“…………… “earnings” means in the case of employment as an employed earner, any remuneration or profit derived from that employment and includes …….”
Part III of Schedule 1 is headed “other income”, and paras. 8 and 15 provide:
“8. The amount of the other income to be taken into account in calculating or estimating N or M shall be the aggregate of the following amounts determined in accordance with this Part.
Any other payments or other amounts received on a periodical basis which are not otherwise taken into account under Part I, II, IV or V of this Schedule except payments or other amounts which –
(a) are excluded from the definition of “earnings” by virtue of paragraph 1(2);
(b) ………………………..”
By reg. 1(2) of the MASC Regulations ““employed earner” has the same meaning as in section 2(1)(a) of the [Social Security Contributions and Benefits Act 1992].” It is defined there as
“a person who is gainfully employed in Great Britain either under a contract of service, or in an office ……”
In my judgment it is clear that Mr F’s employment in Afghanistan was not employment “in Great Britain.” The First-tier Tribunal therefore erred in law in holding that Mr F’s salary in respect of his work in Afghanistan was “earnings” falling within para. 1 of Schedule 1 to the MASC Regulations.
However, CMEC submits in this appeal that the First-tier Tribunal reached in substance the right result, because the earnings in Afghanistan fell to be taken into account under para. 15 of Schedule 1. The response to that on behalf of Mr F is as follows:
“under the rule of statutory interpretation “expressio unius exclusio alterius”, “other income” cannot include any element of earnings. The expression “other income” must surely be reserved for other receipts of money, for example payments made under a trust arrangement or deed. The appellant has had no revenue from “other income” if the logic of the previous sentence is accepted.”
CMEC is in my judgment right in submitting that the earnings in Afghanistan fell within para. 15. I do not accept the argument on behalf of Mr F that amounts which fall within the ordinary meaning of “earnings”, but are not within Part I of Schedule 1, cannot be “other income” falling within Part III. I think that the better construction, looking at reg. 7 of the MASC Regulations, and Parts I and III of the Schedule, as a whole, is that items which fall wholly outside Part I, by reason of the way in which “earnings” are defined, are capable of falling within para. 15 unless expressly excluded from it. The key provision is really reg. 7 of the MASC Regulations. The argument on behalf of Mr F has to be that reg. 7(1)(c), in referring to “other income”, is not intending to include amounts which are in the nature of “earnings”, dealt with by reg. 7(1)(a). However, that argument in my judgment fails by reason of the fact that by reg. 1(2) “earnings” (including therefore the use of that expression in reg. 7(1)(a)) “has the meaning assigned to it by paragraph 1, 2A or 3, as the case may be, of Schedule 1”. If, therefore, something does not fall within para. 1 (e.g. because it is from an employment abroad) it is not “earnings” for the purposes of any of the provisions of the MASC Regulations, and there is therefore no reason why it cannot fall within para. 15, unless expressly excluded.
That conclusion also seems to be indicated by the fact that para. 15(a) expressly exludes payments or other amounts which are excluded from the definition of “earnings” by virtue of paragraph 1(2). If the argument put forward on behalf of Mr F were correct, para. 15(a) would appear to have been strictly unnecessary, although I accept that it could still have been included for the avoidance of doubt and because many of the express exclusions in para. 1(2) are very arguably not within the ordinary meaning of “earnings” in any event. If the result contended for on behalf of Mr F had been intended, one would expect para. 15(a) to have been worded along the lines: “are in the nature of remuneration from employment or self-employment but do not fall within Part I of this Schedule.”
It is further submitted on behalf of Mr F that, in reliance on advice from the CSA that his earnings in Afghanistan did not fall to be taken into account, he expended those earnings for the purchase and renovation of his current home, and they are therefore no longer available for the payment of child support maintenance. The First-tier Tribunal made a finding that “the failure of [Mr F] to pay child support arises solely from advice given by CMEC.” However, there is no basis on which arguments based on estoppel or hardship, or wrong advice given by the CSA, can be considered by a First-tier Tribunal on an appeal in relation to the amount of child support maintenance payable under the formula. The First-tier Tribunal (and therefore the Upper Tribunal in re-making the First-tier Tribunal’s decision) must apply the provisions of the 1991 Act and the MASC Regulations as it finds them, without regard to arguments based on estoppel or broad considerations of equity: see, for example, CCS/265/2007 at para. 39.
In my judgment, therefore, although the First-tier Tribunal’s reasoning was incorrect, and it is therefore appropriate to set aside its decision, it reached in substance the right result, and I should therefore substitute a decision to the same effect.
The departure direction appeal
In view of my decision on the formula appeal, the First-tier Tribunal’s decision in respect of the departure direction appeal was plainly correct.
Charles Turnbull
Judge of the Upper Tribunal
August 2011