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Lord Higgins moved Amendment No. 7:

("(3) Where the shared care ceases, amendments to maintenance shall be backdated to the date of cessation of shared care.").

The noble Lord said: My Lords, Amendment No. 7 is one of the more simple amendments, certainly in relation to the wording. It suggests that, on occasion, the arrangements for maintaining the child are shared and that, in some cases, shared care ceases. It is important to be able to specify the date when that change comes into effect because, generally, it has repercussions on the financial arrangements between the parties involved.

We feel that the appropriate moment is the date when the cessation of shared care takes place. I hope that this amendment is not controversial in the general atmosphere of goodwill generated by the Minister's previous reply. I hope therefore that she is able to accept the amendment. I beg to move.

Lord Renton: My Lords, I support my noble friend on this amendment. I hope that the Minister will welcome it. It dovetails completely with what appears to be the Government's intention as stated in the Bill.

Baroness Hollis of Heigham: My Lords, Amendment No. 7 relates to cases where the non-resident parent has a nil rate of liability because he is receiving a social security benefit and shares the care of the child.

As noble Lords will know--we have repeated this to the level of boredom--we want to encourage parents to share the care of the child and intend to introduce provisions to support that. I shall not trouble your Lordships by going through the details again. Briefly, instead of an abatement of maintenance occurring after 104 nights of care a year, it will now kick in after 52 nights a year, thus being every other weekend and thus encouraging that support.

That is the general principle. We are saying that non-resident parents who receive social security benefits will have a nil liability where they have any element of shared care. In the interests of the children we feel it right that in those circumstances shared care should lead to the removal of maintenance liability.

Perhaps I can remind your Lordships that a non-resident parent on a benefit such as JSA would normally pay £5 in contribution to child maintenance which, under our scheme, would go to the parent with care. We believe that to be a reasonable abatement if he is sharing care of the child for part of the week. Where the shared care arrangement ceases and the NRP is on benefit, instead of flat rate liability becoming due from the date when the agency is notified of the change, the revised liability will be back-dated to the time that shared care ceased; in other words, it is a timing amendment.

We want to make sure that maintenance due becomes maintenance paid. This means that maintenance levels should be stable and predictable and that we do not needlessly create maintenance debt.

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As now, we intend that the agency should conduct periodic case checks to ensure that the maintenance calculation is based on up-to-date information. Those case checks should happen on average every two years, although we expect the agency to check more frequently if benefit is being paid for the children and the facts of the case appear likely to change quickly.

No change will normally be made to the maintenance calculation between case checks unless the parents report a substantial change in the facts on which the calculation is based. In those circumstances, the new maintenance calculation will normally take effect from the date when the change is reported. That means both that parents continue to be clear about how much maintenance is due and that the new liability does not carry with it substantial debt for past periods. In that way we can support our key aim of maintaining compliance with maintenance responsibilities.

Since the effect of other changes will not normally be backdated in the new scheme, we can see no case for making special provision for changes in shared care, which is what the amendment asks us to do. Such an exception would add administrative complexity and is hardly necessary as the ending of shared care arrangements in particular would normally be reported straightaway by the parent with care. Obviously she has a financial interest in reporting the change because she would then receive the £5.

Our view is that we have struck the right balance on shared care and, with that explanation, I hope the noble Lord will withdraw his amendment.

4.15 p.m.

Lord Higgins: My Lords, it is perhaps rather typical of debates on this Bill that one tables a nice simple amendment and receives an unbelievably complicated reply.

I gather that the Minister is not proposing to accept the amendment. That much is clear. I partially understand her reasons for not doing so, not least because, apparently, the situation is only appraised every so often rather than continuously in relation to the shared care arrangements.

I wish to study exactly what the Minister said--as I am sure do other noble Lords--and if necessary return to the matter at Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Higgins moved Amendment No. 8:

    Page 100, line 32, at end insert--

("(3) The regulations shall in any event provide that the net weekly income of the non-resident parent shall be reduced in the circumstances mentioned in sub-paragraph (4) and by the method mentioned in sub-paragraph (5), but subject to the limit mentioned in sub-paragraph (6).
(4) The circumstances referred to in sub-paragraph (3) are where the parent with care has a gross annual income from all sources for the most recently completed financial year of more than £25,000.

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(5) The method referred to in sub-paragraph (3) is that for every pound by which the gross annual income of the parent with care exceeds £25,000 the net weekly income of the non-resident parent shall be reduced by one penny.
(6) The limit referred to in sub-paragraph (3) is that the net weekly income of the non-resident parent shall not be reduced by more than 50 per cent.
(7) The regulations shall in any event provide that net weekly income shall include both earned and unearned income.").

The noble Lord said: My Lords, Amendment No. 8 is concerned with the income of the parent with care. This is clearly an important amendment. In our view, it is unreasonable, in the circumstances described in the Bill, for the income of the parent with care not to be taken into account. It is quite possible, and perhaps not unusual, for the income of the parent with care to be significantly in excess of that of the absent parent. Therefore, in deciding how much of the absent parent's income should be allocated to the maintenance of the child, the income of the parent with care should be taken into account.

It is absurd, if the income of the parent with care averages around £200,000, that the absent parent on a very low income should continue to pay a significant amount to the parent with care without any adjustment. We are not suggesting that he should not pay anything. But allowance should be made for the income of the parent with care.

In the other place there was a great deal of discussion on the situation in Australia and so forth. But the argument is fairly straightforward. As your Lordships will see from Amendment No. 8, we put specific figures into the provision and suggest that the circumstances where we envisage this kind of situation developing are where the parent with care has a gross annual income from all sources for the most recently completed financial year of more than £25,000, and then we add a tapering arrangement. We are going back almost to the point of the noble Lord, Lord Northbourne, that it is a question of overall equality of the contribution made by each of the parents. We feel that that situation would not be achieved if no account at all were to be taken of the income of the parent with care, which is the situation at the moment in the Bill.

I gather from what the noble Earl, Lord Russell, said earlier that he is of a similar view to my own and I look forward to hearing what he has to say. I beg to move.

Earl Russell: My Lords, I shall not detain the House long. We are prepared to offer our support for this amendment. We did not find the Minister's arguments against it in Committee entirely convincing. We understand the principle that care is to be set against contribution. That has not at any stage been disputed. However, where there is gross inequality of wealth, which neither the Minister nor I view with any great degree of favour, the inequality may be so great that the care is not sufficient to be set in the scale against it.

These are the only circumstances to which the amendment as drafted were intended to apply. It is a very modest amendment. It is designed to deal with a

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principle which is big in theory but applies to only a small number of cases. We also think that acceptance of the principle is probably vital to consent being accorded the legislation outside, which I imagine the Minister wishes to see. If the noble Lord, Lord Higgins, wants to take the matter further, we will support him.

Baroness Gale: My Lords, this amendment argues the case that if the income of the parent with care, who in most cases will be the mother, is more than £25,000--only a small number of women would come into that category--the absent parent should pay a lower amount towards the maintenance of the child. It would be extremely unusual to have a situation in which the father earned less than the mother.

It has been argued that surely the needs of the child must be paramount and that the child should share in the wealth of both parents. However, the child would be penalised, and it is the child about whom we should be caring, rather than the absent parent. It is said that because the mother happens to be earning a large amount, then the absent parent should pay less. That means that the absent parent would be a beneficiary and the child would lose.

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