Family Law Hub

Humphreys v The Commissioners for Her Majesty's Revenue and Customs [2012] UKSC 18

  • (Lords Walker, Clarke, Wilson and Reed and Lady Hale) 16 May 2012

    In a tweet: Child tax credit cannot be shared between separated parents

    Summary: A case concerning the scope for justifying indirect discrimination against men in the allocation of Child Tax Credit ("CTC"). As we all know, CTC is a benefit payable in respect of each child irrespective of whether the applicant is employed. It is administered solely by HMRC. The amount of CTC payable depends on the income of the applicant.

    Under the Child Tax Credit Regulations 2002 (SI 2002/2007), CTC in respect of each child is payable to only one person even where the care of the child is shared between two or more people. Entitlement to CTC depends on who is deemed responsible for the child. Regulation 3(1) creates a set of rules for determining this:

    Rule 1 - where the child lives with one person, that person is treated as responsible; and

    Rule 2 - where the child lives with two or more persons in different households, the person having "main responsibility" for the child is treated as being responsible.

    The appellant was a father ("F") who had two children.  Between January 2004 and December 2005 both children had lived with their mother but had retained substantial contact with F, spending most weekends and half of all the school holidays with him. F applied for CTC. HMRC considered his application under Rule 2 and determined that the mother had main responsibility for the children. F's application was therefore rejected.

    F appealed, arguing that the legislative scheme breached Article 14 (non-discrimination) and Article 1 of the First Protocol (protection of property) of the European Convention on Human Rights ("ECHR") in that it indirectly discriminated against men because, on the whole, fathers were more likely than mothers to have secondary (but nonetheless significant) responsibility for the care of their children.

    HMRC subsequently accepted that the legislative scheme indirectly discriminated against men. The key issue before the Supreme Court was whether that indirect discrimination was objectively justified. The Court of Appeal had upheld an earlier decision that the discrimination was justified.

    Held: F's appeal was dismissed. Lady Hale gave the leading judgment.

    F had relied upon the Court of Appeal decision in Hockenjos v Secretary of State for Social Security [2004] EWCA Civ 1749 where it had been held that the denial of child supplements to a father's jobseeker's allowance where the father and the mother shared roughly equal care of the children was unjustified indirect discrimination. Following that decision, HMRC had conducted a review of the "no-splitting" rule in CTC, the results of which, it was noted, had helped persuade the Court of Appeal that there were features of this case that distinguished it from Hockenjos.

    Lady Hale stated that the specific test under the ECHR for justifying discrimination in the context of state benefits had been set out in Stec v United Kingdom (2006) 43 EHRR 1017:

    "A difference in treatment is discriminatory if it has no objective and reasonable justification; in other words, if it does not pursue a legitimate aim or if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be realised."

    However, when it came to general measures of economic and social strategy, a wide margin of appreciation was allowed to member states:

    "The Court will generally respect the legislature's policy choice unless it is "manifestly without reasonable foundation"."

    F's main complaint was that the scheme left him with nothing to provide for the needs of his children when they stayed with him. Although the mother could choose to share the CTC, the Supreme Court observed that neither HMRC nor the courts could compel her to do so. HMRC argued that the aim of the scheme was to reduce child poverty and CTC was paid to the main carer in the expectation that that person was the one who incurred most of the costs in looking after the child. Splitting the CTC between two carers of modest means risked neither of them being able to provide for the child's needs. HMRC also submitted that splitting CTC on the basis of means introduced administrative complexities and increased costs into the system as well as highlighting that the current definition of child poverty relied upon household income which meant that targets were easier to meet if support was given to single households rather than split.

    In dismissing F's appeal, the Supreme Court concluded that the state was entitled to decide that children would be better off if CTC was distributed to one household rather than being divided between two households. As that method was simpler and less expensive to administer, the Supreme Court also concluded that it would maximise the funds available for distribution. It was reasonable for the state not to link the payment of support for children to the time a parent spent with their child. Sympathising that it was perhaps unfortunate that courts, when making a contact and/or residence order, now no longer had the power to make consequential orders about benefit sharing, the Supreme Court held that the no-splitting rule was a reasonable rule for the state to adopt and that the indirect discrimination could be justified. 

Case note, published: 17/05/2012


Published: 17/05/2012


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