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SSSC report & government response

This responds to the Social Security Select Committee's report on the Child Support Reform White Paper, and the Government's response to that report [1][2]. The extracts from the report are the "SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS" at the start. The Government's response here comprises just the specific responses to the SSSC's report, not the preliminary chat.

Section numbers of the SSSC Report are in blue, and section numbers of the government's response to it are red. These numbers and this colour coding is used in the commentary, to make it easier to see what the "Commentary" is referring to.

Social Security Select Committee Report Government response My commentary
The Formula    
1. We recommend the Bill should provide for the Secretary of State to have the power to make regulations subject to parliamentary approval to adjust the standard percentage rates in the formula (paragraph 17). 13. This recommendation follows an examination of the research basis for the rates on which liability will be based under the reformed scheme. As Baroness Hollis of Heigham made clear in her evidence, a substantial volume of research was considered by Ministers and officials in developing the Government's proposals for reform. However, it is important to understand the basis on which the rates have been worked out. The primary consideration has been to arrive at a system of rates that is simple and which is fair to children while not placing an undue burden on non-resident parents.

14. To reach a view on this, the Government considered many factors, in particular:

  • the amount that parents normally spend on their children when they are living with them;
  • the financial effect of divorce and separation on nonresident parents, parents with care and children; and
  • the way that child support is worked out in other countries around the world.

15. Clearly, the cost of children is an important factor in deciding how much financial support a nonresident parent should provide. Research plainly shows that parents who live with their children often have to make significant financial sacrifices and that expenditure on children forms a substantial proportion of family budgets. We wanted the system of rates in the reformed scheme to replicate the financial commitment to his children that a father would make if he were living with them.

16. Equally, research supports the view that, for many nonresident parents, living apart from the children is financially advantageous. The Government is aware of research which shows that, on separation, nonresident parents become roughly 15% better off, while parents with care and their children become 15% worse off. Child support has a role in ensuring that children do not lose out as a result- and that children who would otherwise be in poverty have access to the nonresident parent's income.

17. International comparisons between child support schemes are difficult to make since each country has a different tax and benefit regime- which affects the nonresident parent's ability to pay. However, the 15/20/25% rates in our reformed child support system are broadly consistent with other schemes. For example:

  • in Australia, child support payments represent 18/27/32% of gross income after the nonresident parent's basic living costs have been deducted;
  • in New Zealand, the rates are 18/24/27% of gross income after allowing for living costs;
  • in Wisconsin, the child support rates are based on gross income with no allowance for living expenses. The rates are 17/25/29%- although there is a wide-ranging departure scheme for special expenses;
  • in Europe, the child support rates vary widely- the Netherlands, for example, uses a complex formula similar to our current scheme, while Austria bases liability on a simple percentage slice of gross income for each child- 16%- which increases as the child gets older.

18. For these reasons, the Government believes that the proposed flat rates represent a fair basis on which to work out child support liability for the majority of parents. We do, however, recognise that there will be exceptional circumstances where the nonresident parent's ability to support his children will not be adequately reflected in a liability based on the simple rate. As the Report recognises, the new scheme will include provision for variation of the child support liability where:

  • the nonresident parent has exceptional child-related expenses; or
  • the income used to work out his liability does not reflect the nonresident parents true wealth.

19. We will also allow for the basic rates to be changed in the future by regulations (which will need the approval of Parliament before they come into effect) should this prove necessary.

14. The government largely ignored the way child support worked in other countries, in spite of paying lip service to it. Examples of things ignored include:

child support awarded to the child not the PWC

a fair shared care formula

using all the evidence to decide who pays whom as well as how much they pay

15. However laudable the aim of replicating the commitment in an intact family, they miss the point. Beyond a certain point, the children tend to benefit more from indirect rather than direct expenditure (such as a better house, better car, etc). These cannot be replicated (even approximately) by handing over more and more money - they have to be handled in other ways.

2. We recommend that in the case of any dispute the child support assessment should be made on the basis of the last year's assessment by the Inland Revenue (paragraph 18). 20. The Report acknowledges the extent to which the reforms will simplify the definition of income for child support purposes. The intention has been to focus on all regular sources of income while removing those which rarely provide significant extra resources for children. Wherever possible, we intend that the nonresident parent's income at the point that liability begins should form the basis of the maintenance that he pays: after all it is out of current income that maintenance will have to be paid. In our view, going back to earlier periods tends to increase the possibility for unfairness and disputes.

21. However, the Government accepts that the income on which liability is calculated will inevitably remain a source of dispute and potential manipulation. Our proposals for ensuring that accurate information is supplied for child support purposes (including penalties for providing false information and enhanced powers for child support inspectors), combined with the simpler definitions of income, should reduce the scope for dispute.

22. Nevertheless, there will be cases where it is impossible to get accurate information from the parents concerned. Where the nonresident parent is an employee we intend that the CSA, having failed to get the information from the parent concerned, should seek information direct from the employer. This should settle matters in most cases. For self-employed nonresident parents, there will, however, be circumstances in which the best information available will be the tax return for the last full tax year. In these circumstances, we will use this information, collected from the nonresident parent or, as a last resort, direct from the Inland Revenue.

2. This is the wrong reason for using the Inland Revenue as the source of income amounts. The best reason for using the Inland Revenue is to establish whether the total payment over the year was too much or too little, then adjust it the following year. In other words, a bit like PAYE.

20. This misses the point, and in fact is incorrect. The NRP pays in the future based on what he earned in the past even with the government's scheme - it is just a bit closer to the time (payslips in the months up to calculation time). But nothing corrects this if it wasn't an accurate picture over the year. PAYE isn't concerned with accuracy per month - they simply get it all right in the long run.

This is the key to the way the Inland Revenue works - they simply get the total right over a year or so, rather than trying to get details right initially and failing to get it right over the year, which is the way the CSA works. The Inland Revenue's approach could ensure that an NRP really did pay 15% of net income - the CSA's current & reformed approach never will.

3. Whilst we agree with the view that all nonresident parents should pay something, we are concerned at the effect of the minimum payment of child support on children in 'second' families in receipt of Income Support or income-based Jobseeker's Allowance. We recommend that, before minimum payment is imposed in cases where the nonresident parent has dependent children and is in receipt of Income Support or income-based Jobseeker's Allowance, further research should be carried out on the effect of such a minimum payment on the level of compliance and the well-being of the children in the 'second' family (paragraph 27). 23. The Government understands the Committee's concern to ensure that children living with nonresident parents on income support or income-based jobseeker's allowance should not suffer as a result of the child support reform. However, as the Committee recognises, it is important that all nonresident parents should pay something for the children who are living apart from them. Nonresident parents remain responsible for their children when they are on benefit and there is little logic in the current exemption rules. These rules require the nonresident parents on the lowest levels of benefit- those who are single and in good health- to make a contribution to maintenance while those with higher weekly incomes- the sick, disabled and those with children in their second families- are exempt.

24. Unlike the current arrangements, all children will benefit from maintenance paid for them either directly (if the parent with care is in work) or through the £10 child maintenance premium. The £5 minimum payment from nonresident parents on jobseeker's allowance currently goes to the Treasury. In future, it will go to the parent with care. For this reason, we are convinced that our proposals for minimum payments strike an appropriate balance between protecting children in low income families and ensuring that nonresident parents honour their responsibility to support their children. It will also encourage an expectation of paying maintenance when any nonresident parent on benefit moves into work.

25. The programme of systematic research which has been set up to evaluate the impact of the reforms on CSA clients and their families will collect information about children's welfare, payment levels and compliance. This data will enable us to observe any effect of the reforms on the well-being of second families. However, it is difficult to see how such research could be conducted before the reforms are introduced without delaying the implementation of changes which will benefit many thousands of children. Nonetheless, these proposals will be closely monitored.

23. This misses the point. If the family was still intact and the father was on benefits, he would be getting child allowances in those benefits,and then spending them on the children. But when they separate, he only gets the adult allowance, nothing for the children - benefits are not split when the family splits. So now he is having to spend adult allowance on the child (via child support).

(And, something that a child support scheme probably can't take into account, is that about 10% of a family's expenditure on a child comes from people other than the parents, which probably ceases for this man. He has lost the other sources of help for a child which existed before, yet he still has to pay out).

24. But having said that, 24 makes a good point.

4. We welcome the White Paper proposal to treat step-children in a 'second' family on the same basis as the nonresident parent's own children in the 'second' family.[1] We prefer the alternative approach set out in the Green Paper[2] that maintenance liability should be split equally between all children (paragraph 29). 26. As the evidence given to the Committee shows, the arguments are finely balanced between the two alternative means of working out liability when a nonresident parent has a second family. On the one hand, there is a strong argument, articulated in particular by Families need Fathers for treating all children equally. On the other, there is the 'double dividend' argument expressed by the Family Policy Studies Centre- stepchildren should be supported by maintenance from their own nonresident parent, so to reduce maintenance for the first family in these circumstances is unfair.

27. There were actually two sets of alternatives proposed in the Green Paper- in addition to the way that the rates were worked out, there was the question of whether allowance should be made for stepchildren in the second family. Following consultation, the Government concluded that it would be unfair to treat stepchildren differently from natural children in the second family and that any maintenance received should be totally ignored. But, given this more generous treatment of second families, we remain convinced that the method of adjusting the rates should give a slight preference to children in the first family.

26. No they are not finely balanced! The alternative that the government didn't choose was very bad (it defied cash flow analysis, and the one they did choose is merely poor!

4. See above - the alternative is very bad!

27. Catering for stepchildren like this is one of the bad bits in the formula. If the government really believes that it has a good child support system, it should have the courage of its convictions and let the step children be supported by their own NRP! As it is, children that the NRP isn't legally responsible for reduce the payment that he is legally responsible for! Does the government believe that it is bio-parents who have the responsibility or social parents? It isn't consistent (cf. DNA tests). And in response to the last sentence - there is no demonstrable preference in the formula to children in the first family! (Or vice versa).

5. We recognise that taking account of the income of the parent with care could introduce complexity into the simplified child support scheme. In the interests of fairness, we recommend that the Government should set a significant threshold at well above average male earnings beyond which the earnings of the parent with care may be taken into account in calculating the liability of the nonresident parent (paragraph 36).

6. We are persuaded by the case that the children of wealthier parents should have the right to continue to share in that parental wealth. We therefore do not support the introduction of an upper limit on the automatic application of the revised formula (paragraph 41).

28. As explained at paragraph 14 above, decisions as to the rates used to work out child support liability were based on what it is reasonable to ask a nonresident parent to pay. This was based largely on what parents would expect to pay if they were living with the child or children in question. Unlike the current formula- and some foreign child support systems- the rates are not based on an attempt to allocate the full cost of a child between its parents.

29. Given that the child support rates are based solely on the nonresident parent's responsibility to his children, there is no reason why any additional support that the parent with care can provide should affect maintenance liability. She is making her contribution through the improved standard of living she can offer the child. Further, as in the current scheme, the need to consider a parent with care's income would add complexity in all cases, while actually affecting liability only rarely. And if the parent with care's income is considered, the pressure to include her new partner's income- and the nonresident parent's new partner's income (where there are children in the second family) becomes difficult to resist. Other income and expenses of both families then become an issue and all the complexity of the existing scheme is re-introduced.

30. For this reason, we are convinced that a simple percentage slice of the nonresident parent's income is the best way to protect both parents and children. The Government cannot therefore accept the Committee's recommendation as regards the income of the parent with care, but we are pleased that the Committee accepts the logic of basing liability on a fixed percentage slice at all levels of nonresident parents' income, rather than imposing an arbitrary maximum.

5. The main reason for taking the PWC's income into account is to get a fair calculation for shared care, not just for high earning PWCs which is pretty irrelevant to the argument. In the shared care case, the PWC is the "absent parent" for part of the time, and during that time should be paying the other parent.

28. The government mis-interpreted the research into what parents were expected to pay if they were living with the children!

29. This is just a "slippery slope" argument to divert attention! They should make a real argument if they have one, not bring irrelevant details which were not even mentioned into the argument to justify their view on the details that were mentioned. It would not "add complexity in all cases" - only for shared care cases where the PWC isn't on benefits.

6 and 30. The government has now imposed a maximum! In fact, it is impossible to have a fair & workable way for the children to share in the wealth of the parents via a simple money transfer mechanism, however laudable the aims appear to be.

7. We recommend that the Department of Social Security should commission research jointly with the Department of Health and the Lord Chancellor's Department into the consequences for the well-being of the children of linking child support liability to overnight contact of nonresident parents with their children (paragraph 45).

8. We would expect that in most cases it would be in the best interests of the child for both parents to share their responsibilities for care. We support the White Paper proposals to reduce the nonresident parent's liability in shared care cases (paragraph 48).

31. Both parents have an important role in their children's lives and we want to encourage their involvement with their children even when the family unit is no longer intact. Paying maintenance is an important part of a nonresident parent's ongoing responsibilities to his children but we think it right to encourage the sharing of care between both parents and, for this reason, we are planning to reduce the threshold at which shared care arrangements affect child support liability.

32. Our programme of research evaluating child support reform has been designed to collect information about the impact on children's well-being of these changes to the shared care arrangements. We will consult the Department of Health and the Lord Chancellor's Department on this programme and consider whether any further research is needed.

8 and 31. But it has still managed to screw up the shared care formula to an incredible degree. The only excuse the government have found for this is "not many people will be affected by it". (And the unspoken postfix is "yet").

9. We endorse the view of the Independent Case Examiner that the parameters of the discretion allowed to officials must be specified in Regulations carefully before the legislation comes into effect (paragraph 53). 33. The Government understands the Committee's concern that the exercise of discretion by Child Support Agency officials should be consistent. The majority of decisions in child support legislation are statutory and the use of discretion is generally restricted to those exceptional cases, which require more detailed consideration of individual circumstances. Discretionary decisions are only made after careful consideration of all the facts and staff have written guidance, which helps to ensure consistency. And, the Committee has already noted that more complex issues will be sent straight to a tribunal for determination.

34. Where discretion is to be exercised each case must be considered on its own merits. The rules governing the ability of officials to vary the child support liability in exceptional cases will, as with the current departures system, be set out clearly in legislation.

 
Private Cases    

10. We have reservations about the wisdom of allowing unlimited access to the CSA formula in all cases since the qualities of simplicity and rough justice, which may be necessary and appropriate for dealing with circumstances where the parent with care has had to resort to seeking benefit from the taxpayer, may not cope adequately with more complicated circumstances in which a private arrangement has been reached and where the taxpayer's interests are not involved. We are concerned that the CSA formula may be invoked to overturn settlements agreed to in court. It would be preferable if settlements reached in court paid attention to the CSA formula from the outset. We recommend that a statutory duty should be placed on the courts to take account of the CSA formula as a starting point in deciding child maintenance (paragraph 61).

11. We recommend that the proposed right of access for 'private' non-benefit cases to the CSA after an agreement has been in force for a year should not be brought into force until the Child Support Agency has had time to demonstrate its effectiveness in handling the new formula (paragraph 62).

12. We recommend that further research be carried out into the extent to which the interests of the children concerned would be adversely affected by allowing parties to 'private' agreements to have recourse to the rough justice of the new child support formula, and that the results of that research should be published before Parliament is asked to approve any proposal to allow parties to apply for a CSA assessment to replace a court order or registered agreement (paragraph 63).
35. As the 1991 White Paper Children First 2 made clear, the then Government intended that the child support scheme would be open to all parents and 'Once any individual is eligible to apply to the Agency for assessment or collection and enforcement, then that will become the only body to which she can make application.'. However, it was accepted that the Agency could not begin dealing with all cases at once and priority was given to benefit cases and others without settled maintenance arrangements.

36. Given the difficulty in managing the work that the Agency did take on, it has proved impossible to extend the child support scheme to children who have court orders for maintenance or written maintenance agreements dating back to before April 1993. In these cases, parents must go back to the courts for enforcement of maintenance and for any variations in the amount of maintenance due. This has allowed parents to trade off regular child maintenance as part of a financial package which may include property and capital transfers and spousal maintenance.

37. This is not always in the best interests of the children concerned- who may see the court ordering substantially lower child maintenance payments than the child support formula would allow. Further, it is not always in the best interests of the parents since any agreement in court can be over-ridden by a child support assessment if income support is claimed for the children. The result has been that, in many cases the courts are now trying to set child maintenance at child support rates.

38. Under the new scheme, the Government wants to give all parents access to collection services of the CSA if court based maintenance arrangements are unsatisfactory. And, where the CSA is collecting maintenance, we think it right that child support rates should apply. These rates represent the Government's view as to the level of support that all nonresident parents should provide for their children. They are not a simple 'rough justice' solution intended only for poor parents or those who have to rely on income support but a reflection on what all children should have a right to expect.

39. However, we have no intention of tearing up existing arrangements- so where a court order for child maintenance is made (or, in Scotland, a written agreement is registered) before the reforms are introduced, there will be no access to the CSA except where income support or income based jobseeker's allowance is paid for the children. Court orders made after the reformed scheme will be made in the knowledge that either parent can apply to the CSA for child support. This will ensure that parents, in reaching agreements on child maintenance, give due weight to the child support rates.

40. The Government notes the Committee's preference for requiring the courts to pay attention to the child support rates from the outset but is not convinced that this offers the best solution. Allowing either parent to come to the CSA will help ensure that court orders are settled in the shadow of the CSA rates. Forcing the courts to apply the CSA rates at the outset would result in parallel jurisdictions with the likelihood that any limits on the discretion of the court would be difficult to maintain. Further, parents with care have often experienced difficulty in getting court orders enforced.

38. The way children benefit from the earnings of poor parents is different in nature from the way they benefit from the earnings of wealthy parents. This is not an argument that a wealthy NRP should spend less, it is an argument that a wealthy NRP should be able to spend part of the money on the sort of things that wealthy parents spend part of their money on, instead of letting the higher amounts of money be diverted away from the NRP's children to the PWC, the PWC's new partner (if any), the PWC's new children (if any), etc.

This costs more to administer - and here is a wealthy parent who can afford to pay the extra administration cost! A cheap to administer scheme is not as fair to the children of wealthy parents as a more tailored scheme.

40. Similarly, NRPs have often experienced difficulty in getting court orders enforced (for access). So the same logic should change the way access is administered!

Support for Parents with Care    

13. We are concerned that having apparently similar cases being dealt with differently for a prolonged period may give rise to a sense of unfairness which may substantially undermine the credibility of the reformed child support scheme. We recommend that all parents with care in receipt of Income Support or income-based Jobseeker's Allowance should be permitted to benefit from the child maintenance premium from the date of commencement of the proposed reforms in 2001 (paragraph 69).

14. We recommend that the forthcoming child support legislation should contain a requirement to up-rate the child maintenance premium annually in line with inflation (paragraph 70).

41. The child maintenance premium is a central part of the Government's reform of child support, ensuring that all children see the benefit of maintenance paid. However, in practice, this extra help for families on income support will not be easy to deliver effectively- and without new computer systems the premium will be practically impossible to operate reliably. For this reason, it is essential that the timetable to implement this reform is the same as that for the other improvements in child support.

42. Further, implementing the child maintenance premium while maintenance is still assessed under the existing rules would lead to many parents with care being disappointed. Many nonresident parents who will be liable to pay child support under the reforms are currently exempt and, as the Committee has observed, one third of those who are assessed to pay anything now are in fact paying nothing. In these circumstances, the child maintenance premium would offer no advantage to the children concerned.

43. The Government is committed to reviewing the value of the premium from time to time. However, a regular annual uprating would mean increasing the payment by a few pence each year- for example, at this year's benefit uprating a £10 weekly payment would have been increased by 11p or 16p depending on the method used 3 . This would introduce further complexity, particularly for those whose maintenance payments varied around the maximum premium. The Government believes that it is more sensible to have disregards in the income related benefits in whole pounds.

13 and 41. Pedantic comment - it is a disregard, not a premium!

A premium is an extra sum of money paid in benefits if particular circumstances apply. Typically the benefits pay it all - eg. "Family Premium" in Income Support pays (say) £14.25 if there is a family.

A disregard is an amount of income of some type which is not taken into account in calculating the benefit. There is nothing in the benefit which says that such income even exists, just that if it does, up to that amount is disregarded, then any more than that amount reduces the benefit £ for £.

42. Irrelevant! Even if it wouldn't benefit some of them for one reason or another, it would still benefit the rest. There are always going to be PWCs who are disappointed, such as those who don't get anything because the NRP is non-compliant, or those who only get £5 because the NRP is on benefits, or those .... None of these is a reason for holding back from the rest.

15. We agree with the Government that a State guarantee of maintenance owed by the nonresident parent would remove the incentive to comply with the Child Support Agency (paragraph 71). 44. The Government welcomes the Committee's endorsement of its policy in this area.

15 and 44. Then why does it appear to work in Denmark? (The government in Denmark can pay part of it, not all, and they get nearly all of it back). Besides - since when did the government intend to rely on incentives!

This same logic says that "because Income Support only has a £10 disregard, and after that the government tops up the amount by paying a benefit, this removes the incentive for the NRP to pay more than £10 of the child support"!

16. We consider that the removal of automatic CSA involvement in WFTC cases is a welcome and positive development for parents with care in work (paragraph 73).

17. We recommend that the Government should give particular attention to the interaction of child maintenance with receipt of other benefits when considering its proposals for reform of Housing Benefit and also in the development of the children's tax credit. We recommend that the opportunity of the Housing Green Paper should be grasped to introduce a substantial disregard of child maintenance received by parents with care in receipt of Housing Benefit (paragraph 75).

45. The Government welcomes the Committee's support for its policy on Working Families Tax Credit. In the current Housing and Council Tax Benefit schemes, there is a disregard of maintenance- the first £15 of any weekly maintenance payment is ignored. At £15 the disregard of child maintenance in Housing Benefit is more generous than the one proposed for Income Support. Along with the total disregard of maintenance in the WFTC this provides and incentive for people to move into full-time work. As with all our policies we will keep this level under review, to ensure that it continues to meet our aims for welfare. 17 and 45. A thesis of the web site is that it would be better simply to separate child support from all means-tested benefits - they simply don't mix. They cause bad behaviour and certainly don't focus on reducing child poverty.
Compliance    

18. We welcome incentives for parents to co-operate and comply with the Child Support Agency (paragraph 76).

19. We recommend that greater attention should be given to improving the CSA's internal processes for verifying information on the lines proposed by the Benefit Fraud Inspectorate (paragraph 81).

20. We recommend that the CSA should be required to include in its annual report to Parliament an account of its counter-fraud activities, including details of the use made of its existing powers (paragraph 82).

21. We support the introduction of severe penalties for those who deliberately persist in fraudulent evasion of their responsibilities to their children, but we recommend that the interests of the children should be taken fully into account before action is taken to seek the imprisonment of a delinquent parent. (Paragraph 85).

22. We condemn the tactics of any group which seeks to encourage nonresident parents to evade their responsibilities to pay child support (paragraph 86).
46. The Government's prime objective for the reformed scheme is that maintenance for children should be worked out quickly and accurately so that regular and reliable payments can start from the earliest opportunity. The radical reduction in the amount of information required to complete the maintenance calculation, coupled with improved access to information from other sources and penalties on parents who try to withhold accurate information will reduce the opportunities for parents to evade their responsibilities.

47. However, there is a need both for co-ordinated counter-fraud activity and the sensitive use of the new penalties. The CSA is determined to build on the findings of the Benefit Fraud Inspectorate and they have already created a senior post with responsibility for taking this work forward. The Government will consider, as this work proceeds, how best to report progress. We will, of course expect the CSA to use the new penalties in a way that is consistent with their responsibility to consider the welfare of any children affected. The decision to prosecute will be a discretionary one to which the statutory welfare of the child provisions in section 2 of the 1991 Child Support Act will apply.

21 and 46. More spin here. What these statements are talking about is "the responsibility of NRPs to enable the Social Security bill to be reduced". Once the talk is about "benefits fraud", as here, it is nothing to do with responsibility to children (who don't become better off - often the contrary) but responsibility to taxpayers & the Treasury. But this doesn't carry the same moral weight as using the word "children"!

22. This refers specifically to NACSA. NACSA "encourages" (they claim only to provide anecdotes!) 2 very different sorts of tactic here:

those that make the children better off at the expense of the taxpayer

those that make neither children nor taxpayers better off and one or both worse off

It is in the interests of government not to distinguish between these! It is also in the interests of government not to distinguish between "child support evasion" (like tax evasion - illegal) and "child support avoidance" (like tax avoidance - legal) - much of what NACSA do is point out legal options.

23. We consider that it would be an unacceptable diversion of resources to pursue recovery of child support payments from parents below the age of 16 (paragraph 87). 48. The Government believes that children are entitled to the emotional and financial support of their parents- no matter how young or old those parents are. And it particularly important that very young parents become aware of their parental responsibilities. So, as now, the CSA will regard child support arrangements for young men who can afford to support their children a priority. However, we accept that there are some groups who in practice are hardly ever likely to have the resources to pay child support. For the sake of simplicity, we propose to exempt nonresident parents who are aged 16 or under.  
24. We agree with the Government that there should not be a general amnesty for child maintenance debts (paragraph 88). 49. The Government welcomes this recommendation. Whatever difficulties nonresident parents have had with the Child Support Agency in the past, it does not alter their responsibility to their children. It would be unfair on those responsible nonresident parents who have regularly paid their maintenance to write off debts owed by others who have, often quite deliberately, frustrated the efforts of the Child Support Agency to calculate and collect maintenance.  
25. We welcome the constructive use of debt management to encourage compliance. We recommend that the Government should take the opportunity of the forthcoming primary legislation to allow Parliament to decide whether the Child Support Agency's power to write off or suspend arrears should be protected from challenge in the courts, taking into account the rights of the creditor parent with care (paragraph 89). 50. The Government is grateful for the Committee's concern to protect the Agency from a challenge in the courts and intends to legislate to put the compensation scheme on a statutory footing in the Bill announced in the Queen's Speech. 50. But will this "take into account the rights of the creditor parent with care"?
26. We want the new incentives to be given a chance to work and we therefore recommend that the application of the reduced benefit penalty should be suspended during the phasing-in period to assess whether the incentives alone are successful in achieving higher compliance (paragraph 94). 51. Since the Green Paper was published, there has been a substantial improvement in the willingness of parents with care to apply for child support, with fewer than one in five parents with care now applying for income support initially seeking exemption. Only a very small proportion of those parents with care who are found not to have good cause go on to receive a benefit penalty- there are fewer than 15,000 such benefit reductions currently in force.

52. Nevertheless, the Government believes that parents should understand that the taxpayer is not primarily responsible for supporting their children. The Report summarises the changes that we are proposing to make to simplify the relationship between claiming income support for a child and child support action. Parents who have good cause not to seek child support will be protected as now- there will be no question of any benefit penalty being applied.

53. Parents who opt out of the child support process will of course lose any chance of receiving the child maintenance premium- and this should provide a sufficient incentive for most. However, there may still be some parents with care who would opt out of child support if the benefit penalty were removed, thus increasing the burden on the benefit system. In the Government's view, it would be unfair on other parents to remove the penalty before it was clear that it was no longer needed.

52. So "parents should understand that the taxpayer is not primarily responsible for supporting their children"? Oh, yes? Then why is there total disregard for child support in the PWC's WFTC, instead of the £15 for Family Credit, at a cost of perhaps £67m per year? (Why is there any disregard at all in Income Support in the reformed scheme?)

The fact is, the government does make taxpayers responsible for paying for other people's children in some circumstances, and then not in others. It isn't a strategy, it is a set of tactics for local purposes which don't add up to a coherent picture!

Operations    
27. We recommend that, in its allocation of funds for the Child Support Agency, the Government should distinguish between the resources allocated to the Agency to deal with cases under the present child support scheme, and the resources allocated to develop the systems, technology and training for the proposed new scheme which will be introduced from 2001 (paragraph 99). 54. The Government intends, in the explanatory notes to the Bill, to identify the expenditure needed to pave the way for reform, restructuring the CSA and investing in its human resources.  
28. We recommend that the resources allocated to the Agency to deal with cases under the present child support scheme should be increased to reflect the anticipated year on year rise in present caseload which is likely to continue until 2001 (paragraph 100). 55. Successful delivery of the child support reforms is one of the Department's top priorities. The forecast increases in the Agency's caseloads is a factor which will be taken into account in determining the allocation to the Agency for 2000/01 from within the overall resources available to the DSS.  
29. We recommend that the CSA should remain within the Department of Social Security (paragraph 103). 56. The Report explores the arguments for placing the CSA under the responsibility of the Inland Revenue. The Government welcomes the Committee's conclusion that this is not appropriate.

29 and 56. The reasoning here is spurious. It is based on false assumptions about what it would be trying to achieve. (Besides, did they consider transferring it to the Lord Chancellor's Department?)

It is quite likely that placing the CSA in a Department which is especially concerned with the short term distribution of precise amounts of money, instead of in a Department which is especially concerned with the collection of money which is correct over a period of years, was one of the most significant blunders originally. (Some other countries didn't make the same blunder).

However, this will probably become irrelevant if and when the DSS is dismembered!

30. The importance of effective computer systems cannot be exaggerated. We recommend that the new child support scheme should not be implemented until the new computer system is fully operational (paragraph 106).

31. We recommend that particular emphasis should be given in staff training to the need for concise and accurate records of all contacts between customers and the agency, both as good administrative practice and to assist in the swift resolution of complaints and disputes (paragraph 107).

57. The Government has no intention of introducing the reforms until adequate and reliable computer support is in place and sufficient staff are properly trained in its use. One important function of any new computer system will be to retain and retrieve accurate records of all contacts between staff and customers.  

32. We recommend that the role of staff rewards in staff retention should be addressed as a matter of urgency, for example by giving bonuses for individuals with long service or who have undertaken additional training. We recommend that in the longer term the Agency should put in place a performance-related system to link staff pay rises to the achievement of realistic but challenging customer-focused targets once the new system is introduced. Targets should be chosen carefully to encourage a properly balanced approach by the Child Support Agency and to avoid the distorting effects of concentrating on the easiest cases to the detriment of others (paragraph 108).

33. We welcome the attention now being given across the board in the Department of Social Security and its Agencies to address the levels of sickness absence (paragraph 109).

34. We recommend that the Agency should continue to give a high priority to training and re-training staff (paragraph 110).
58. The Agency recognises that pay is one of the tools available to address retention issues, but is by no means the only one. The Agency is considering other approaches to reduce its turnover rates including new approaches to staff rewards systems in order to help retain staff. Nevertheless, it is hoped that pay increases for CSA staff this year will achieve a reduction in turnover.

59. A team bonus scheme is being piloted until 31 December 1999. This encourages teams to focus on the achievement of targets and production of deliverables associated with customer service, performance and people issues. Further, a new individual bonus scheme is currently being developed, in conjunction with the Trades Unions. It is envisaged that this will include a clear focus on customer service improvements.

60. A number of options are being considered for ensuring that staff will progress through the pay scales in line with their development. Such proposals would reward staff whose knowledge and experience were of greatest value to the Agency.

61. These proposals are being considered in conjunction with DSS Headquarters and are subject to negotiation with Trade Unions.

 
35. We recommend that special efforts should be made to ensure the availability of all CSA forms in the most common minority languages in the United Kingdom. We recommend that interpreters should be provided for face-to-face interviews in the most widely spoken ethnic minority languages in the United Kingdom (paragraph 113). 62. The Government welcomes this recommendation. The CSA already provides a translation service for forms in the most common minority languages and interpreters are provided with the assistance of the Benefits Agency for face to face interviews. The Agency will take forward further work, in line with this recommendation, to research and develop forms and an interpreter service which fully meets the needs its customers.  
Transition    

36. We are concerned that there may be considerable pressure from affected parents to bring existing cases on to the new system well before any dispassionate view could be reached as to the extent to which the new system is 'working well' (paragraph 116).

37. We recommend that every effort should be made to bring existing cases on to the new system at an early stage (paragraph 120).

63. The Government agrees with the Committee that there will be considerable pressure to introduce the new scheme for existing cases sooner than would be sensible operationally. We want to introduce the new scheme as quickly as we can. We want people who already have a child support assessment to experience the advantages of the reforms as soon as possible. But we have to be careful not to repeat the mistakes of the past. The current scheme failed because it was introduced too quickly.

64. The CSA's caseload is forecast to be over 1 million and transferring so many cases to the new scheme is a major administrative task, which if done too quickly, could put the whole of the new scheme at risk. The Government's view is that a gradual approach is wise, enabling us to iron out any initial problems while the numbers affected are still relatively small.

65. The Government accepts the Committee's recommendation to bring existing cases on to the new system at an early stage and will do this as soon as it is prudent to do so. While also allowing time for those affected to be given advance notification of the changes and when they will occur.

66. In the meantime, however, we are working to improve the service that parents receive now and the Agency has embarked on a four year programme to improve the service it provides.

 
38. We recommend that provisional timetables should be drawn up for transferring existing cases, so that those within the system can at least have some indication of the length of time they will wait (paragraph 120). 67. Existing cases will be transferred to the new scheme when we are confident that it is operating properly. Parents will be given sufficient notice for them to understand and, if necessary query, the new rate of maintenance.

68. Drawing up and publishing provisional timetables, before we have had time to establish that the new scheme is operating as intended, will raise public expectation and cause difficulties for the Child Support Agency in managing these expectations. But we agree that existing parents using the CSA will want to know at what point they will move onto the new system. We will use more general publicity to keep parents aware of what is happening.

 
Scrutiny    
39. We recommend that the Department of Social Security should give priority to funding a systematic programme of independent research into the operation of child support legislation (paragraph 121). 69. The Department is committing significant resources to assessing the impact and operation of child support reform. An evaluation programme has already been developed, which will involve: analysis of the administrative data on compliance and efficiency of the process; a series of large-scale surveys of CSA clients over a period of 5 years; attitudinal research with the general public; and qualitative research with specific groups of clients and with Agency staff.

70. The contract for baseline survey of CSA clients has been let to an independent research consortium comprising University of Bristol (Professor Gwynn Davis), University of Southampton (Professors Nick Wikeley and Ian Diamond) and the market research company, Ipsos-RSL.

 

40. We recognise the Minister's efforts to listen carefully to all shades of opinion and we compliment her on the extent of consultation that has been undertaken (paragraph 122).

41. We are disappointed that it has not proved possible for the Government to fulfil its earlier intention of publishing its Child Support proposals in the form of a draft Bill (paragraph 124).

42. We recommend that the legislation on child support should be committed to a Special Standing Committee in order to enable its Members to take evidence directly on the details of the legislation which they will then proceed to debate and (if they wish) to amend. (Paragraph 125).
71. The Government's proposals for reform have been the subject of an extremely wide consultation process, including two SSSC hearings and written consultation on a Green Paper. We understand the Committee's disappointment at losing the ability to consider the legislation before the Bill begins its Parliamentary process. However, we cannot see that anything would be gained by remitting the Bill to a Special Standing Committee to hold further hearings.

72. The views of key organisations and individuals are now well known and have been carefully recorded in this Report; they have been consulted on the Green Paper; they have commented on the White Paper and they have given evidence to the Select Committee which has been published. It is unlikely that, even informed by the legislation, significant new information will come out of the proceedings of a Special Standing Committee. Given the agreed need to make all possible haste with the reform of child support, the delay that this further stage in the Bill process could cause cannot be justified.

71. But the government did remit the Bill to a standing committee - Standing Committee F!
43. We recommend that the Government should consider either extending the terms of reference of the Social Security Advisory Committee, or creating a Child Support Advisory Committee on similar lines, to scrutinise secondary legislation on child support, as part of the process of building public confidence in the new child support system (paragraph 126). 73. The Government appreciates and commends the Social Security Advisory Committee's work, both in its scrutiny of proposals for legislation and the advice it offers on social security matters more generally. The suggested extension of its remit could not be achieved without a dilution of its primary area of expertise

74. The Social Security Advisory Committee was established to provide advice to Government on social security matters. Its remit excludes a number of related areas, such as industrial injuries. Whilst current provisions for Child Support are closely connected to both the benefits and taxation systems, they are primarily expressions of family policy and law. The Committee has no specific expertise in these matters and scrutiny of Child Support secondary legislation could not be properly undertaken outside that wider policy context. Further, unlike much of social security law, many of the regulation making powers in child support require the affirmative procedure, giving both Houses the opportunity to debate proposed legislation.

75. In the past, the SSSC has played an important role in monitoring the development of child support- and the Committee has considered regulations before they were laid before the House. The Government would expect this close involvement to continue and we are happy to consider ways that this can be improved. Given these safeguards, the Government does not consider that the cost of setting up an Advisory Committee can be justified.

75. But does the SSSC scrutinise secondary legislation? It doesn't appear to be having anything to do with the set of Statutory Instruments following on from the Act!

References

[1] House of Commons Session 1998-99 - Social Security Committee Publications
Social Security - Tenth Report [HC 798] - Child Support White Paper

[2] Reply by the Government to the Tenth Report of the Select Committee on Social Security, Session 1998/99 [HC 798]

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