Social Security Case Law - Spring 2024

Headnote

Case concerning the allocation of child benefit when parents share parental responsibility equally.  Decision makers should follow the policy and guidance and decide whether one parent or the other has the greater responsibility of care.  If this is not clear, then the decision maker must go on to consider the impact the decision will have on each parent and who stands to lose the most.

Background

The Applicant had three children and shared equal parental responsibility with her former husband.  The Applicant earned the minimum wage and relied on tax credits and child benefit.  Her former husband was a high earner and was subject to the high income child benefit charge (if he received child benefit he was liable to repay it to HMRC).  HMRC made a decision to award the child benefit for one child to the Applicant’s former husband, and the child benefit for the two other children to the Applicant.

Legal Issue

Whether HMRC’s decision to award child benefit for one child to the Applicant’s former husband was unlawful and/or ultra vires and/or a violation of the Applicant’s rights under Article 1 Protocol 1 of the ECHR.

Relevant Legislation

Social Security Contributions and Benefits (Northern Ireland) Act 1992 (para 5 schedule 10) which provides that where two persons could each have entitlement to child benefit, they may jointly elect who shall be entitled or, in default of elections, HMRC may ‘in its discretion determine’.

The Judge also considered the Child Benefit Procedural Guide – Rival Claims Legislative: Discretionary Decisions – Step 6.  This guidance states that the main factor in considering shared care cases is to decide whether one parent or the other has the greater responsibility of care.  The guidance goes on to state that where it is not clear which parent has the greater responsibility of care then (1) it is important to consider the impact the decision will have on each parent (2) child benefit is not a means tested benefit but where one or both parents rely on other benefits, a disallowance may have a potentially more adverse effect.  The decision will not be seen in law as a ‘fair’ decision if this is not taken into account in the consideration (3) consider who stands to lose the most.

Decision

The Judge quashed the decision and remitted it back to HMRC to reconsider by a different decision maker.

The Judge held that the decision maker had misdirected themselves as they had decided that the ‘responsibility of care is clear’.  The Judge found that the decision maker should have asked whether one parent or the other has the greater responsibility of care.  If the decision maker had asked that question, then the only answer would have been that neither had greater responsibility of care.  The Judge held that the decision maker should have followed the further steps within the Child Benefit Procedural Guide – Rival Claims Legislative: discretionary Decisions and consider the impact of the decision and the test ‘who stands to lose the most.’  As the Judge found that there had been a breach of HMRC policy and guidance, he did not consider the A1PI ECHR challenge.