Dalton, R (on the application of) v The Secretary of State for Work and Pensions

Section 41B of the Child Support Act 1991 gives the Secretary of State discretion to reimburse, partly reimburse or refuse to reimburse a child-support overpayment where recovery by adjustment is impossible or inappropriate. The discretion must be exercised consistently with the statutory purpose and by considering all relevant matters. Relevant considerations include responsibility for creating the overpayment, who received the money, and whether it benefited the qualifying child. A tribunal’s retrospective revision of a maintenance assessment does not determine the separate reimbursement discretion. An administrative error concerning appeal rights does not require reimbursement where it has been considered and the decision remains lawful.

The claimant sought judicial review of the Secretary of State’s decision under section 41B of the Child Support Act 1991 not to reimburse an overpayment of child support amounting to £43,617.72. The overpayment arose after a First-tier Tribunal retrospectively replaced an interim maintenance assessment with a lower final assessment. The claimant argued that the excess was not legally child support and that the Secretary of State had exercised the reimbursement discretion unlawfully.

The central issues were whether section 41B applied to the excess payment and whether the decision-maker had properly considered the tribunal’s findings, the claimant’s responsibility for the overpayment, and the earlier incorrect advice that there was no appeal against refusal to convert the assessment.

1. Claim dismissed. The excess payment was an overpayment of child support for the purposes of section 41B. An overpayment necessarily exceeds the non-resident parent’s ultimate liability; treating the excess as outside the statutory scheme would deprive section 41B of effect. Section 41B(1) and (2) contemplate a lawful discretion not to reimburse.
2. The discretion under section 41B(2) is uncircumscribed by other legislative provisions, but must take account of all relevant matters and the statutory purpose. The Secretary of State was required to consider the guidance, including responsibility for the overpayment, who was overpaid, and whether the maintenance benefited the qualifying child.
3. The claimant’s prolonged failure to engage with the statutory scheme, provide credible information and make maintenance payments was a material basis for attributing responsibility for the overpayment. The Secretary of State was entitled to consider the adverse credibility findings of the 2006 Tribunal and to treat later information with caution.
4. The 2013 Tribunal’s finding that sufficient credible information existed by December 2008 did not determine the section 41B discretion. The tribunal and the Secretary of State had different functions. The Secretary of State had considered the tribunal’s decision, and his different assessment of the claimant’s earlier conduct and credibility was not irrational or unlawful.
5. The incorrect advice in February 2009 that there was no appeal right was relevant. Applying the approach described by Lord Nicholls in Farley v Secretary of State for Work and Pensions [2006] 1 WLR 420, an outstanding appeal might be relevant to whether enforcement would be oppressive, but would not necessarily prevent enforcement. Given the claimant’s history, proceeding with enforcement could still have been reasonable. The decision-maker had considered the error and was entitled not to reimburse.

The application for judicial review was dismissed. Any costs application and any application for permission to appeal were to be made within seven days.