that SG drew down the £10,000 sum from his pension on 13 June 2022, and not on an earlier date. It was therefore arguable that having decided regulation 18(4) of the CMSC regulations applied to SG, the FTT incorrectly used an effective date of 01 June 2022 rather than 13 June 2022 (when the change actually occurred).

Using the effective date of 01 September 2022 for its decision that SG had £0 current income. The FTT appeared to have again used regulation 18(4) of the CSMC regulations for the effective date of when SG’s current income ceased and decided this was 01 September 2022 was the relevant effective date. However, it was unclear that regulation 18(4) applied to the change in question. It was not clear that the change fell within regulation 9A of the CSI regulations. If regulation 18(4) did not apply, the FTT arguably should have used a different effective date for the supersession of SG’s child maintenance liability. Alternatively, the FTT might have failed to make adequate factual findings or provide adequate reasons to explain why it chose 01 September 2022 as the effective date of the change.

Ms Taylor represents the Secretary of State in this matter. She supports SG’s appeal and invites the Upper Tribunal to set aside the FTT’s decisions dated 08 April 2024 for containing material errors of law, for the reasons set out below.

Ms Taylor submits the FTT made a material error of law in using an effective date of 01 June 2022 for the change in SG’s current income increasing to £80,000. She submits that at the time SG drew down £10,000 from his SIPP on 13 June 2022, his child maintenance liability was £0.00 (or a nil rate) based on his current income. Ms Taylor cites regulation 9A(3) and (9) of the CSI regulations 2008. These, together with regulation 9(1) provide:

“9A(1) In a case falling within paragraphs (2) or (3), the Secretary of State may notify the non-resident parent that that parent is required to notify the Secretary of State of any relevant change of circumstances in relation to that income.

(3)

A case falls within this paragraph if, in relation to a maintenance calculation in force-

(a)

gross weekly income is determined by reference to the non-resident parent’s current income (in accordance with regulation 37 of the Maintenance Calculation Regulations); and

(b)

paragraph 5(b) of Schedule 1 to the [Child Support] Act applies (nil rate).

(9)

For the purposes of a case falling within paragraph (3), a relevant change of circumstances occurs where the non-resident parent’s income increases to a gross weekly income of £7 or more.”

Ms Taylor cites regulation 18(4) of the CSMC regulations, which provides:

“18(4) Where the ground for the supersession decision is that a relevant change of circumstances affecting the non-resident parent’s current income has occurred and the non-resident parent was required to report that change in accordance with regulations under section 14(1) of the 1991 [Child Support] Act, the decision takes effect from the date on which the change occurred.”

Ms Taylor submits SG had a duty to report the changes in his income when he drew down the £10,000 pension sum on 13 June 2022. At that time, SG’s child maintenance liability was based on his current income and was at the nil rate. He therefore satisfied regulation 9A(3) of the CSI Regulations. From 13 June 2022, SG’s gross weekly income increased to £7 per week or more. As a result, regulation 9A(1) meant SG had a duty to notify the Secretary of State about his change of circumstances.

Ms Taylor submits that this requirement on SG to report the changes in his income meant regulation 18(4) of the CSMC regulations applied to the supersession decision the FTT was making. Ms Taylor submits that applying regulation 18(4), the effective date of the supersession would be the date the change occurred, which was 13 June 2022.

Ms Taylor submits the FTT therefore made a material error of law in relation to appealSC322/23/00939 by using 01 June 2022 as the effective date for the supersession.

Ms Taylor submits the FTT made a further material error of law in using an effective date of 01 September 2022 to apply a nil income for SG’s appeal SC322/23/01311. Ms Taylor highlights that when refusing SG permission to appeal, the FTT appeared to have applied the effective date to take account of SG ceasing employment, in line with regulation 18(4) of the CSMC regulations.

Ms Taylor submits that while the FTT wrote that SG received no income from 01 September 2022 (paragraph 37 of Statement of Reasons), it was not clear how it arrived at that date. She highlights that the real time information obtained for SG’s employment at Addition G, page 4 of the FTT bundle indicates SG was receiving income from employment as late as 14 October 2022. Ms Taylor also highlights that SG has stated, as part of his application for permission to appeal that his employment ended on 03 October 2022.

Ms Taylor submits the FTT made a material error of law by applying regulation 18(4) of the CSMC regulations when considering the effective date of the supersession decision for SG’s employment ending. She submits that regulation 18(4) only applies if a change has occurred that the non-resident parent is required to report to the Secretary of State and the change for SG did not fall within regulation 9A(1) of the CSI regulations. This is because it did not fall within 9A(3) and it did not fall within any of the relevant changes of circumstances listed in regulation 9A(6) to trigger the reporting duty in regulation 9A(2). Ms Taylor submits that becoming unemployed does not fall within regulation 9A(6) and therefore regulation 18(4) did not apply to this change for SG.

Ms Taylor submits that regulation 18(6) of the CSMC regulations provides for situations where a supersession decision is made on either a party’s application, on the basis of third-party information supplied to the Secretary of State, or at the Secretary of State’s own initiative. Ms Taylor argues that given SG reported his change in circumstances to the Secretary of State on 07 December 2022 (when the CMS received his P45 document), the effective date of the change would be 07 December 2022 (applying regulation 18(6)(a) of the CSMC regulations).

In relation to the telephone call between SG and a CMS staff member on around 09 May 2023, Ms Taylor explains she has not been able to listen to this due to technical difficulties. Ms Taylor observes that at the FTT hearing, SG confirmed his pension withdrawals were subject to tax (paragraph 19 of the FTT’s Decision Notice dated 08 April 2024). Ms Taylor explains that the Secretary of State’s position is therefore that applying regulation 41 of the CSMC regulations, the pension withdrawal amount should be averaged as a weekly income and included in SG’s current income for the purposes of calculating his child maintenance liability.

Regulation 41 of the CSMC regulations provides:

“41.

The non-resident parent’s current income from a pension is to be calculated as the weekly average, over such period as the Secretary of State considers appropriate, of amounts received by the non-resident parent from a pension or annuity or other income (excluding UK social security pensions) of a kind that would be charged to tax under Part 9 of ITEPA.”

Ms Taylor explains the Secretary of State agrees with the FTT’s analysis explained at paragraphs 26 and 27 of its Statement of Reasons. Ms Taylor submits that the advice a CMS staff member gave SG in the telephone call on 09 May 2023 would have been correct if based on the assumption that the pension income in question was not taxable. Ms Taylor submits that SG’s pension scheme allowed for the first 25% of the value of his pension to be withdrawn in lump sums without becoming liable for tax (real time information at Addition G, page 4 of FTT appeal bundle).

Ms Taylor explains that this real time information shows that the pension lump sums SG was paid on 20 January 2022 and February 2022 were not subject to tax and therefore would not fall to be taken into account as current income in his child maintenance calculation. Ms Taylor contrasts this with the pension payments made to SG on 11 March 2022, 13 June and 25 August 2022, which were all subject to tax. She submits that these later payments fall to be taken into account as SG’s current income, applying regulation 41 of the CSMC regulations.

CD has not taken part in these appeals and has not made any written representations to the Upper Tribunal, despite being sent reminders about having the opportunity to make them.

I made directions on 16 June 2025 which highlighted that CD had not made submissions. My directions also addressed some matters SG had raised in an email dated 13 February 2025, including that he was asking the Upper Tribunal to cancel his child maintenance payments because CMS applied the law incorrectly, and to direct CMS to pay him money he should not have paid. Having explained why the Upper Tribunal would not, or could not, direct what SG was requested, I gave SG an additional month to make representations if he wanted. My directions were issued to the parties on 30 August 2025. I am sorry for the delay in the Upper Tribunal sending them out.

On 02 September 2025, the Upper Tribunal received submissions from SG. He asks the Upper Tribunal and, if required, the First-tier Tribunal, to listen to his call recording with CMG (Child Maintenance Group), and the person who states pension drawdowns are not included in CMG calculations for the paying parent. SG argues that this is definitive evidence for him and had CMG told him that pension drawdowns were included he would not have made them. But they (CMG) told SG they were not included, and this was confirmed by their Accuracy team.

SG writes that he then made pension draw downs and this subsequently changed everything. From December the CMG annual review said there was nothing to pay ongoing. SG then suddenly received letters the following January telling him he had to pay approximately £700 per month. SG describes complaining, and that in May of that year they cancelled the £700 per month child maintenance payment. SG argues that all these payments did not have to be made because of a CMG mistake and that the £700 per month payments were simply cancelled because of his complaint.

SG argues he has overpaid £3,000 as a result of CMG errors. SG asks the Upper Tribunal and First-tier Tribunal to look at this information and to direct CMG to re-calculate those 5 payments of £700 and to show they should not have been paid at all. He states he wants CMG to refund the money to him. SG writes that he has already asked for this refund, but CMG has told him it should be refunded by CD (which SG states will never happen)

SG argues the material error of law in this case is CMG not calculating his payments correctly after telling him that pension draw downs are not included in payment calculations. SG argues that CMG incorrectly included those draw downs and this is the error of law. He submits this can be established in listening to the phone call.

SG argues that he did not inform CMG about his job ending on 03 October 2022 because he had previously sent information about a short-term job ending and CMG said he did not need to let them to know about it because it was less than three months’ employment. SG states that as a result he let the CMG know about his job ending when it carried out the annual review on 07 December 2022. SG writes that the CMG then extended his job to December 2022 because he did not let them know. SG submits that the FTT did not mention this part of his tribunal case in the Statement of Reasons. SG argues that this means the FTT did not apply the law correctly (by not mentioning the entire question of his case).

SG has pasted a letter dated 09 September 2021 from the CMS into his email. That letter states that the CMS does not take into account short term changes and would only look to update its records if it is a permanent change in place for 12 weeks or more. The CMS letter explains how to update information if circumstances change on a permanent basis.

Finally, SG writes that eh would like an oral hearing to answer any questions in this complicated case. He states that if he is present, he can answer any single question or query regarding this big problem. SG states he would like this to be fair as it is very stressful for him as a very important part of his life. He mentions having restricted access to his children, which caused him distress and was made worse by incorrect payment charges.

The Secretary of State and CD did not ask for an oral hearing of these appeals. SG did, for the reasons I have set out above. I have taken his preference and explanation into account. As I explained to the parties in my directions made on 16 June 2025, my role is to decide whether the FTT made one or more material errors of law. Given both SG and the Secretary of State consider the FTT made material errors of law, it is not necessary for me to have an oral hearing in order to resolve this appeal. SG says he would like an oral hearing in case I have questions, but I do not have questions that need resolving before being able to decide whether the FTT made one or more material errors of law.

Listing a hearing before the Upper Tribunal would therefore simply add delay in deciding something I can already address on the papers. I therefore decided it was proportionate to determine the appeal on the papers.

This matter was not referred back to me correctly for decision and this has caused a delay. On behalf of the Upper Tribunal office, I apologise to the parties for this, and for the inconvenience it will have caused.

At the permission stage, I only needed to be persuaded that it was arguable with a realistic (as opposed to fanciful) prospect of success that the FTT had made an error of law in a way that was material.

At this substantive stage, I need to be satisfied on the balance of probabilities that the FTT did make an error or errors of law that were material.

I am satisfied on the balance of probabilities that the FTT made the following material errors of law in its decisions dated 08 April 2024.

Not explaining adequately why it took into account non-taxed pension payments for January 2022 and February 2022 in calculating SG’s current income: the FTT wrote at paragraph 33 of its Statement of Reasons that the fairest way of reaching an appropriate figure for SG’s current income in respect of 04 March 2022 was to extrapolate an annual figure from the monthly amount of £1,089 SG received in January, February and March 2022. Based on there being three payments in the three-month period, the FTT multiplied £1,089 by 12 to reach an annualised amount of £13,068 of gross current income for SG.

However, as Ms Taylor has pointed out, the real time information at Addition G, page 4 of the FTT bundles confirm the pension payments received on 20 January 2022 and on 15 February 2022 were not taxed. In those circumstances, the FTT needed to explain why it considered those payments should be included within its calculation in assessing what the annualised current income from SG’s pension would be. The FTT had recognised in paragraphs 29 to 30 of its Statement of Reasons that it needed to distinguish between pension payments that were charged to tax and those that were not.

While this was not a specific ground on which I gave SG permission to appeal, I did not limit my grant of permission. The Secretary of State’s submissions have highlighted that the FTT has not explained this part of its decisions. It is appropriate to deal with it here, to make clear the FTT will need to identify which of SG’s pension payments were charged to tax for the purpose of considering them under regulation 41 of the CSMC regulations.

I am therefore satisfied that the FTT made a material error of law by not explaining adequately why it took the January 2022 and February 2022 pension drawdown payments into account.

Applying the effective date of 01 June 2022 in appeal SC322/23/00939: As explained at paragraphs 18 to 22 above, this change fell within regulation 18(4) of the CSMC regulations. The FTT therefore should have used an effective date of 13 June 2022 for it, since this was the date when the pension payment was received. By using the earlier date of 01 June 2022, the FTT made a material error of law.

Failing to explain adequately its use of an effective date of 01 September 2022 in appeal SC322/23/01311: The FTT wrote at paragraph 37 of its Statement of Reasons that from 01 September 2022, SG did not have any income, and it was appropriate to make a supersession decision to reflect this, effective from that date. The FTT has not explained which provision in regulation 18 of the CSMC regulations it relied on for that date.

The FTT provided some additional reasoning for choosing 01 September 2022 as the effective date in paragraph 14 of its decision refusing SG permission to appeal. The FTT did not identify a specific legal provision it was relying on for that date. In any event, I cannot use the FTT’s decision refusing permission to appeal as a source of additional reasoning on this issue. See the Court of Appeal in paragraph 67 of Albion Water v Water Services Regulation Authority and others [2008] EWCA Civ 536.

Section 17(4) of the Child Support Act 1991 provides that the effective date of a supersession decision is the date it is made but allows alternative dates to be used if they are set out in regulations. Regulation 18 of the CSMC regulations provides for alternative dates to apply. It is, however, unclear which of them the FTT decided applied to SG. Regulation 18(4) of the CSMC regulations, which applies an effective date to the date a change occurs, would not apply to the change in circumstances the FTT decided took place on 01 September 2022. It is not clear that any of the effective dates in regulation 18(2), (3) or (5) applied to SG either. In those circumstances, the FTT would need to consider if any of the effective dates in regulation 18(6) applied to SG. If they did, it is unclear that any of them would result in using an effective date of 01 September 2022.

In any event, the FTT has failed to explain which legislative provision it used allowing it to pin the effective date of the change to 01 September 2022. It has therefore failed to provide adequate reasons for this part of its decision, and this is a material error of law.

SG has argued that the FTT made a material error of law by taking into account his pension drawdown payments that were charged to tax. I do not find that this was a material error of law by the FTT. Both the Secretary of State and the FTT had to apply regulation 41 of the CSMC regulations, in assessing what current income SG was receiving as part of his child maintenance liability. Regulation 41 provides:

“Current income from a pension

41.

The non-resident parent’s current income from a pension is to be calculated as the weekly average, over such period as the Secretary of State considers appropriate, of amounts received by the non-resident parent from a pension or annuity or other income (excluding UK social security pensions) of a kind that would be charged to tax under Part 9 of ITEPA.”

SG seeks to rely on what he was told in a telephone conversation on around 09 May 2023, after he had already drawn down the pension payments in 2022. What a CMS staff member has said in a telephone call cannot, however, override the relevant legislative provisions that applied to determine SG’s child maintenance liability. This includes regulation 41 of the CSMC regulations.

CMS, and the FTT, therefore needed to determine whether SG had received payments from an occupational pension during the relevant period of a kind that would be charged to tax under Part 9 of ITEPA. If he did receive those payments, they would fall to be considered as current income, and CMS / the FTT would need to calculate them as a weekly average over such period it considered appropriate.

I have decided the FTT’s decisions dated 08 April 2024 involved material errors of law. I have decided to use my discretion to set those decisions aside. I do so, using the legal power in section 12(2)(a) of the Tribunals, Courts and Enforcement Act 2007. Section 12 of the 2007 Act requires me either to remit (send back) the cases to the First-tier Tribunal to decide afresh, or to decide them myself.

These are appeals where further facts need to be found. The First-tier Tribunal is the primary tribunal of fact (meaning its role is to find facts in these types of appeals). SG can provide evidence to the FTT and make the arguments he wants to make, and the First-tier Tribunal will be able to evaluate them and reach conclusions about the substance of his appeals.

I therefore remit SG’s appeals to be reheard before a new First-tier Tribunal. It will make fresh decisions about what should be the correct amount of SG’s liability for child maintenance for H during the periods covered by the appeals.

Although I have set aside the FTT’s decisions dated 08 April 2024, I am not making any findings about the substance of SG’s appeals generally. The next First-tier Tribunal will need to hear evidence, make its own findings of fact, and provide its reasoning for the decisions it reaches.