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Lord Carter: My Lords, I am extremely grateful to the Minister. I have a good deal of confidence about the result of the next election. There will be much the same majorities as the Government have been achieving today. I thank the noble Earl, Lord Russell, for his support. I was struck by the Minister's expression—to jeopardise the smooth introduction of the scheme. We heard that during the proceedings on the 1991 Bill. If there is a problem with a parent having to work out the formula, I remind the House that at Report stage we pointed out that an excellent child support handbook has been produced by the Child Poverty Action Group. It would enable the parents to work out the formula before they went to the agency and they could see whether it was worth while.

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I am extremely grateful to the Minister for saying that 5,000 cases would be involved. That means that the Government are saying that they could use the regulations, that the number of cases involved is small and it would not be a very heavy burden, but in principle they choose not to do so. That is interesting. He hinted—as he said, without commitment—that when everything is working well these cases should be somewhere near the head of the queue. Under a Labour Government they will be at the head of the queue. However, I have not said that we will introduce the regulations to allow this to happen because there might be some public expenditure implications. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 19 to 23 not moved.]

[Amendment No. 24 not moved.]

Clause 23 [Repayment of overpaid child support maintenance]:

Lord Mackay of Ardbrecknish moved Amendment No. 25:

Page 19, line 7, at end insert:
("(6A) For the purposes of this section any payments made by a person under a maintenance assessment which was not validly made shall be treated as overpayments of child support maintenance made by an absent parent.").

The noble Lord said: My Lords, this minor amendment is needed to ensure that the policy intention that all overpayments should come within the scope of the provisions in Clause 23 is achieved, including, in particular, payments of child support maintenance that should not have been paid at all. I regret that it has proved necessary to introduce an amendment at this late stage.

The clause as currently drafted does not include within its provisions overpayments arising from assessments which were not validly made. Invalid assessments can arise in a number of ways. For example, it may be established following a review or appeal that the Child Support Agency had no jurisdiction to make an assessment. Such cases might include those where the absent parent was not habitually resident in the UK, or there was no qualifying child, or there was already a written maintenance agreement made before 5th April 1993. Cases might also arise where the absent parent accepted paternity at the time the assessment was made but subsequently disputed it and was found not to be the father. We do not expect there to be many of these cases but it was always the intention that they should come within the provisions of this clause. Without the amendment absent parents who have overpayments arising from such circumstances could find it difficult to recover those payments. I beg to move.

Lord Carter: My Lords, the noble Lord said that there would be only a small number of such cases. Can he give an indication of the number?

Lord Mackay of Ardbrecknish: My Lords, I am afraid I cannot. I would perhaps be wrong if I guessed at a number. There were very few indeed—very many fewer than the 5,000 I mentioned earlier.

On Question, amendment agreed to.

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Clause 24 [Compensation payments]:

Baroness Hollis of Heigham moved Amendment No. 26:

Page 19, line 27, at end insert:
(""partial compensation" means a weekly amount not lower than any difference between the child maintenance taken into account when the family credit or disability working allowance was calculated and the new child support maintenance assessment;").

The noble Baroness said: My Lords, with this amendment we are revisiting the problem of family credit and the six-month rule. Hardship is caused where maintenance is not received on time, or is reduced in a review, or where the Child Support Agency—the collection agency—has not been competent. Because the family credit of the woman or parent with care has been fixed assuming a level of maintenance which she does not receive, yet, at the same time, her family credit cannot be adjusted for up to six months, she can suffer very real hardship for that period.

None of us has argued that we want to abandon the six-month rule as such but we argued from both the Opposition Benches at the Committee and Report stages that where the CSA was the collection agency it should pay the sum represented by the combined family credit and maintenance it would and should have collected irrespective of whether the maintenance remains unchanged. In other words, it would uncouple the payment to the mother from the collection from the father, just as the CSA now does in cases of income support. There is no difference in principle between the two.

The Government resisted this proposal on one rather simple argument—that there were winners and losers with the six-month rule and tough luck! I am sure that that is infinitely comforting to mothers with small children who will be among the losers; those who have an income which may fall below poverty level. I rather doubt that they will be so comforted by the knowledge that other people have gained. Hence we have brought forward this fallback amendment, which does not go as far as those put forward at Committee and Report stages but is a last effort to give women whose maintenance payments fluctuate at least a modest degree of protection.

It would offer partial compensation. It would ensure that no family credit or DWA claimants end up worse off than they would have done had they been without any CSA assessment. It takes into account the Government's argument that not all family credit or DWA claimants have the full CSA assessment taken into account in the first instance—for example, if the absent parent has not been making the payments before the benefit calculation. What we are suggesting here is that compensation should equal the amount of maintenance taken into account after the £15 maintenance disregard has been applied where that is larger than 50 per cent. of the actual reduction.

This is very much a fallback position but it would at least prevent some women on family credit and women on DWA losing out. We believe that the increased expenditure is insignificant; we do not believe that it

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will be difficult, in this age of information technology and computers, to administer; and, while protecting the six-month rule, it will ensure that where maintenance falls, a woman is not left for up to six months with an income very much below what the Government think she needs to live on. I beg to move.

Earl Russell: My Lords, this is a serious problem. We support the amendment for very much the same reasons as the noble Baroness. I would add only a request that the Minister sends on these debates to those dealing with the replies to the consultation paper on earnings top-up, where some of the same questions may need to be considered.

7 p.m.

Lord Mackay of Ardbrecknish: My Lords, the fact that we are revisiting this matter means that I was not persuasive enough in responding when an identical amendment was set down at an earlier stage in the passage of the Bill.

Baroness Hollis of Heigham: My Lords, the problem was that we were not persuasive enough.

Lord Mackay of Ardbrecknish: My Lords, there we are. As I said, it was a complicated issue. I may even have said at that stage that it might have been easier if we had had overhead projectors or something to show the difficult calculations. But the intention of the amendment is to ensure that parents with care who receive family credit are fully compensated for any reduction in their maintenance arising from changes in child support legislation. I understand the intention behind the noble Baroness's amendment, but the proposal she makes runs into two difficulties.

First, it does not compensate a considerable number of parents who will be compensated by the Government's proposals. Secondly, it is extremely complex and time-consuming to implement, whereas the Government's proposals seek to deliver compensation speedily at the time income is lost and when help is most needed.

There is no simple way in which to identify the "right" amount of compensation where the maintenance assessment reduces for a parent with care on family credit. As I have explained before, the maintenance which is taken into account for family credit is the maintenance actually in payment immediately before the date of the claim. That would be less than the maintenance assessed in many cases where the absent parent was not meeting full liability. In some cases no maintenance will have been taken into account in the family credit award where the maintenance assessment was made later on in the six months' period. A compensation scheme based on the family credit award, as the noble Baroness's would be, does not help parents with care whose maintenance payments began after the award was made, yet their loss of income is real.

The noble Baroness's proposal also does not help parents whose maintenance is below the disregard level of £15. Nothing is taken into account in their family credit and under the noble Baroness's formula, the assistance to them would be zero whereas under our formula they would get some assistance. Our proposals

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aim to sidestep these problems by looking at the maintenance assessment itself and comparing the old and new assessment. That has the added advantage that compensation is quick and easy to deliver.

As I have explained before, our proposal is to compensate at the rate of 50 per cent. of the reduction in the maintenance assessment. That is intended to provide a broad measure of support. To compensate at any higher rate would over compensate the majority of cases because the potential effect of the reduction on the family credit would always be somewhat less than the reduction itself. That is partly for the reasons I have explained about the basis of the family credit award and the £15 disregard, and partly because at least 30 per cent. of all income is effectively disregarded in assessing the benefit.

I accept now, as I accepted before, that our proposal is not perfect. There is not a fully satisfactory way of identifying a compensation figure without enormously intrusive and lengthy inquiries, which would miss the point of compensation for loss to be there when the loss occurs. I very much welcome the noble Baroness's agreement that it is important that we stick to the concept of the six months' period of family credit. In my view, that perhaps remains a more important principle. That is why our proposal, which does not interfere with that, is the right way forward. The proposal we have is likely to be more generous to more people and thus more effective in meeting need than the amendment we now have before us. With that further explanation of the inter-relationship between family credit and any reduction in maintenance during the six months' period, I hope that the noble Baroness will be able to withdraw her amendment.

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