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Earl Russell: My Lords, I am happy to support the amendment to which I put my name. It is a modest amendmentmodest to the point of bashfulnessbut I believe that it is an entirely good amendment. Anyone who has had any dealings with maintenance is familiar with the problem that very often the maintenance does not arrive, is irregular, often incomplete and can stop for long periods. It is always difficult to get any hard information about what is going on.
The CSA was meant to improve the situation. Over the weekend I looked at the study by the Children's Society, Losing Support. It is based on case studies of 65 parents with care. It set out to find out how many of those 65 parents were better off as a result of the intervention of the CSA. The answer was none. Two had assessments which would have improved the position, but the ex-wives said that the assessments were too high and the payments were not coming in. The irregularities, incompetence and inaccuracies are, if anything, greater than they were under the old court system. The arrival of maintenance is extremely undependable.
Under the principles of the Citizen's Charter, if a public service undertakes to deliver a service and it fails to do so, some form of compensation is recognised to be due. If a train does not arrive, the passengers get a refund. In that situation, under exactly those principles, if maintenance does not arrive, the government agency has failed to deliver the service it undertook. So I think that some compensation is due. The amendment is fair
Lord Carter: My Lords, perhaps I may add one point to the excellent opening speech by my noble friend Lady Hollis. The Minister will remember that when we raised the point at Report stage he said at col. 125 of Hansard for 19th June:
I hope that after the Minister has reflected on it, he can help us with the point. As my noble friend said, if the amendment's wording is not exactly targeted in the way that the department would like, if the department accepts the argument about the inefficiencies of the agency resulting in non-collection, it is easiest to accept the amendment and alter it in the other place.
Lord Simon of Glaisdale: My Lords, in going through a sheaf of newspaper cuttings which I had accumulated in order to trace the behaviour of the Child Support Agency, I came across this headline which relates to the speeches which have just been made:
Lord Mackay of Ardbrecknish: My Lords, we discussed this amendment in Committee. Its effect is that a person with care will accrue a weekly bonus regardless of whether maintenance is actually paid. As I said in Committee, the amendment is defective as it stands because it takes no account of those cases where maintenance is paid direct to the parent with care. The bonus system can operate in those circumstances as well as the circumstances where it is paid through the Child Support Agency. The amendment moves to a totally notional system of crediting a bonus which takes no account of whether or not maintenance is paid. I shall come to the specific point on which I have indeed reflected. However, I believe that considered as it stands, the amendment would be an unsatisfactory approach.
The purpose of the child maintenance bonus is to improve work incentives and to give a person with care a direct benefit from the maintenance she receives. A person with care who receives income support or jobseeker's allowance, along with child maintenance, can accrue a credit based on the child maintenance taken into account in the income support or jobseeker's allowance assessment. The lump sum of up to £1,000 would be payable when the person with care leaves benefit to return to work. Like the bonus in the jobseeker's allowance, its purpose is to smooth the transition into work. Another advantage is that it does not reduce the incentive to return to work by narrowing the gap between out-of-work benefit and earnings.
We think that absent parents will also see that the accumulation of a bonus will benefit their children as a result of the maintenance they have paid. The amendment would introduce a notional scheme and remove any incentive for the absent parent to pay maintenance as the person with care would accumulate a bonus, even if he did not pay any maintenance.
Like the noble Baroness, I do not wish to revisit the argument on the more general question of disallowing the £5 of maintenance. However, it is interesting that it was that very incentive which formed the core of the argument in favour of the maintenance disregard by the noble Baroness and the noble Lord. I was not able then to accept that proposition due to the costs and the fact that it would narrow the gap between benefit and work. However, I understood the point made about incentives: incentives to pay concerning the maintenance disregard must be equally relevant when it comes to that bonus.
The introduction of a notional child maintenance bonus scheme would result in a substantial increase in costs. We estimate that a notional scheme would increase the cost of a child maintenance bonus by more than 50 per cent. It is possible that a notional scheme, without any incentive for the absent parent to make maintenance payments, might have a negative effect on the level of compliance resulting in a reduction in the amount of maintenance received by the Child Support Agency.
I have said before and hope that I do not have to say it too many more times today: an absent parent should not expect the taxpayer to support his children. We feel that parents should honour their responsibilities to their children whenever they can afford to do so. The amendment would, I fear, be a step along the road to maintenance guaranteed by the Government, whether it is paid or not. We have consistently opposed that as it undermines the principle that parents should maintain their own children to the extent that they can afford to do so.
The child maintenance bonus is in effect a deferred disregard; that is, it is equivalent to a disregard of maintenance received but with payment being deferred and made in a lump sum on moving into work. The bonus disregards maintenance received. It cannot disregard maintenance which is not received, any more than an earnings disregard can disregard earnings which are not received.
During the discussion in Committee, I explained that our aim is to allocate a bonus accordingly for the period over which payments are made. There was a discussion about the situation where the absent parent paid no maintenance and the parent with care would not accumulate a bonus. We are still considering the detailed rules by which fluctuating amounts of maintenance due and paid are translated into accrual of the bonus. I think I gave an assurance that we intended to ensure that if the absent parent paid rather intermittently but he still paid, then the amount paid would be rolled back over the weeks when he did not pay but ought to have paid. The £5 disregard would then be credited to the parent with care during the necessary number of weeks. Of course, the two would have to balance and it is quite a complicated piece of arithmetic.
Baroness Hollis of Heigham: My Lords, the Minister seems to be saying that it has to balance. I presume he means that over a period of three or six months the total coming in should meet the total that was levied in order for the £5 back-to-work bonus to be rolled up. Is that what the Minister is saying? If not, the basic point is that if there is an irregularity or failure to collect due solely to the CSA, what is the CSA's responsibility for making good the shortfall in the bonus? Why should the mother suffer because the CSA does not do its job?
Lord Mackay of Ardbrecknish: My Lords, I shall come to the second point in a minute concerning non-payment from the CSA. If the absent parent does not pay, it is fundamentally his responsibility. It is the responsibility of the CSA to collect the payment, if it comes through the agency. Without wishing to bring the wrath of the noble Earl down on my neck, the villain of the piece is the absent parent who is not paying and he is the person to whom we should direct our attention.
Perhaps I did not explain the point as well as I might. If the absent parent decides to pay either through the CSA or direct to the parent with care in an intermittent way, he will not be obliged to pay the full amount before the parent receives the £5. As long as he pays £5 or more, the parent will be credited with that £5 bonus. Obviously, if he pays less than £5, as the Bill lays down, the parent with care will be credited with the £4 or £3 which he pays. But he will not have to pay the full amount. Let us say that the full amount is £50 a week, it would not work out at that. If it turned out to be £40, then the parent with care would obviously still receive the bonus. We are examining the details because there are complications which the noble Baroness probably perceives, as I do, about how one decides the period over which the money is to be spread, if the person does not provide sufficient money. We are turning our attention to that because we do not wish the parent with care to suffer. We are keen to see the bonus rolling up in order to help the parent with care back into work when and if she decides to take that step.
We are still considering the detailed rules by which fluctuating amounts of maintenance due and paid are translated into how we accrue the bonus. It may be possible to go some way towards meeting the concerns underlying the comments of the noble Baroness and the noble Lord, Lord Carter. But we do not wish to breach the essential principle that the maintenance bonus is linked to the actual fulfilment of his responsibilities by the absent parent. I believe that none of us would wish the scheme to encourage non-compliance.
I turn to the question put to me today by the noble Baroness, the noble Lord, Lord Carter, and the noble Earl, Lord Russell. It was also put at the Committee stage and the noble Lord, Lord Carter, kindly reminded me that I said that I would reflect on the point. It related to circumstances where maintenance had not been collected solely as a result of lack of action by the Child Support Agency. I considered this particular point
Having reflected on the particular point, namely when problems arise as the fault of the CSA, I can give the noble Baroness an assurance that the procedures that we are currently exploring in order to put them in place will deal with the position where there will be financial loss.
Clearly, the accumulation of the bonus would represent, on the day that the parent with care decided to go into work, a financial loss to her. That is one of the issues that we shall have to address when examining arrangements that we wish to bring into being to deal with compensation. I have tried to be helpful while, I am afraid, having to resist the disconnection of the bonus from any money paid by the parent. I hope that I have shown that we are examining carefully and sympathetically the problem of an absent parent who is intermittent in his payments. The theory works perfectly if the man pays weekly, on time, as he should. The difficulty arises when that breaks down. We are looking at ways in which to deal with the parent who pays in larger sums from time to time and probably after much pressure is brought to bear on him. We are also examining the problem that will occur if lack of collection was the fault of the agency. As I say, we intend to put in place systems that will compensate for faults in the agency when it causes financial problems for the parties concerned, in this case the parent with care. With that explanation, I hope that noble Lords and the noble Baroness will feel that I am genuine in my desire to try to accommodate these particular difficulties. I believe that they are best left to regulations or rulesdare I say?on compensation arrangements rather than primary legislation.
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