DETAILS OF THE DELEGATED POWERS BY CLAUSE|
PART I - CHILD SUPPORT
Clause 18 - Financial penalties
103. Clause 18 substitutes section 41A of the
1991 Act. The new section replaces the existing provision for
additional sums to be paid with provision for a late payment penalty.
A new financial penalty may be provided for in regulations under
section 41A(1). This will be discretionary and up to 25 per cent
of the amount owing for the relevant week. The intention is that
these regulations will set out in detail the way in which the
penalties are to be calculated. Regulations under section 41A(4)
enable provision to be made about the time of payment and the
ability for the Secretary of State to waive payment. These are
matters of administrative detail that may need refining once the
scheme is in operation and are more appropriate to be set out
in secondary legislation. For example, we will need definitions
of what or what does not constitutes a late payment and the process
that should be gone through before imposing a penalty or waiving
a penalty. In view of the punitive nature of this provision, these
regulations will follow the affirmative procedure.
Clause 19 - Reduced Benefit Direction
104. Clause 19 replaces section 46 of the Child
Support Act 1991. In the new child support scheme, a parent with
care who claims benefit may be treated under section 6 as having
made an application for child support. However, she has the right
to opt-out. Section 46, as replaced by clause 19, provides for
a benefit penalty, to be known as a "reduced benefit direction",
to apply to a parent with care who, without good cause, opts out
of child support, refuses to provide information or refuses a
DNA test. This section contains five delegated powers, all of
which require the affirmative procedure.
105. Subsection (1) sets out who this clause
applies to and when. Subsection (2) enables the Secretary of State
to require the parent with care to provide reasons why she has
"good cause". This must be done within a specified period.
A power to specify the period exists under the current scheme
and is being carried forward. In the new section 46 the power
is in subsection (10). The White Paper "A new contract for
welfare: Children's Rights and Parents' Responsibilities"
(Cm 4349) set out the Department's intentions in relation to this
period, stating that it should be four weeks. This is a reduction
from the current scheme where the parent with care has six weeks.
Placing the 4-week period in regulations will provide flexibility,
if, once the scheme is being operated, it is found that this period
is too long or too short for some or all cases.
106. The Secretary of State must then consider
"good cause" - that is, whether there are reasonable
grounds for believing that there is a risk of the parent with
care or her children suffering undue harm or distress as a result
of recovering child maintenance. Under subsection (5), if he decides
that there is no "good cause" he will make a reduced
benefit decision in relation to the parent with care, except in
prescribed circumstances. This carries forward a power that is
presently in regulations. Currently, where the parent with care
has either the disabled child, higher pensioner or severe disability
premiums a reduced benefit direction will not be made. The Department
intends to have the same exemptions in the new scheme, but prefers
to retain the flexibility of prescribing the circumstances in
regulations in case further categories need to be added.
107. Where the Secretary of State considers that
the parent with care does have "good cause" no further
action is taken on the case. However, the case will be reviewed
from time to time using the power in subsection (6). In such cases,
the Secretary of State will write to the parent with care to see
whether her circumstances have changed. She will be required to
reply within a period to be set out in regulations. The intention
is that this period will be linked to the prescribed period set
out above and the intention is that it will also be four weeks.
As the two periods are intended to be similar both should have
the same flexibility should a change be needed rather than being
on the face of the Bill.
Clause 20(1) - Voluntary payments
108. Liability to pay child support usually begins
on the day that the non-resident parent is contacted about the
application for a maintenance calculation. However, there will
be some delay between this date and the date that a maintenance
calculation is completed. This means that arrears of maintenance
build up before parents know how much they should be paying. Voluntary
payments made during this period can reduce this debt and provide
financial support for the children while child maintenance is
being worked out.
109. However, at present voluntary payments are
not defined and have no statutory status. The CSA follows guidelines
in determining if payments can be set-off against arrears of maintenance.
The Department considers that the use of discretion is not providing
sufficient reassurance to parents that all cases are being treated
in the same way. This in turn provides a disincentive for non-resident
parents to make payments before the maintenance calculation is
completed. The Department therefore proposes to give statutory
recognition to voluntary payments.
110. Clause 20 inserts a new subsection into
section 28J of the 1991 Act about voluntary payments. Subsection
28J(3) provides the Secretary of State with two regulation-making
powers. These provide the Secretary of State with the power to
define in regulations the circumstances in which and the extent
to which voluntary payments may be off-set against any arrears
of child support maintenance which have built up since the maintenance
calculation application was made or treated as made. Regulations
may also provide the rules for adjusting the amount of maintenance
payable to take into account the voluntary payment. The intention
is that when the Agency contacts the non-resident parent by telephone
they will be able to discuss his net income and other details
to allow them to suggest a suitable level of voluntary payments.
111. Subsection 28J(5) provides the Secretary
of State with the power to define what counts as a voluntary payment.
The power provides for regulations to specify which payments are
and which are not to be treated as a voluntary payment. This will
relate to all payments whether they are paid to the parent with
care or another person. It is intended that as well as cash payments,
any payments that are made for food, shelter and warmth will normally
be taken into account. For example, food or heating bills or mortgage
payments. However, where the non-resident parent spends money
on other items for the child such as trainers or outings, these
will not be taken into account. The power also allows the Secretary
of State to specify the extent and the circumstances in which
these payments can be taken into account once it is accepted that
the payment can be counted as a voluntary payment.
Clause 21 - Recovery by deduction from benefit
112. Clause 21 substitutes section 43 of the
1991 Act and enables the recovery of maintenance and arrears by
deduction from benefit. Currently, a contribution to maintenance
and arrears is payable by non-resident parents receiving Income
Support and income-based Jobseeker's Allowance unless they are
exempt. The amount is deducted from benefit.
113. Most non-resident parents in receipt of
social security benefits, pensions and allowances including income-related
benefits and war pensions will be liable to pay the flat rate
of maintenance (normally £5).
114. Subsection (1) provides the conditions that
must be met to enable the deduction from benefit to be made. Subsection
(1)(b) provides the power to prescribe additional conditions that
may have to be satisfied before a deduction can be made. We intend
to prescribe that non-resident parents in receipt of Income Support
will only be liable to pay the flat rate if they are aged 18 or
over. Regulations under this provision will follow the affirmative
115. Subsection (2) makes it clear that regulations
made under section 5(1)(p) of the Social Security Administration
Act 1992 may be used to secure the recovery of child support by
deductions from benefits to which that section applies. Subsection
(3) extends the coverage of that provision for this purpose to
cover War Pensions.
Clause 22(3) - Jurisdiction
116. Clause 22 amends section 44 of the 1991
Act, relating to jurisdiction of the Child Support Agency (CSA).
Currently, the CSA has no power to assess and collect child maintenance
if a non-resident parent is not considered to be habitually resident
in the UK. Section 44 is being amended so that if a person works
for a UK based employer but is based abroad, child maintenance
can be calculated and collected. Employers that will be covered
are set out in subsection (2A) and are bodies such as the civil
service, armed forces or diplomatic service. This section also
provides the Secretary of State with the power to prescribe particular
registered companies or bodies. For example, it is intended that
the registered company would be one in relation to which the CSA
could enforce maintenance liability using a deduction from earnings
order. To the bodies referred to on the face of the Bill are intended
to be added bodies of a similar nature, such as NHS trusts or
local authorities, if it appears that they have employees abroad.
A regulation-making power, which will follow the affirmative procedure
will allow other bodies to be added as necessary.
Clause 26: Schedule 3 - Amendment of enactments
relating to Child Support
117. Schedule 3, introduced by clause 26 makes
minor amendments to the Child Support Acts 1991 and 1995. Paragraph
11 amends the 1991 Act and a number of other Acts.
118. Paragraph 11 sub-paragraph (4) amends section
7 of the 1991 Act that refers to the right of a child in Scotland
to apply for an assessment. Subsection (b) of this sub-paragraph
alters the restrictions, through regulations, that apply before
a qualifying child in Scotland may make an application. This regulation-making
power mirrors that in the new subsection 4(10)(a) inserted by
119. Sub-paragraph (15) of paragraph 11 amends
section 30 and relates to the collection and enforcement of forms
of maintenance other than child support maintenance. This amendment
clarifies the wording of an existing regulation-making power that
provides for the collection of maintenance other than child support.
The existing provision has not been commenced because the CSA
has not been in a position to take on this extra work. In future,
however, this may change.
120. Sub-paragraph (16) amends section 32 and
relates to cases where deductions of maintenance are to be made
direct from the non-resident parent's earnings. This provision
allows regulations to ensure that the non-resident parent will
always retain a set percentage of his earnings after a deduction
has been made. It is right that this should feature in regulations
as it allows us the flexibility to amend the percentage if experience
shows us that it is necessary.
121. Sub-paragraph (18) amends section 51 of
the 1991 Act to provide the Secretary of State with the power
to make, by regulations, provisions for the procedure to be followed
with respect to the making of a maintenance calculation and decisions
to revise or supersede maintenance assessments. This clarifies
the existing regulation-making power.
122. Sub-paragraph (19) amend section 54 as regards
to definitions. Subsection (d) of sub-paragraph (19) amends the
definition of "maintenance assessment", allowing regulations
to prescribe cases where default maintenance decisions and interim
maintenance decisions are not included in this definition. This
provision replicates an existing delegated power relating to interim
Clause 27 - Temporary compensation payment scheme
123. In recognition of the significant backlogs
that developed in the early years of the CSA a scheme was introduced
which allowed the Agency to agree not to enforce more than six
months worth of arrears, providing the non-resident parent met
his responsibilities for a year. After a year, the Agency makes
payments to the parent with care in lieu of those she would have
received had he paid in full. This Bill provides a statutory framework
for such payments, including a range of delegated powers to provide
the detailed operation of the scheme, all of which will follow
the affirmative procedure.
124. Many features of the temporary compensation
scheme are placed on the face of the Bill. It relates to delays
under the current, not the new, scheme. However, much of the operational
detail is considered more appropriate for regulations. Subsection
(1)(a) allows the Secretary of State to prescribe the date before
which a maintenance assessment must be made to qualify for the
compensation scheme. It is intended that the assessment will have
to have been made before the last date for making an agreement
set out in subsection (5). However, since the delegated power
in subsection (9) allows for this date to be changed, regulations
may be required to change the final date for assessments as well.
These regulations will be made by affirmative procedure.
125. Subsection (2) provides the Secretary of
State with the power to apply the provisions of this clause to
different types of arrears to those outlined in subsection (1)
of this clause, and also, to not apply the provisions of this
clause in those cases outlined in subsection (1). This will allow
the Secretary of State to extend the compensation scheme to other
categories of debt, should this prove necessary and to remove
categories should deferred debt arrangements no longer be appropriate.
126. Subsection (3) provides for regulations
which specify the conditions under which the Secretary of State
will agree to allow the non-resident parent to pay less than the
whole arrears and situations where he will choose not to pursue
any arrears. This is intended to apply to cases where there has
been a period of delay before the notification of the initial
or revised assessment as well as cases where reviews have set
the subsequent assessment higher than the previous assessment.
127. Subsection (4) provides the Secretary of
State with the power to set the terms of agreements under which
the compensation scheme will apply.
Clause 28 - Pilot Schemes
128. This clause provides the power for pilot
schemes to be set up. It will provide, by regulations, for the
Secretary of State to set up schemes to pilot elements of the
child support provisions. This will enable the Agency to test
discrete elements of the new scheme on a smaller scale before
introducing them nation-wide or test operational provisions for
limited periods of time and in limited geographical areas to establish
the best way of delivering detailed aspects of the reform.
129. While this clause does not contain any delegated
powers, it modifies the operation of the regulation-making powers
elsewhere in Part I of this Bill to allow such regulations to
have effect for a specified period of up to 12 months. Regulations
so made will be known as a pilot scheme and may have limited effect
by reference to locality, classes of person or specified criteria
(subsection (3)). Because pilot schemes will be a novel use of
regulation-making powers, regulations which give effect to such
a scheme will follow the affirmative procedure.
130. The Department has taken this power so that
as the details of the new scheme develop changes can, if desirable,
be piloted - although there are no specific plans to do so.
Clause 29 - Interpretation, transitional provisions,
131. Clause 29 introduces the ability to make
regulations to allow the smooth introduction of the new scheme.
Subsection (2) provides the Secretary of State with the power
to provide in regulations for transitional provisions.
132. As spelt out in the White Paper, the Department
intends that the new scheme will deal with new applications first.
Existing cases will be transferred at a later date when the scheme
is seen to be working properly. For existing cases, the new rates
will be phased in over time. Transitional provisions will be needed
to govern the conversion of cases and the phasing of amounts payable.
These provisions need to be in regulations to allow the process
to adapt to different circumstances.
133. As outlined in subsection (3) of this clause,
regulations may in particular allow for transitional provisions
to be introduced to facilitate the conversion of existing cases
and the phasing of new amounts. The application of the rules for
phasing in the new liability will vary from case to case depending
upon the change of liability and the non-resident parents net
income; however, the period is expected to be no more than five
years. Where a non-resident parent has a net income of £100
or less, the change in his child support maintenance liability
will be phased at £2.50 per week each year. Where a non-resident
parent has net income of more than £100 but less than £400
per week, his child support liability will be phased from the
old to the new liability figure at £5.00 per week, and where
a non-resident parent has a net income is £400 or more per
week his child support maintenance liability will be phased to
the new rate at £10.00 per week.
134. The phasing rules will have to be detailed
and the Department believes that they are more suitable for secondary
135. The regulations will preserve the way in
which certain aspects of current liability, such as departures
to reflect property or capital settlements, have been calculated
to ensure that amounts can be carried forward into the new scheme
without the need for full re-examination of the case.
136. The phasing arrangements will create transitional
rates of liability to make the move to the new scheme is as smooth
as possible for both parties. However, to remove the possibility
of parents attempting to avoid these arrangements, for example
by terminating a benefit claim and immediately re-starting it
(which would otherwise allow the parents with care as a "new
applicant" to move straight to the new scheme) this provision
will also be used to make linking rules.
137. Subsection (4) of this clause allows for
regulations made under the provisions of this clause to deal with
specific cases rather than all cases, for instance this provision
will allow us to convert the liability for specific groups early
to the new scheme, such as parents with care with maintenance
already assessed who make a new application for child support
from a different non-resident parent.
138. Subsection (5) of this clause states that
the power to make regulations under this clause is exercisable
by statutory instrument. Subsection (6) states that such statutory
instruments will be subject to annulment by a resolution of either
House of Parliament (the negative procedure).