draft Child Support (Deduction Orders and Fees) (Amendment and modification) Regulations 2016

Debbie Abrahams Excerpts

Thursday 17th March 2016 General Committees

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

It is nice to see you in the Chair, Ms Ryan.

I thank the Minister for his opening remarks. As he said, the draft regulations propose two changes to the 2012 child maintenance scheme, administered by the Child Maintenance Service: first, to allow collection and enforcement fees to be waived for six months for certain groups transferring to the 2012 scheme; and, secondly, technical changes to the regulation deduction orders and lump sum deduction orders to

“increase operational efficiency by allowing the collection of fees in certain circumstances not already covered by existing regulations”,

as well as enabling arrears accruing in earlier child maintenance schemes to be collected. However, the Government need to address a number of issues relating to the changes, and I would be grateful for the Minister’s response to the following questions.

Parents on the three previous child maintenance schemes are only being invited by the Government to apply to the 2012 scheme; transfer is not automatic. Will the Minister explain why it is not automatic and the administrative implications? I understand what he has said about people not wishing to apply, but I think there are assumptions that have not been fully explored.

What is the progress in transfer to the new scheme for the different segment groups and when is the transition of all live CSA cases expected to be completed? Will the Minister explain why, from the quarter of a million invitations to CSA cases to transfer to the child maintenance service, only 28,800 have been transferred to date?

Whereas there are no collection fees under the legacy schemes, that is not the case with the transfer to the 2012 scheme. In particular, can the Minister explain the Government’s thinking in relation to non-resident parents currently in segment 5—those who are subject to some CSA enforcement action as a result of non-payment of child maintenance? As I understand it, non-resident parents who have in the past not complied will be given a six-month grace period under which they will be able to demonstrate that they will fulfil their obligations by providing the necessary child support for their child or children. That will determine whether they can move on to the direct pay system or the collect and pay system via the Child Maintenance Service, with the associated charges.

For non-resident parents who demonstrate that they have complied during the six-month period, will the Minister clarify what happens to the arrears owed in child maintenance from the legacy schemes? I understand that a system of arrears cleansing is currently under way to ensure that a precise figure of what the non-resident parent has failed to pay in child support can be reached, but why is that taking so long? When will it be completed and why was that not done at the outset, so that non-resident parents’ willingness to pay could be tested for both the new and old child support schemes? Will the agreed arrears be collected by the same enforcement method or, having been found compliant with the new scheme, will the parent be able to transfer to direct pay or collect and pay? What assessment has been undertaken of the likely non-compliance in arrears repayment for the different scenarios, and what does that mean for delays in child support to children?

I understand from Gingerbread that an estimated £700 million in arrears is owed to children. Will the Minister explain why some parents with care are getting letters saying,

“Some clients in a similar position to you tell us that they do not want their child maintenance to be managed by the new organisation and wish to make a fresh start by writing off their arrears”?

I am concerned about that and would appreciate the Minister’s response. It seems to be a pressure in terms of writing off debt.

On deduction from earnings orders, can the Minister explain what enforcement methods will be used during the compliance opportunity for the bit that is being enforced alongside the voluntary partial payments? The Minister in the other place mentioned using DEOs, but in some cases, such as self-employed non-resident parents, a DEO is not appropriate. What other tools will be used for the enforcement part of that payment if a DEO is not appropriate? For example, will deduction orders or freezing orders, or setting aside of disposition orders, be available during the compliance period? Finally, as the Minister in the other place was unable to answer this question—and a number of others, I have to say—I would be grateful if this Minister could explain what powers the second regulation will give the Government that they do not have now and in what circumstances they envisage using them? Will he confirm that all the cases covered by the regulations will still have statutory maintenance arrangements, not voluntary or family-based arrangements?

It is absolutely right that parents who are separated or divorced fulfil their obligations to their children and provide financial support, as well as other support. As the noble Baroness Sherlock said in the other place:

“It is the responsibility of the Government to demonstrate that, in their desire to save money running a child maintenance service, they have not reduced the incentive on non-resident parents to take responsibility for their children, and reduce the incomes of their children as a consequence.”—[Official Report, House of Lords, 14 March 2016; Vol. 769, c. 216.]