Child Support Agency fights for survival

Patricia Carty, social security legal adviser at Law Centre (NI), reviews some recent Commissioners and Court of Appeal cases involving the increasingly troubled Child Support Agency.

The Child Support Agency (CSA) has faced a constant and relentless barrage of public and political criticism in 2005. In January, the House of Commons Select Committee on Work and Pensions called for the CSA to improve its service within weeks or face being scrapped. The Chairman of the Committee warned that the CSA was operating on borrowed time and that if it could not be rescued, it would have to be replaced.

If anything, the situation has continued to deteriorate throughout the year and the report of the Public Accounts Committee in September has led many to conclude that it has become inevitable that the CSA will be replaced. The former social security minister, Frank Field, recently wrote an open letter to the prime minister describing the CSA as ‘in meltdown’. The CSA is collecting less maintenance as arrears grow and fewer claims are being processed. More than £1 billion in maintenance has now been written off and more than 40% of claims under the new system, which was introduced in 2003, remain unprocessed.

Complaints of poor standards in decision making and delay have not been effectively addressed with the CSA acknowledging that more than four out of ten decisions contain errors. Problems with the computer system remain unsolved and there is still no date for the transfer of all cases on to the new system.

It is not surprising, in light of the complexity of the legislation under the old and new systems and the highlighted problems with decision making, that many cases have been considered on appeal by the Child Support Commissioners. Some summaries of significant cases are set out below.

CSC6/03-04 (T)

Facts of the case

This was an appeal to the Commissioners by an absent father. The CSA had decided that he should pay £5.40 every week in maintenance for his three children, based on his declared income of £89.66 per week from self employment. When the mother applied for a departure direction claiming that her former husband ran a profitable agricultural business, was involved in property development and had two cars, a jeep, a caravan and a van, the Department refused to look at this income again and she appealed to a tribunal.

The tribunal made a departure direction on the grounds that the father’s lifestyle was inconsistent with his declared income and that he had joint ownership of assets which were capable of producing a higher income. It found that his lifestyle required a weekly income of £975.43 per week and directed the CSA to make a fresh assessment on this basis. The father appealed.

Decision

The appeal was allowed on technical points but the victory was a hollow one for the father. The Commissioners proceeded to decide the appeal itself in terms similar to those reached by the tribunal and was robust in its criticism of both the father and the CSA. In deciding that the absent father’s income to support his lifestyle was £975.43, the Commissioners made the following points.

In departure direction cases, the tribunal’s task is not to ascertain the actual income of the non-resident parent but the income required to support her/his lifestyle. Provided the finding on income required is within a reasonable range, it is not in error of law because another figure might have been reached by a different tribunal.

Overall lifestyle is a broad term and includes the entire way of living of the non-resident parent insofar as that way of living could reasonably be expected to have financial implications. It includes:

• ability to service and discharge loans other than those taken into consideration in reaching the decision in relation to income from self employment;
• engagement in any venture which has financial implications, the income from which was not included in the Child Support assessment and also engagement in a business in a capacity different from that declared in the Child Support assessment;
• the ability to service debts which are being paid through the accounts of the business which are not business debts but personal debts.

A tribunal will not err in failing to consider if lifestyle is financed by capital where this has not been raised as an issue.
In deciding whether it is just and equitable to give a departure direction, it will generally be necessary for a tribunal to consider how the departure direction will affect the Child Support assessment. However, in this case it was not necessary due to the gross discrepancy between the income required to support the lifestyle and that declared to the Child Support Agency.

Tribunals should generally give sufficient detail to explain the decision and, if a departure direction is made, to explain the calculation of figures used.

The Commissioners were very critical of the Agency’s failure to effectively investigate the absent father’s financial position and described its performance as ‘distinguished by its inadequacy.’ They were also outspoken in their criticism of the absent father and commented that they considered it reprehensible that such untruthfulness and obfuscation should take place in a situation involving the financial support of the appellant’s children.

The strong approach taken by the Commissioners has received a warm welcome from many pressing for a more effective system of assessing and collecting child maintenance.

KEHOE V SECRETARY OF STATE FOR WORK AND PENSIONS

The House of Lords considered an appeal in the case of Kehoe v Secretary of State for Work and Pensions. The House of Lords decided that the mother could not rely on provisions of the European Convention of Human Rights to challenge rules in the Child Support legislation. In particular, she was prevented from applying to the courts to enforce collection of maintenance payments due from the absent father of her children.

The House of Lords decided that it was a deliberate feature of the Child Support legislation that it was for the Secretary of State (the Department in Northern Ireland) to assess and enforce the maintenance obligation owed by the non-resident parent to the child. Article 6 of the ECHR was concerned with safeguarding rights not according them. Her civil rights under Article 6 were therefore not engaged.

DSD V MacGEAGH AND MacGEAGH

Facts of the case

In this appeal, the absent father applied for a departure direction from a CSA maintenance assessment on the grounds that his wife had a higher income than declared and that her housing costs were unreasonably high and could be met by her new partner.

A major issue in the case was that the mother was in receipt of Working Families Tax Credit and that under the Child Support scheme this prevented a departure direction being made even though the absent father argued that she was not eligible for it.

Decision

The Court of Appeal decided that the Social Security Commissioners were wrong to interpret the legislation to comply with the Human Rights Act before first considering whether the legislation engaged and violated the European Convention of Human Rights. The court made the following decisions.

Article 1 of the first protocol is not engaged by the statutory requirement to make child maintenance payments. The Child Support scheme is not taking away from an individual what is rightfully his but rather the enforcement of a legal and moral duty on the part of a parent to maintain his offspring. The underpinning process of Article 1 of the first protocol is the restraint of expropriation by the state or its agents of personal possessions for public purposes. It is not designed to protect individuals who are required by law to discharge personal responsibilities.

If Article 1 had been engaged, it would not have been violated. In any case, even if it had been, the need to ensure that absent parents continue to support their dependent children and not avoid or mitigate that obligation by insisting that the Child Support Agency show that the benefit payable to the parent with care was lawfully in payment was sufficiently important to justify interference with the absent parent’s rights.

Article 6 is not engaged. A parent with care no longer has a right to require an absent parent to make periodical payments for the maintenance of their child. This right now belongs to the CSA. Mrs MacGeagh cannot assert an Article 6 violation in relation to her husband’s failure or refusal to make Child Support payments and also Mr MacGeagh has no right to dispute her benefit entitlement.

The Commissioners erred in holding that the words ‘in payment’ should be interpreted as meaning ‘not unlawfully in payment’ and giving the CSA the role of determining whether WFTC was not unlawfully in payment.

Conclusion

The CSA has a crucial role to play in tackling child poverty. It is currently failing many of its customers and its future depends on its ability to transform itself to effectively deal with the problems that have troubled it now for years.