MB v Secretary of State for Work and Pensions & Anor (CSM)

This case is remitted to the First-tier Tribunal for reconsideration.   

The parties shall send to the HMCTS ASC Bradford office any further relevant evidence as soon as possible, if there is any. If they cannot send that evidence within 4 weeks of the issue of this decision the parties will need to contact that office to let them know that further evidence is expected.    

The evidence that is relevant will be about the nature or purpose of the home insurance policy to whose costs the Second Respondent contributes, under the Court Order of 7 February 2022.

These Directions may be supplemented by later directions by a Tribunal Judge in the Social Entitlement Chamber of the First-tier Tribunal.  

This is an appeal against a decision of the First-tier Tribunal (“F-tT”) which on 23 August 2023 heard an appeal against the award of child maintenance payable by the Second Respondent to the Appellant. The procedural history of the award of child maintenance made was complex (see paragraphs 4 – 15 of the F-tT Statement of Reasons). But the decision under appeal was the decision made on 10 August 2022 by the First Respondent that a “special expenses” variation of £10,296 per annum should be made to the child maintenance award, with effect from 18 May 2022. The payments that were found to be “special expenses” were sums contributing to the mortgage payments due on the former family home, and also in relation to the insurance costs of that home. These sums had been paid by the Second Respondent to the Appellant under the terms of a Family Court Order made on 7 February 2022. Subsequently, the First Respondent backdated the inclusion of the special expenses variation to 7 February 2022, i.e., to the date of that Order.

The Appellant, who is the resident parent, appealed to the F-tT against these deductions. The District Tribunal Judge allowed the appeal to the extent that he held that the proper deduction for special expenses was £8,976, not £10,296, per annum. The larger sum included some deductions which were not permissible special expenses. The deductions should be limited to £723/month for the mortgage and £25/month for the insurance. However, he confirmed the Respondents’ case that these deductions were permissible under Regulation 65 of the Child Support Maintenance Calculation Regulations 2012 (“the 2012 Regulations”).

After permission to appeal was refused by the First-tier Tribunal in March 2024, the Appellant then appealed to the Upper Tribunal. An oral hearing was held before the Upper Tribunal Judge E. Fitzpatrick on 26 November 2024. The hearing was attended by Counsel instructed by the First Respondent (the Secretary of State for Work and Pensions or “SSWP”) and by the Second Respondent. The Upper Tribunal Judge extended time for the appeal to be brought. She granted permission to appeal, but on limited grounds only, stating that:

“In particular, it may be arguable the FTT erred in concluding that the home insurance payments of £25 per month paid by the Second Respondent to the Appellant fell within reg. 65 and should properly have found that the payments were excluded by reg. 65(3)(i) and that the FTT failed to make sufficient findings of fact in relation to this issue. I give limited permission to appeal on this ground only.”

As a result, the only issue in this appeal is whether the home insurance payments of £25 per month paid by the Second Respondent to the Appellant were properly deductible. The remaining aspects of the F-tT decision do not form part of this challenge, although I have set them out for clarity.

On 23 January 2025, the SSWP responded to the grant of permission to appeal by filing submissions noting the reasons for the grant of permission and continuing:

“The Respondent agrees that setting aside and remission is the appropriate course of action in this case, and therefore notifies the Tribunal that she:

a.

Has no objection to the Tribunal’s proposed approach of the case being dealt with in a short decision with limited reasons; and

b.

Does not invite the Upper Tribunal to re-make the decision, but rather invites the Tribunal to remit the matter to the First-tier Tribunal.”

Thereafter, although copies of this submission from the SSWP were sent to the Appellant and the Second Respondent in February 2025, no response has been filed by either. The case was therefore referred to me for decision.

I am satisfied that that I can fairly resolve the issues on the paperwork before me. No one has asked for an oral hearing of the appeal or given reasons why the SSWP’s submissions, on the law or on the disposal of the appeal, should not be accepted.

At issue in the appeal before the F-tT was whether (i) payments made in respect of a mortgage; and (ii) house insurance expenses could be deducted as “special expenses” under Regulation of 65 of the Child Support Maintenance Calculation Regulations 2012, when the First Respondent calculated the child support due to the Appellant from the Second Respondent.

The factual background was that the Appellant and Second Respondent had jointly taken out a mortgage on the family home when they were still a couple, and before the Second Respondent became a non-resident parent. The Appellant and qualifying children continue to live in that home. Under a Family Court Order:

The F-tT held that both the mortgage payments and the insurance payments could be treated as “special payments” under Regulation 65.

At the permission hearing in November 2024, the SSWP argued that the F-tT’s treatment of the mortgage expenses, which it considered were deductible as special expenses, was correct. However, the SSWP raised a query about the status of payments made in respect of the home insurance costs, which had also been deducted by the F-tT; this second issue is the reason why the SSWP concedes that the appeal should be allowed.

The applicable law is set out, first, in section 11(6) of the Child Support Act 1991, which requires the SSWP to calculate maintenance in accordance with Schedule 1 of that Act, unless an application for a variation is made and agreed. Under s28F(1), a variation may be based on the circumstances defined in Part 1 of Schedule 4B of the Act or the 2012 Regulations.

Paragraph 2(1), Part 1 of Schedule 4B allows non-resident parents to apply for a variation based on “special expenses”. The detail of the category of “special expenses” relied on by the Second Respondent in this case are set out in Regulations 65.

Regulation 65 provides, relevantly:

The Mortgage Contributions. For the sake of clarity about the status of the main sum at issue before the F-tT, I observe that I respectfully agree with Upper Tribunal Judge Fitzpatrick that the F-tT was correct to find that the mortgage contributions were properly treated as special expenses under Regulation 65. Its reasons were clearly set out in paragraph 50 of the Statement of Reasons: “Regulation 65 provides for the repayment of debts to which paragraph (2) applies as constituting special expenses where the debt was incurred before [the Second Respondent] became a nonresident parent and at a time when the parties were a couple. The debt applied to a debt incurred for the joint benefit of the parties and where there is a legal liability to repay the debt and for the benefit of the qualifying children.” Those reasons were an accurate reflection of both the facts, which were not in dispute, and the law as set out in Regulation 65(1) and (2). The ‘disqualification’ of mortgage payments under Regulation 65(3)(h) does not apply, as the mortgage related to a property which was and continues to be the home of the person with care (i.e. the Appellant) and a qualifying child.

The Appellant had relied on Regulation 65(4), which disqualifies certain payments made under a court order. But those disqualifications do not include “an amount which is payable under a mortgage or loan … which falls within the exception set out in sub-paragraph (h)”. The “exception” identified is that which applied in this case, i.e. “where that mortgage or loan was taken out to facilitate the purchase of, or to pay for repairs or improvements to, any property which was, and continues to be, the home of the person with care and any qualifying child.”

The Insurance Contributions. I further accept that the SSWP correctly notes that, by contrast, the insurance payments may well have fallen into a separate category, as a non-permissible expense. Regulation 63(3)(i) disallows payments made by the non-resident parent in respect of insurance policies unless the policy is taken out to discharge a mortgage or a property loan. (Equally, Regulation 65(4) will disallow payments made under court orders, including in respect of insurance, unless they fall within this exception in Regulation 65(3)(i)).

The SSWP notes that “The F-tT did not make an express finding on the nature of the insurance policy and it not clear that there was any evidence to support any implicit finding that the policy was to discharge the mortgage”.

I agree that in order to have accepted that the payment of £25 in respect of insurance costs was a “special expense” within the meaning of Regulation 65, there needed to be evidence before the tribunal that the insurance policy was for that purpose. According, the F-tT erred in law by failing to explore this factual issue, or to make any findings of fact to support its conclusions. The decision will be set aside on this basis.

The SSWP invites the Upper Tribunal to remit the case back to the First-tier Tribunal, to make any further findings, calculations or directions needed. The remaining two parties have not made any submissions in reply. Remission will allow them, if they so choose, to produce evidence on the nature of the insurance policy and thus, whether the payments of £25/month should have been regarded as special expenses.