[2024] UKUT 259 (AAC)

The CMS (Secretary of State) does not support LM’s appeal. They make the following submissions (the non-resident parent is referred to as NRP, the parent with care as the PWC and the qualifying child as the QC):

“9.

Firstly, the policy intent behind variations and special expenses is to allow for additional financial factors to be considered which are not captured in the maintenance calculation. A special expenses variation is intended to allow a NRP to apply for a reduction in child maintenance if they incur certain additional costs relating to the PWC, QC or relevant other child which are not taken into account in the normal maintenance calculation rules. If a variation is awarded for special expenses, the NRP’s gross weekly income is reduced by the weekly amount of those expenses allowed.

10.

A variation can be considered under Regulation 67 if the NRP makes payments to a mortgage lender, insurance company or PWC for a mortgage or loan in certain circumstances.

…11. [Regulation 67(2)(2)(a)] … doesn’t apply in this case because the debt related to the mortgage repayment is a mortgage which was taken jointly by the NRP and PWC.

12.

To satisfy the requirements set out in the regulation 67, it should have been taken by a person other than the NRP. The strict wording suggests that the mortgage should have been taken out by the PWC. The debt also does not satisfy regulation 67(2)(a)(iv) as the debt is a legal mortgage and the NRP has a legal and equitable interest in the property. Therefore, it does not fall within the scope of regulation 67.

13.

Accordingly, paragraph 47 in the Statement of Reasons (SOR) correctly finds:

“the mortgage was not taken out by a person other than the non-resident parent. [NM] is the non-resident parent and he and [LM] took the mortgage out jointly in 2018.”

14.

The correct regulation to apply in the case is regulation 65(3)(h) which sets out that for the purposes of regulation 65, prior debts would not include amounts payable by the NRP under a mortgage, except 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 PWC and any qualifying children.

15.

In this case, the debt falls within this exception as the PWC and QC continue to live there. It is also important that we consider regulation 65(3)(a) which states that a debt which would otherwise fall within paragraph (1) would not be permitted where NRP has retained for the NRP’s own use and benefit the asset in connection with the purchase of which the debt was incurred.

16.

It seems that the interpretation of “use and benefit” is taken not to mean an interest in the property, but rather could mean where the NRP continued to use the property to live in. Therefore, this would not exclude the repayment of mortgage where the NRP does not continue to live there or utilise the property for his advantage.”

LM’s appeal submissions and reply to the submissions of the CMS are in summary:

NM agrees with the FtT’s decision.