Second Standing Committee on Delegated Legislation
Monday 18 December 2000
[Mr. Joe Benton in the Chair]
Draft Child Support (Maintenance Calculations and Special Cases)Regulations 2000
The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): I beg to move,
That the Committee has considered the draft Child Support (Maintenance Calculations and Special Cases) Regulations 2000.
The Chairman: With this it will be convenient to consider the draft Child Support (Maintenance Calculation Procedure) Regulations 2000, the draft Child Support (Collection and Enforcement and Miscellaneous Amendments) Regulations 2000, the draft Child Support (Information, Evidence and Disclosure and Maintenance Arrangements and Jurisdiction) (Amendment) Regulations 2000 and the draft Child Support (Variations) Regulations 2000.
Angela Eagle: The Government believe that all children are entitled to the financial and emotional support of both parents. Parents are responsible for providing that support, whether they live together or apart. That fundamental principle has commanded all-party support in the House since well before the existing child support scheme was set up in 1993. However, the existing scheme has failed taxpayers, parents and the children whom it was set up to help. Far too many non-resident parents are evading their responsibilities to their children, and far too many parents with care are struggling to bring up families on low incomes. All too often, the complex and confusing rules of the child support scheme leave parents angry and baffled and, thus, worsen the effects of family breakdown.
The Government have made a commitment to end child poverty in a generation, and making sure that children receive all the support to which they are entitled to from both parents will go a long way towards fulfilling that commitment. Simplifying the child support roles and making the system more transparent is an essential step towards that goal. The Child Support, Pensions and Social Security Act 2000, which received Royal Assent in July, sets out the principles on which the reformed child support scheme is based. The regulations that we shall discuss today set out much of the detailed framework of the reformed scheme.
The Child Support (Maintenance Calculations and Special Cases) Regulations specify in detail the child support rates and the rules for calculating income. The Child Support (Maintenance Calculation Procedure) Regulations provide for the handling of applications for maintenance, the date when liability begins and the rules relating to parents with care who are on benefit. The Child Support (Collection and Enforcement and Miscellaneous Amendments) Regulations extend the methods for collecting maintenance, voluntary payments and past interest and fees. They provide for the withdrawal of driving licences, as an alternative to prison, for failure to pay child support maintenance, and for the imposition of financial penalties.
The Child Support (Information, Evidence and Disclosure and Maintenance Arrangements and Jurisdiction) (Amendment) Regulations extend the Child Support Agency's access to information, provide for notification of criminal offences and set out the extended jurisdiction to collect child support from certain groups of non-resident parents living abroad. The Child Support (Variations) Regulations provide for the variation of child support rates to reflect exceptional circumstances.
We went over much of the ground covered by the regulations when we debated the Child Support, Pensions and Social Security Bill before it was enacted earlier this year. However, inevitably, the regulations are detailed, so I shall take a few minutes to explain them.
The calculation regulations lay down detailed rules for the calculation of maintenance. Those who served on the Committee that considered the Bill will remember that there are four rates of maintenance to cover the particular incomes and circumstances of non-resident parents. The basic rate applies to non-resident parents whose net income is £200 a week or more. Members of the Committee will remember that the rate is based on straightforward percentages of net income: 15 per cent. for one child, 20 per cent. for two children and 25 per cent. for three or more children. The reduced rate applies to non-resident parents with a net weekly income of between £100 and £200. They will pay a lower percentage of income than the basic rate, but it will rise proportionately as net income increases. As income approaches £200, the percentage becomes progressively closer to the basic rate.
A flat rate of £5 will apply to non-resident parents with incomes of less than £100 a week. Non-resident parents in receipt of most state benefits, pensions and allowances, including income support, jobseeker's allowance and incapacity benefit, will also have a flat late liability. A nil rate will apply to some non-resident parents, including those with incomes of less than £5 a week, prisoners, students, children, young people on income support and certain people in hospitals and residential care homes. The new scheme will make more generous adjustments to maintenance when the child's care is shared between parents. We want to encourage non-resident parents to provide practical as well as financial support when appropriate. If they care for their child for a single night each week, that contribution will be recognised in the calculation. The new scheme also provides for a much simpler definition of income, which ignores some types of income that are currently taken into account.
The procedure regulations set out the detailed rules concerning applications for child support and a date from which liability begins. They cover the provision to reduce the benefit of parents with care who ask to opt out of the child support scheme and set the time limit for explaining their reasons. It is easier to understand the new simpler scheme, and we believe that four weekstwo weeks shorter than the current limitis reasonable time to allow for a response before a reduced benefit direction is considered. Of course some parents with care have good reason for asking to opt out, and we will continue to consider each case carefully before reducing benefit. However, if we accept, as do most hon. Members, that parents have the main responsibility for supporting their children when they are able, we cannot permit some parents to choose to pass on that responsibility to the taxpayer without sanction.
When a non-resident parent refuses to supply sufficient information for maintenance to be calculated, and the agency is unable to obtain that information from other sources, the agency will set a default rate. The rate is based on the number of qualifying children and assumes an average income. The default rate enables liability to be set quickly, and is not intended to be punitivethe criminal sanctions for failing to provide information make that unnecessary. We do not intend to apply default rates to non-resident parents who have genuine difficulties in supplying sufficient information, but only to those who choose not to do so.
The Government want to make it as easy as possible for non-resident parents to pay maintenance promptly. It is important that parents with care receive maintenance payments regularly and on time. When non-resident parents fail to do that, the collection and enforcement regulations will allow the agency to consider imposing a discretionary financial penalty.
We have no intention of penalising responsible non-resident parents who have good reason for failing to make a particular payment promptly. However, some non-resident parents, without justification, persistently create for the agency considerable extra work of pursuing late or missed payments. It is right that a financial penalty should be imposed on those who deliberately avoid paying on time.
Mr. Steve Webb (Northavon): The collection and enforcement regulations deal with driving licences. Will the Minister briefly address the concern, which I am sure she has heard before, that taking people's driving licences away might make them less rather than more likely to pay their child maintenance?
Angela Eagle: Had the hon. Gentleman joined us during our deliberations on the Child Support, Pensions and Social Security Bill, he would know that we had long and detailed discussions on that issue. The sanction is to be used at the discretion of the court in lieu of commitment to prison, which happens currently in similar circumstances. I suspect that the losing of a driving licence is probably slightly less draconian that a commitment to jail. Clearly, it is up to the court to decide, in certain circumstances, whether such an eventuality should be taken into account. I do not accept the hon. Gentleman's view, which is why we included the provision in the new Act.
The information regulations amend regulations on who is required to supply information to the agency, and the purpose for which that information is needed. They also cover which information may or may not be disclosed to the courts and other persons. The agency will be able to ask a wider range of people and organisations for information, which will assist in making or enforcing an assessment. The regulations also extend the agency's jurisdiction to certain non-resident parents living abroad by defining the employment to which the new jurisdiction applies.
The new scheme will allow for the maintenance calculation to be varied to reflect exceptional circumstances, as set out in the variations regulations. Parents with care will be able to apply for a variation when the non-resident parent has substantial resources not accounted for in the calculation. Non-resident parents can apply if they have certain extra child-related expenses to meet.
I know that some hon. Members will be disappointed that the circumstances in which variations apply are not more widely drawn. I remind them of two points. First, one serious shortcoming of the old scheme was that it tried to take into account too much information in the assessment, making it so complex, long and drawn out that, in many cases, its application was not possible. There is little point in introducing a simplified calculation if it is rendered ineffective by endless possibilities for variation. Secondly, parents who live with their children tend to meet their children's needs first, before incurring other expenses. The regulations are intended simply to ensure that non-resident parents also do that.
In general, the regulations will come into effect for different types of cases when the relevant section or sections of the Act are brought into effect. That unusual approach is needed because, as hon. Members are aware, we are planning a phased introduction of the reforms. We are determined to ensure that the new scheme will operate effectively. The relevant sections will be commenced first for new cases, and at a later date for existing cases once we are sure that the new systems are working properly.