Letter from Baroness Hollis, Minister for Child Support (etc)

This was in response to the paper ""Child Support should be for Children" - A proposal for reform".

Department of Work and Pensions
Richmond House, 79 Whitehall, London SW1A 2NS
Telephone 0171 - 238 0800
From the Parliamentary Under Secretary of State for Work and Pensions

Your ref: PEA1266/AS/JT

Andrew Stunell MP

21st August 2002

Dear Andrew

Thank you for your letter of 6 August to Andrew Smith on behalf of Barry Pearson about the child support system and the Treasury.

Mr Pearson states that it is his belief that the savings to the Treasury, resulting from the requirement that a parent with care receiving an income-related benefit applies for child maintenance, are not worth the intrusion into the finances of separated people.

Parents with care in receipt of income-related benefits (Income Support and income-based Jobseeker's Allowance) currently make up around three-quarters of the total intake of the Child Support Agency (CSA). Of these 90 per cent apply for maintenance at the outset. The rest either have good reason for not applying, face a benefit penalty or seek support elsewhere.

It cannot be right that parents with care in receipt of these income-related benefits should be able to choose whether to use the Agency's services. To do so would mean that taxpayers, many of whom are themselves bringing up children on low incomes, would be left to subsidise those families. It is not appropriate that taxpayers should be forced to meet a non-resident parent's obligation to support their own children where they can afford to do so. That is the justification for the compulsion.

Having said that, it is true that the introduction of the total disregard of maintenance in tax credits ensures that money flows to families rather than the Treasury, and that the introduction of the child maintenance premium will further this process. However, receipt of child maintenance is an important factor in moving parents away from benefits into work, thus reducing the number of children in poverty. The child support reforms are also to play their part in the Government's strategy to end child poverty within a generation. But the prime objective in reforming the child support system has been the desire to create a system that will get more money, more quickly, to more children.

The introduction of the new child support scheme, from a date yet to be announced, will mean a doubling over time of the proportion of parents with care in receipt of Income Support and income-based Jobseeker's Allowance who will receive child maintenance. This will be a result of:

the simple, transparent calculation of child support liability releasing agency resources from assessment to collection and enforcement activity;

the flat rate liability of £4 a week for all non-resident parents in receipt of benefit, which it is planned will be administered by a link between the benefit IT system and the new child support computer;

the introduction of the child maintenance premium - a disregard of up to £10 per week of maintenance paid for parents with care in receipt of Income Support and income-based Jobseeker's Allowance.

Best wishes

Baroness Hollis of Heigham

Page last updated: 30 October, 2002