DECISION OF THE CHILD SUPPORT COMMISSIONER
1.	My decision is as follows. It is given under section 24(2) and (3)(d) of the Child Support Act 1991.
1.1.	The decision of the Liverpool appeal tribunal under reference U/06/900/2003/00067, held on 10 June 2003, is wrong in law.
1.2.	I set it aside and remit the case to a differently constituted appeal tribunal.
1.3.	I direct that appeal tribunal to conduct a complete rehearing of the issues that are raised by the appeal and, subject to the tribunal’s discretion under section 20(7)(a) of the Child Support Act 1991, any other issues that merit consideration. 
The tribunal must investigate the absent parent’s income. It must then determine if the default provisions* apply. If they do, they must be applied. There is then no scope for applying any of the backup provisions. If the default provisions do not apply, the backup provisions* apply. They do not limit the evidence on which the tribunal may rely and the tribunal may, in particular, rely on evidence drawn by inference from the absent parent’s life-style. 
*	These terms are explained in paragraphs 7 to 11.
Before this case is listed for rehearing, it must be put before a legally qualified panel member to consider whether it is necessary or appropriate to give directions under regulation 38(2) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999. In particular, the district chairman may wish to 
•	set a timetable for the production of further evidence of the absent parent’s income; and 
•	give directions on the nature and form of evidence that should be provided.

The appeal to the Commissioner
2.	This case concerns the child support maintenance payable with respect to Victoria and Christopher. 
3.	In the terminology of the child support legislation, the appellant is their absent parent under the assessment, and the second respondent is their parent with care under the assessment. I shall refer to them in those terms.
4.	The case comes before me on appeal to a Commissioner against the decision of the appeal tribunal brought by the absent parent with my leave. The Secretary of State supports the appeal. 
The issue
5.	The issue in this case is the calculation of the absent parent’s income for the purposes of a formula assessment of his liability for child support maintenance in respect of his children.
The legislation
6.	The absent parent is self-employed. So, the relevant legislation is contained in Chapter 2 of Schedule 1 to the Child Support (Maintenance Assessments and Special Cases) Regulations 1992. 
7.	Chapter 2 contains two sets of provisions for the determination of the earnings from self-employment. One set of provisions is the default provisions, the other is the backup provisions that apply if the default provisions do not apply. 
The default provisions
8.	The default provisions rely on documents submitted to, or issued by, the Inland Revenue. It is clear, from the structure of Chapter 2 and the wording of the paragraphs in that Chapter, that the default provisions are those that must be applied except in the limited circumstances where they do not operate.
9.	The default provisions are set out in paragraphs 2A and 2B. They are adjusted by paragraph 4, which applies to childminders, and by paragraph 5A*(1) and (2), which govern the period of the accounts that must be used.
10.	There are two escape clauses from the default provisions.  One is governed by paragraph 2C, which applies if it is not reasonably practicable for the parent to provide the information in the form submitted to, or issued by, the Inland Revenue. The other is governed by paragraph 5A*(3), which applies if the evidence submitted in the appropriate form for the appropriate period does not accurately reflect the parent’s income from self-employment. If either of these clauses applies, the backup provisions apply. 
*	The Secretary of State’s submission states correctly that paragraph 2A is subject to paragraph 5A, but then goes on to refer to paragraph 5 instead of 5A. See paragraph 9 on page 64.
The backup provisions
11.	These are set out in paragraphs 3 and 5. Paragraph 3 deals with the income that is taken into account and the deductions that may, or must, be made from it. Paragraph 5 deals with the period over which earnings must be determined. Paragraph 5(3) deserves a mention. It allows the use of a different period in order to obtain a more accurate reflection of the parent’s normal earnings. 
How the tribunal went wrong in law
12.	The tribunal made two mistakes in law. 
The use of the backup provisions
13.	First, it applied paragraph 3(4)(b)*, which is one of the backup provisions. In order to do that it, it must have relied on one of the escape clauses from the default provisions. It did not explain why it did that. 
*	In fact, the tribunal referred to paragraph 4b, but as it was referring to the depreciation disallowance, that must have been a mistake for paragraph 3(4)(b).
Evidence by inference
14.	Second, it refused to take account of the absent parent’s life-style as evidence of his income. It commented that this could only be taken into account under an application for a departure direction. If the tribunal had applied the default assessment provisions for the self-employed, that would have been correct, because those provisions are comprehensive on the assessment of self-employed earnings. However, if the tribunal was using the backup provisions (and it expressly relied on one of those provisions), it was not limited to any particular form of evidence of income. It was entitled to draw inferences from the absent parent’s life-style and from any other evidence that was indicative of his income. 
15.	I have considered the possibility that the tribunal misunderstood the effect of paragraph 5(3), believing that it prevented the tribunal from taking into account anything other than accounting evidence of income. But if that is what the tribunal believed, it misconstrued the provision, which is only concerned with the period covered by the assessment, not the evidence on which the assessment may be based. 
Summary
16.	The tribunal went wrong in law and its decision must be set aside. I direct a rehearing so that the parties may both present such evidence of the absent parent’s income as they wish to the appeal tribunal.

Signed on original	Edward Jacobs
Commissioner
19 January 2004