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Neutral Citation Number:
Reported Number:	R(CS)2/08
File Number:	CCS 2806 2006
Appellant:	(Chandler v Secretary of State for Work and Pensions and another [2007] EWCA Civ 1211)
Respondent:
Judge/Commissioner:	Judge C. Turnbull
Date Of Decision:	26/02/2007
Date Added:	30/11/2007
Main Category:	Child support
Main Subcategory:	calculation of income
Secondary Category:
Secondary Subcategory:
Notes:	Calculation of income – periodical payments to director from small family company in repayment of loan – whether income or capital The non-resident parent was the sole director and majority shareholder in a company. He made a loan to the company and arranged for the company to pay him back at a rate of £2,500 per month. The maintenance assessment did not include those repayments as income and the parent with care appealed. The tribunal held that the payments should be treated as income. The non-resident parent appealed to the Commissioner, who held that the payments fell within paragraph 15 of Schedule 1 to the Child Support (Maintenance Assessments and Special Cases) Regulations 1992 (the MASC Regulations) as “any other payments or other amounts received on a periodical basis …”. The non-resident parent appealed to the Court of Appeal. Held, allowing the appeal, that: 1. the Child Support Act 1991 and Regulations draw a clear demarcation between capital and income and a periodical drawdown of capital is not “income” (Morrell v Secretary of State for Work and Pensions [2003] EWCA Civ 526 (reported as R(IS) 6/03), R v West Dorset DC ex parte Poupard (1988) 20 HLR 295 and Longsdon v Minister of Pensions and National Insurance [1956] 1 QB 587 distinguished) (paragraph 33); 2. paragraph 15 is a “sweep-up” provision for other kinds of income not specifically dealt with in other provisions and in that context cannot be read as including a periodical drawdown of capital. If Parliament had wanted to include periodic drawdown of capital it could have expressly so provided (paragraph 33); 3. the contrary interpretation would lead to irrational distinctions that could not have been intended by a reasonable legislator, as lump sum repayments or irregular repayments of varying amounts would not be caught by paragraph 15 (paragraph 38). The Court remitted the case for a fresh determination to consider whether any of the anti-avoidance provisions in the MASC Regulations applied. EWCA Civ 1211
Decision(s) to Download:	CCS 2806 2006-00.doc R(CS) 2-08ws.doc