HANSARD
Child Support (Miscellaneous Amendments) Regulations 2019
- Motion to Approve
- 4:10 pm
- Moved by
- That the draft Regulations laid before the House on 9 May be approved.
- My Lords, these regulations amend child maintenance legislation to enable the delivery of the child maintenance compliance and arrears strategy. The new child maintenance scheme was launched in 2012. It is underpinned by the key principle of encouraging and supporting parents to take responsibility for their children’s upbringing. We know that children have better outcomes when their parents work together.Following separation, we want parents to make private, family-based arrangements for child maintenance where feasible, avoiding state intervention altogether if possible. Where parents are unable to make a private arrangement, the Child Maintenance Service can support them. This can be done by calculating a maintenance liability and enforcing payments where appropriate.Following staged implementation, the Child Maintenance Service is working well and avoiding the widely recognised problems encountered by previous schemes. This Government now want to build on and make further improvements to the Child Maintenance Service.Last November, this House approved regulations that closed known loopholes, introduced tough new sanctions for those who evade their responsibilities and addressed the historic arrears built up under the Child Support Agency. This package of regulations would introduce further measures to support the compliance and arrears strategy. It includes provisions to make deductions from benefits more consistent, improve information-gathering processes and address uncollectable debt. This is alongside clarifications to the calculation and fees regulations so that they better reflect the intent of the 2012 reforms.I will first explain the proposed changes to deductions from benefit payments. This Government believe that all parents should support their children, irrespective of their financial circumstances. Therefore, where a parent is in receipt of benefit, they should continue to contribute to their children in line with their income. This has been a long-standing feature of successive child maintenance schemes.Under the current scheme, parents receiving certain benefits are liable to pay the flat rate of maintenance. Where a parent does not make payments voluntarily, the CMS can deduct the child maintenance they are liable to pay directly from their benefit payment. The regulations before you today are designed to make these deductions more consistent, as currently there are different rules governing what can be taken for ongoing maintenance and towards child maintenance arrears.At present, the Child Maintenance Service can make weekly deductions of £8.40—£7 plus £1.40 in collection fees—towards ongoing maintenance from certain benefits and, at the same time, £1.20 towards arrears from a smaller list of benefits. So some parents have deductions of £8.40 per week whereas others contribute a total of £9.60.
- 4:15 pm
- I will now move on to the proposals surrounding protected trust deeds. A protected trust deed is an arrangement in Scots law between a debtor and their creditors. Scots law provides that child maintenance arrears that are covered by the deed cannot be collected once a parent enters into its terms. Currently, arrears covered by such a deed are permanently suspended on the child maintenance computer systems. Although dividends may be received towards arrears while the deed is in operation, once it expires, any arrears covered by the deed are legally uncollectable. These regulations will extend the write-off powers of the CMS to cover arrears that are within the terms of a protected trust deed once the deed has expired. This change stops the CMS from holding on to information about uncollectable arrears at a cost to the taxpayer and keeps our legislation in line with that in Scotland, providing clarity to parents.
- We propose changes to regulations relating to the powers of entry used by the CMS to access private properties. Sometimes there is a need for the CMS to enter private properties to gather information. These powers of entry provisions allow the CMS to gather information to recover arrears, trace a parent, or make sure that the maintenance calculation is up to date and accurate. In 2012, Parliament passed the Protection of Freedoms Act. This Act placed a requirement on all departments to consider their powers of entry and decide whether they were still necessary, and, if so, whether any additional safeguards could be put in place to protect the public from unnecessary intrusion.
- With this in mind, the Government are proposing an additional safeguard. This will mean that an inspector will be required to apply for a judicial warrant where they are refused, or expect to be refused, access to premises, or where they cannot contact the occupier. Although the CMS cannot use its current powers of entry to access a wholly private dwelling, it is my belief that this small change would give reassurance to the public that judicial consideration has been given when inspectors request access to dwellings to request information. We estimate that around 20 judicial warrants will be sought by the CMS each year. The occupiers of these premises will retain all the usual rights of appeal available via either the magistrates’ court in England and Wales, or the sheriff court in Scotland.
- The next proposed change that I will explain covers improvements to how we gather information. Where there is a need to trace a parent, to decide on the best enforcement power to use or to calculate a maintenance liability, mortgage lenders and occupational pension providers can be a valuable source of information. To collect information from such organisations, at present there is a requirement for the CMS to arrange for one of its inspectors to schedule a visit to their premises. This can be time-consuming and intrusive for them and costly for the taxpayer. Repeat visits are often needed as the information is not available on the first. We therefore propose to add mortgage lenders and occupational pension providers to the list of persons required to provide the service with information, in writing, on request.
- I will now move on to outline a technical change to the regulations, concerning the way in which expenses are taken into account within the maintenance calculation. When calculating child maintenance, the CMS aims to produce a reasonable reflection of what is affordable for the paying parent. Usually, this figure is drawn from the taxable income provided by HMRC. Currently, the income figure given to the Child Maintenance Service by HMRC is supplied after any deductions for pension contributions are made, but before any deductions for non-taxable allowable expenses are made. This means that parents need to notify the service directly to get these non-taxable expenses deducted from their income figure. I am proposing this change to make it clear in law that the income figure that is used to calculate maintenance must be used after deductions for allowable expenses have been made.
- In 2014, the CMS introduced collection fees for cases where parents could not agree the transfer of maintenance payments between themselves. These are aimed at incentivising collaboration, and can accrue alongside ongoing maintenance. As with the maintenance liability, they can also accumulate when left unpaid. Collection of these outstanding collection fees can be enforced as if they were unpaid child maintenance. When a parent does not pay their child maintenance liability, and the CMS is unable to collect the debt using its administrative powers, the CMS can apply to court for a liability order.
- During a recent liability order application in a Scottish court, the way the sheriff interpreted the regulations meant that the liability order was granted, but did not include the collection fees. In this interpretation, fees would be included in the liability order only where some maintenance payment had previously been made, but would not be included where no maintenance had ever been paid. This creates a clear incentive for greater non-compliance, and is not in line with the intention of the policy. As such, I am proposing a change aimed at clarifying the policy intent. This change will provide the courts with a clear direction on fees when a liability order is sought. In addition, this will support the use of collection fees, helping to incentivise parents to work together where possible.
- These regulations are designed to build on the continuing success of the child maintenance reforms. They improve collection measures and information-gathering powers further, and help to make child maintenance fairer for all separated parents. In short, these amendments to the regulations ensure that the commitments in the compliance and arrears strategy are fully realised. I commend this instrument to the House.
- My Lords, clearly, we are in favour of all measures to ensure that children are getting the financial support they need. A large part of this is making sure that both parents contribute to the raising of a child, through official child support or otherwise. According to the charity Gingerbread, child maintenance alone lifts a fifth of low-income single parents out of poverty. Where parents are unequal in income, as is often the case after a separation, it is right that suitable payments for child maintenance are made. It is good to hear of the proposed changes to the Child Maintenance Service scheme, which has been a long, infamous project, causing disastrous circumstances for children and families and costing a great deal in time and resources for all involved, including the Government.Although we are generally wary of giving powers of enforcement, we are in favour of the proposed changes to inspection. Requesting information from mortgage lenders will cut down on the number and intrusiveness of current inspections. It is important that both parents support their children; the cost of bringing up a child is considerable and generally falls on the mother, who is more likely to be in low-paid, insecure employment. Some 90% of single parents are women, and they are twice as likely to be in poverty as any other group.However, in recognising and enforcing payments for child support, the Government need to recognise and act on the issues that drive child poverty. For example, the two-child limit, which restricts support to a family’s first two children, is one of the key factors of child poverty, as demonstrated by many recent reports. The benefit cap also hurts families and households with multiple children, or those who live in expensive areas.I draw the Minister’s attention to the report published last week, All Kids Count: The Impact of the Two-Child Limit After Two Years, produced jointly by the Church of England and the Child Poverty Action Group. This presents detailed and disturbing evidence of this policy’s impact after two years. It is based on interviews with more than 430 families. I urge the Minister and all Members of your Lordships’ House to give the report careful consideration, and the Government to take action on its findings.
- My Lords, I have just two quick questions. First, where the recipient who is due to make a payment is subject to a benefit sanction, what impact does that have on the amounts that are collectable, as proposed in this order? Secondly, the £8.40 can be an amalgam of the collection fee and the maintenance payment. So far as the government accounts are concerned, how is that split and dealt with?
- My Lords, I thank the Minister for her explanation of these regulations, and all noble Lords who have spoken, particularly my noble friend Lord McKenzie; he always comes up with questions I would never have thought to ask, and they are always excellent. I hope that the Minister thought further ahead than I did—although I see someone running to the Box so perhaps not.I very much agree with the points made about child poverty and the role that child support plays in helping to provide a platform on which single parents can build an income that helps lift their children out of poverty. So we do not oppose these regulations. It is important, wherever possible, that both parents should contribute towards the cost of raising a child after a break-up. An adult may leave their partner but they do not get to leave responsibility for their children.I accept that the regulations are designed to provide a series of changes and clarifications to make it easier to collect arrears and maintenance payments under the Child Maintenance Service scheme. I will concentrate on a few specific points: the proposal to allow deductions for child maintenance to be made from universal credit where a non-resident parent has earnings and meets the criteria to be eligible for the flat rate; the increase in the amount, plus collection charges, that can go towards paying arrears; extending the scope; and the enforcement points.The proposal to allow deductions of £8.40 from benefits for arrears in cases where the non-resident parent is no longer paying ongoing maintenance seems sensible. I can understand that for someone on a low income, £8.40 is a lot of money, but it is entirely possible that the single parent on a low income could also be on benefits, and both parents may well have suffered from the cut in living standards brought about by the benefits freeze and the other cuts in benefits. That seems an element of fairness that has to be addressed.
- 4:30 pm
- The Minister mentioned the Government’s preference for parents making a private arrangement. We have been here before. Mrs Thatcher—as she was then—originally set up the CSA precisely because money was not being paid for children. People were leaving relationships and not paying money for their kids, so it really matters that the system works. Can the Minister tell the House what proportion of separated parents have a functioning child maintenance arrangement in place now, compared with before the reforms the Government brought in? I am worried that making people pay to use the system is going to be a disincentive, and that those who have to pay will struggle to afford it.