Covering letter to Doug Smith, CEO of the CSA
This was a covering letter accompanying my paper:
21st February 2003
Dear Doug Smith
I have already sent the attached paper to Baroness Hollis, etc.
As we both know, the new CSA scheme commences on 3rd March 2003 for new, and linked, cases. The government intends cases on the current scheme to be converted later, probably during 2004. Where there is a large change in liability, the government intends that the change will phase-in over a number of years. A sensible controlled introduction.
We are also both aware of a potential loophole in the above plan. It was discussed in the Commons on 10th February, but was already public knowledge before then. Steve Webb asked what was being done about the intention of some parents with care to close their case then re-apply after about 3 months to restart it under the new formula. Andrew Smith stated that the 13-week period was "precisely calculated to attempt to close that loophole".
It doesn't come close to closing that loophole, as the enclosed paper shows. In many cases, exploiting this loophole will yield a profit to the parent with care even within 2003, and in far more cases within a year. If a significant number of the third or so of cases where there is an increase in liability go down this route, it will put unwanted stress on the CSA and result in publicity that no one should want. Some such parents with care are known to be attempting this method already, reportedly on the advice of CSA staff. The news is out.
The government may simply ignore the loophole and hope it will not have a major impact. It may change the regulation concerned. Another approach may be to inform non-resident parents that they have the option of applying themselves to restart their case during the 13-week period to ensure it continues on the current scheme. It is their choice, of course.
Being childfree, I am not impacted. While I am critical of a number of aspects of the new scheme, I believe that until it is operating successfully there will not be an opportunity to address my concerns, so I am as interested as you are in seeing it working as soon as possible. That is behind my urgent production and posting of this paper, to you and Baroness Hollis.
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