It may not be completely intuitive, but that is how it is supposed to work. Space before and space after apply between paragraphs in a layout section but not at the beginning or end of a layout section or at the beginning or end of a page. It is sort of like the way the last character in a word can be right against the margin and yet the next line does not have to start with a space; the area outside the margins can "count" for this kind of white space. A layout break works like a margin here, even if it is in the middle of a page (and not necessarily preceded by white space).
If you are producing a multipage document, you normally want the tops of the text blocks of each page to line up at the margin, not jump up and down if one page happens to start with a new paragraph that has a space before set.
To deal with your situation with needing the white space at the beginning of a new layout section, with the cursor in that section, use the Layout pane of the Inspector to set the "Before" margin of that section to, for example, 14 pts.
I understand what you are saying it all makes sence BUT... it is eatting the before paragraph space SO... visually it ruins the design. Pages should see it like this - becasue you are using Background Fills I will align the top of the 'background fill' to the top of the layout section. So visually - tho the word will start lower than the top of the new Layout section - the coloured background fill for the paragraph will algin with the top. Adding Space before the margin of that section doesn't add the backgrounf fill. What I ended up doing was inserting a line and setting the font size to 1. There is still a hairline at the top but livable.
Thanks for the explaination. Helpful.
Try applying the paragraph before space to the layout break itself or inserting a return before that and applying it to thet or space after paragraph to the paragraph before the layout break.
There is also a Layout margin that is adjustable in:
Inspector > Layout > Layout Margins
So there are lots of places to control what you want.