Select Committee on Social Security Minutes of Evidence

Memorandum submitted by the National Council for One Parent Families (NCOPF) (CS 30)



  The Government is right to make a last attempt to continue with an administrative system of child maintenance, since lone parents' experiences of the courts were not positive. We welcome the move to a simpler, more transparent formula.


  The average maintenance payment will fall to £30.50 a week for employed non-resident parents, from the current average of £38.23. Many lone parents will be better off because of the introduction of disregards but others, particularly those earning enough to be clear of benefits, will suffer reductions in maintenance levels, though all should gain through knowing how much child maintenance they are due to receive and through a speedier assessment and collection service.


  We welcome the introduction of a disregard for lone parents on Income Support, though we would like to see the initial level set at £15 per week rather than the £10 proposed. It is also vital that the level be reviewed regularly to that it least maintains its value.


  The fact that average maintenance assessments will fall makes improved delivery absolutely crucial. Unless compliance rates improve significantly, a considerable number of lone parents will lose out as a result of these reforms. Regularity and reliability of payment through an efficient collection and enforcement system must thus be central objectives of the system. We welcome the announcement that the CSA will finally introduce regular statements of account for parents but there are many other steps which will be needed to ensure adequate delivery.


  We regret that co-operation with the CSA will still be a requirement for those claiming Income Support, though we are pleased at the retention of the concept of "good cause" for not co-operating. It is disappointing that the benefit penalty is to be retained at its current punitive level for those lone parents on Income Support who fail to co-operate with the CSA. We are also concerned about the impact of moving to a system wherein a lone parent applying for Income Support must opt-out of child support rather than opt-in as at present. Our recommendation would be that a lone parent be allowed to opt out at any time, albeit at the risk of a benefit penalty.


  Some of the procedural changes have potentially serious consequences for child support cases. In particular, child support cases should always be heard with a full, three-person tribunal and wing members should be drawn from other members of the public including lone parents if possible. Tribunals should have at least one member of the same sex as the appellant.


  Improvements in CSA performance are needed before the new scheme starts operations in the year 2001 and the agency needs to be properly resourced to achieve this. Funding needs to keep with up with the agency's fast-rising caseload if the benefit of any additional money is to be felt.


  1.1  Since 1918, the National Council for One Parent Families (NCOPF) has been a unique national centre of expertise on lone parenthood. Throughout our history, the organisation has been dedicated to campaigning for equality of opportunity for one parent families and tackling the exclusion, poverty and prejudice they so often face.

  1.2  There are currently about 1.7 million lone parents in the UK today who care for approaching 3 million children.[1] It is estimated that by the turn of the century, at any one point in time, nearly a quarter of children will live with just one of their parents and between a third and a half will experience life in a one parent family before they reach adulthood. One parent families represent 21 per cent of all families and 91 per cent of them are headed by women;[2]


  Before considering the detail of the proposals, it is worth taking a moment to review the principles of any system of child support. In our view, any new scheme should:

    —  put the interests of children at the centre of the scheme and ensure that emotional relationships or other arrangements between parents are not aggravated or damaged in the process;

    —  be centred on a non-confrontational administrative system which minimises the degree of discretion involved and pays child maintenance at a decent level;

    —  tie-in with other systems of mediation and support in relationship breakdown and the remaining powers of the courts;

    —  improve the income of children living in one parent families who make an application;

    —  provide both incentives to co-operate and to stay in paid work;

    —  retain exemptions for those unable to co-operate and protect those lone parents and children who fear contact with a non-resident parent;

    —  not apply penalties to those families who do not wish to make a child maintenance application;

    —  ensure a minimum income standard is maintained whether maintenance is received or not;

    —  guarantee payment of child maintenance to the parent with care, with the key transaction between the state and the non-resident parent;

    —  in the absence of a payment guarantee, it must at minimum provide regular and reliable payments for the parent with care through efficient and effective collection methods, rates of compliance and speed of delivery to the parent with care; and

    —  provide a strong system of review and appeal in the absence of any significant degree of discretion.


  3.1  The chequered history of the Child Support Agency has ensured that its critics are great in number. It is important to appreciate, however, that these now include many lone parents, or Parents with Care (PWCs) as well as non-resident parents (NRPs). Many lone parents had good reason to support the introduction of the CSA but their experiences of the problems caused by its intervention in their lives have made many of them positively antipathetic to the agency. The starting point for these reforms is thus one where even those who might have been expected to be naturally supportive of the CSA—since they would benefit from its work—are not so. The challenge for these reforms is thus to establish a new regime of child support that can both deliver the money where it is needed and also regain the confidence of parents. If this cannot be done, it is hard to envisage a future for an administrative system of child support in this country. Truly, the CSA is drinking in the last-chance saloon.

  3.2  Our priority throughout the consultations relating to these reforms has been to seek consensus as far as possible amongst stakeholders. No government agency will be successful in attaining widespread enforcement of a measure that is felt to be unfair or illegitimate. Unless the credibility of the system itself and the agency that administers it can be re-established, the reforms will fail, no matter how sensible. Our response has thus been based on finding a system which will be readily comprehensible and acceptable to as many parents as possible.

  3.3  We think the Government right to make one last attempt to continue with an administrative system of child maintenance. Lone parents' experience was that the court system was expensive, inefficient and emotionally damaging. Under present legal aid arrangements it seems unlikely that lone parents would receive the financial support necessary to challenge unfair court decisions and in this climate the decision to continue with an administrative system is the right one. We are also keen that the new system should continue to minimise the degree of discretion involved in decision-making about child maintenance. We appreciate that certain escape valves may be necessary, but believe that too much discretion would undermine the system.

  3.4  In our view, it would be sensible to re-launch the scheme with a new name to try to overcome the legacy of the past. It remains our strong preference that the Agency be completely re-engineered, renamed and relocated as a "next steps" agency within the Inland Revenue (IR). This change would have obvious advantages in terms of credibility, collection and enforcement.


  4.1  We welcome the proposal to introduce a simpler formula. This is a direct response to the problems faced by the CSA in administering the existing system and holds the promise of a more transparent system, understandable to all. We hope as a result that parents will understand their obligations more easily and this will form the starting point for any other negotiations that may be taking place. The simplified formula will mean rough justice for some but if change is essential, and we think it is, we are prepared to live with the consequences of a far simplified formula.

  4.2  We are aware that this could mean lower amounts of maintenance for some parents with care as well as less protection for low income NRPs. However, on the positive side, lone parents will gain through knowing how much child maintenance they are due to receive and through a speedier assessment and collection service. The simplified formula will also make it easier to split or offset assessments where shared care or split residence is involved, or where there is more than one NRP.


  5.1  Under the proposed formula, the average payment will fall to £30.50 a week for employed NRPs.[3] The current average is £38.23.[4] However, government sources suggest that some three-quarters of mothers will be better off as will 70 per cent of fathers who currently pay. PWCs will be better off because of the introduction of the child maintenance disregards on Income Support (IS) and Working Families Tax Credit (WFTC) and fathers due to reduced assessments.

  5.2  The CSA Quarterly Statistics show, however, that there has been a reduction in the recorded proportion of the cumulative caseload represented by Income Support cases. On this basis, fewer lone parents will stand to gain as they will not be getting the £10 disregard and presumably more of the remainder are exposed to losses under the proposed formula. About half the remainder were predicted to gain from the 100 per cent disregard in WFTC (minus HB/CTB losses)[5] and if the CSA succeed in improving compliance rates, the rest should all gain by receiving more of the formula assessment. Losses will be phased-in at £2.50, £5 or £10 pa depending on the income of the NRP.

  5.3  A longer term picture therefore emerges where for the eighteen months leading up to April 2001 those on WFTC may gain considerably through the 100 per cent disregard (unless on HB/CTB). Then at the point of change, many existing cases face gradual child maintenance reductions. The Government's view is that they will still gain from improved compliance rates. This may indeed be so, but it strengthens still further the need to take every possible step to increase compliance.

  5.4  One of the effects of the new, simplified formula will be the creation of hardship for NRPs with incomes close to benefit levels. This could perhaps be addressed by disregarding some income (possibly certain benefit income) or by further gearing the formula at the lower end to produce lower assessments. Another option is to re-introduce protection for working NRPs by disregarding maintenance paid in the calculation of Housing Benefit, Council Tax Benefit and WFTC to the extent that they will not be pushed below IS levels. Our preference is for these problems to be addressed in the benefit system as far as possible.


  6.1  Maximum and minimum payments are also an issue. We agree with the decision not to impose a maximum payment, on the grounds that children are entitled to share in the wealth of both parents and it makes no sense to restrict this in higher income cases. There are likely to be few such cases in any event. The proposal that there should be a minimum payment of £5 per week with very few exemptions causes more problems. In view of our opposition to the benefit penalty, it would be inconsistent to support other families being pushed below IS levels. We think these cases should be zero-rated, particularly those on IS in order to allow continued contact and avoid damage to family relationships, unless these NRPs can be compensated in some way.

  6.2  The question of minimum payments presents something of a dilemma where lone parents are concerned. PWCs have no interest in pushing NRPs into poverty nor in expecting unsustainable levels of child maintenance. Indeed, PWCs rely on co-operation and support and good relations with the NRP to such an extent that many have avoided contact with the CSA altogether rather than damage good contact arrangements. On the one hand it makes no sense to make it impossible for NRPs to maintain themselves and maintain a home suitable for child contact. On the other hand, without a minimum payment, many lone parents on IS will receive no Child Maintenance Premium. One possibility would be to pay the £10 premium to parents with care in this situation in order to guarantee some advantage to applying for child maintenance.


  7.1  If a child spends at least 52 nights a year with the non-resident parent, it is proposed that liability be reduced by one-seventh of the weekly rate for each night spent. However, this would be unfair to lone parents whose costs do not reduce by one-seventh for each night a child spends away from home. Furthermore, it will not necessarily be the case that contact costs the NRPs the full amount deducted, as they will not have to spend equivalent amounts on clothes, food, fuel and other household overheads.

  7.2  We agree with the observation in the Green Paper that this raises legitimate questions about what should be treated as care and what merely contact. However, it is hard to resolve these questions in a formulaic system without requiring judgements about the level of care provided. This remains a rough and ready, if unsatisfactory rule. We note that NRPs with shared care are the only group exempt from the minimum payment of child support. Whilst contact with both parents is to be encouraged, it is important it not be confused with issues of payment.


  8.1  We welcome the introduction of a disregard for PWCs on Income Support. This is a fundamental requirement to ensure that no lone parent is forced to co-operate with the CSA while receiving no benefit from so doing. It also goes some way towards underscoring the government's claim that the reforms are about the best interests of children. That said, we would like to see a higher disregard and would suggest that the initial level should be set at £15 per week rather than the £10 proposed. It is also vital that the level be reviewed regularly so that it least maintains its value.

  8.2  This disregard is referred to by Government as a "premium" but it is not what is usually understood by that term. In fact, the measure simply means that up to £10 of maintenance is ignored when calculating entitlement to Income Support, rather than being an additional payment within IS. The many PWCs on Income Support whose ex-partners are also on IS (as demographers will tell you, this is common) will receive only £5. If the disregard were really a premium, all would receive the £10 in full. These small amounts will be difficult to collect and will not have the desired effect if payments stop and start. One way or another, the amount should be guaranteed if the NRP fails to pay it. Consideration might also be given to introducing the premium in advance of the other reforms to improve co-operation levels and make the Child Support Agency more popular.

  8.3.  We strongly welcome the decision to grant a 100 per cent disregard of child maintenance income in calculating entitlement to the new Working Families Tax Credit (WFTC). Welcome, too, is the decision to remove the requirement to co-operate with the CSA for lone parents in receipt of WFTC. These measures will create a major work incentive and the government is to be commended for its action in introducing them. Our one reservation in this respect is that the 100 per cent disregard will apply only to WFTC, with the child maintenance disregard in Housing Benefit and Council Tax Benefit remaining at £15 for the foreseeable future. This means that lone parents benefiting from the 100 per cent WFTC disregard who are in receipt of both Housing Benefit and Council Tax Benefit will lose 85p in the pound of any gains made (except for the first £15 of child maintenance.) For many lone parents this will simply wipe out help with rent and council tax altogether. We would strongly recommend that this situation be rectified by extending the 100 per cent disregard for those on WFTC to HB and CTB.


  9.1  There is one major limitation of our approach to child support which these reforms do not tackle, namely that the child can only benefit to the extent that the non-resident parent can and will pay. If the interests of children are truly to be paramount, it would be far more desirable to move to a system of Guaranteed Maintenance. Such an approach is often rejected out of hand on the erroneous assumption that it will be too expensive. In fact, if the guaranteed level were set below the mean payment level, there could only be a serious problem if collection rates remained unacceptably low. In addition to the obvious financial advantages to lone parents of such a scheme, there are further major benefits. In particular, under such a guaranteed system, the child support transaction is between the state and the NRP. This makes it less disruptive for parents with care, who are no longer seen as being to blame for pursuing child maintenance and this would certainly improve levels of co-operation. This should make the child support system much easier to enforce. In Denmark, Sweden, Finland, Norway and some other European countries the separation of child and spousal support has been accompanied by the introduction of a minimum child support guarantee.

  9.2  Even if this is not to be considered at present, the move to a system of guaranteed maintenance should be viewed as a key medium-term goal. Whatever decision is made, in the short term, payment should be guaranteed in certain cases such as those in which PWCs are lifted off IS due to receipt of child maintenance. If payments are unreliable, they will otherwise need to re-claim benefit frequently.


  10.1  The fact that average maintenance assessments will fall makes the question of improved delivery absolutely crucial. Unless compliance rates improve significantly, there will be a considerable number of lone parents who will have lost out as a result of these reforms. Regularity and reliability of payment through an efficient collection and enforcement system must thus be central objectives of the system.

  10.2  Implementing these reforms will not be easy for the CSA. Preparation for the task ahead will be vital, requiring a culture shift within the agency itself. The CSA is being asked to provide personal localised services, either by phone or face-to-face, to ensure there remains no need for direct communication between parents. They are also being asked to provide a better service for NRPs (such as advice on budgeting and avoiding debt) and to provide an integrated "welfare service" with new computer software. We agree with much of what is suggested but this can only be achieved through substantial improvement in the telephone services and through publicity and awareness about any new face to face services. In the immediate future, there is a problem about getting to see anyone as existing CSA field offices will have closed down by the end of this calendar year. Given that most people are familiar with the benefit agency sites as the main point of local contact with the CSA, it may take some time for people to understand how to access the new services.

  10.3  We think it right that the new formula assessment uses net income and ignores any income of the parent with care. We are pleased at this recognition that "she will, in any case continue to provide for the children to the extent that she can afford".[6] This overcomes one of the problems of the existing formula where child maintenance reduces as the income of the parent with care rises creating an in-built work disincentive. This change also simplifies the formula significantly.

  10.4  We are keen to see ever-closer working links between the DSS and Inland Revenue over child maintenance assessments. Our preference remains for the agency to be re-located there, not least because the IR have strong inspection powers and penalties and are perhaps thus less avoidable than the CSA. It would also make sense for the information required for a child support assessment to mirror closely that required for taxation in order to make avoidance more difficult. Failing that, better mechanisms are needed for verifying earnings, including a system for pro-actively spot-checking them, with the capacity and commitment to investigate further if the agency has any reason to believe statements given may be false.

  10.5  The problem of self-employed NRPs remains. Much of the difficulty is due to lack of accounts where low income NRPs are concerned. However, there are also cases of very high-earning self-employed NRPs who are apparently unable to produce financial information. Since assessments are to be based on taxable profit, it is important in these cases for stronger links to be forged with the Inland Revenue, as well as making close telephone contact with NRPs (as in a recent CSA pilot).

  10.6  We accept that there are legitimate difficulties around confidentiality and the disclosure of information held in computer records. One way round this would be to require NRPs to provide the necessary authority to access this information on the maintenance enquiry form (MEF) or equivalent. They would thus be required formally to sanction access to IR records subject to the usual penalties for non-co-operation. The creation of an offence of deliberate withholding of information from or misrepresentation to the CSA may help improve compliance. However, since the agency under-uses the powers it already has, the mere availability of additional weapons will not necessarily improve matters. For example, we would wish to be assured that information given by PWCs will be investigated by the agency. Currently, PWCs report that such information is often ignored.

  10.7  We welcome the announcement in the White Paper that the CSA is finally to introduce regular statements of account for parents. This will be a key step in ensuring that all those using the CSA are kept informed of the progress of their cases at all times. It should also reduce the number of long-term errors.


  11.1  We welcome the approach of the White Paper, which regards child-focused reasons as being the main reason for departures from the formula. It will be vital not to allow too many grounds for departures or there will be danger of undermining the very nature of the new formula as a simple and transparent alternative to the current complex model. We assume other forms of additional maintenance will continue to lie with the courts as before.

  11.2  We welcome the proposal to enable higher assessments in cases where, for example, the NRP has a lifestyle inconsistent with his or her declared income or where he or she has diverted or under-used assets. However, we think that properly functioning links with the Inland Revenue and greater use of inspection powers would reduce the need for these provisions to be used often. Also, tribunals should be allowed to substitute an income level where it seems on the balance of probabilities that more income is available than that declared. Powers to order disclosure and to summon witnesses and evidence may also need to be strengthened.


  12.1  We regret that the government feels the need to continue to make co-operation with the CSA a requirement for those claiming Income Support, although we are pleased that they have at least retained the existing concept of "good cause" for not co-operating with the agency. The poor co-operation rate currently is the result of a combination of lone parents who fear the consequences for themselves and their children, together with those whose experience of the CSA—first or second-hand—has been so bad that they are unwilling to interact with it at all. Since in future almost all lone parents will derive some benefit from the payment of child maintenance, and since the government is confident of dramatic improvements in CSA performance, it should be willing to trust to the regime of carrot rather than stick. After all, the stick has been shown to fail dismally.

  12.2  It is disappointing that the benefit penalty is to be retained at its current punitive level for those lone parents on IS who fail to co-operate with the CSA. We are at a loss to see how forcing a family to live on significantly less than the level of Income Support can be in keeping with the stated aim of the child support scheme as being in the best interests of children. At the very least the benefit penalty should be reduced to its previous level of a 20 per cent benefit cut for 6 months followed by a 10 per cent cut for a further 12 months. The current penalty of a 40 per cent cut in benefit for 3 years, renewable indefinitely is far too harsh.

  12.3.  We are concerned about the impact of moving to a system wherein a lone parent applying for Income Support must opt-out of child support rather than opt-in as at present. It is not yet clear how long a period of time a claimant will have in which to decide to opt out, and we are concerned that too short a time limit not be imposed. There also needs to be a mechanism for withdrawal from the child support scheme should the consequences prove detrimental to the family. Our recommendation would be that a lone parent be allowed to opt out at any time, albeit at the risk of a benefit penalty.

  12.4  Finally, we are deeply concerned about the range of people who will be assessing whether lone parents have "good cause" not to co-operate with the CSA. These interviews are extremely sensitive, requiring the assessor to probe very distressing issues, asking the lone parents to recount situations of fear, cruelty, violence or even abuse. In the past, only trained CSA staff would handle these interviews. Now, under the Closer Working Initiative, so too are Benefits Agency staff. Furthermore, under the "ONE" Service pilots, the "ONE" advisors will presumably also be conducting child support interviews. We are gravely concerned at the potential consequences of an ever-growing body of people conducting these interviews, since this increases the chance of their being managed by staff without adequate training or experience.


  13.1  We are concerned about the proposed move to a three-stage decision-making process, consisting of a gateway, a stage for discussion and correcting errors and finally appeal to a tribunal. This reform mirrors the changes introduced in the Social Security Act 1998 and embodies the new restrictions on the number of tribunal members, the ability to hear cases in the absence of appellants and the ability to strike-out cases. Some of these changes have potentially serious consequences for child support cases. In particular, the reduction in the number of tribunal members is of grave concern. Moving to a one-person tribunal is not only undesirable judicially, but it could readily mean, for example, a female lone parent having to go before (literally) a one-man tribunal to give a detailed account of the reasons she had for having good cause not to co-operate with the CSA. In our view, child support cases should always be heard with a full, three-person tribunal and wing members should be drawn from other members of the public including lone parents if possible. Every tribunal should also have at least one member of the same sex as the appellant.

  13.2  The time limit of one month in which to appeal a decision runs from the decision date, so parents must be given clear advice that they will run out of time (or lose money) if a dispute is likely to be lengthy. It will be in their interests to appeal early. Unless they are given additional time in which to appeal, this will militate against the "mediation period".


  14.1  Improvements in CSA performance are needed before the new scheme starts operations in the year 2001. The agency needs to be properly resourced to achieve this. The CSA is already embarking on a period of change and re-organisation under its own Operational Strategic Review as it aims to develop a more "customer-focused" and "cost-effective" service over a three to four year period starting with a root and branch re-structuring of the field operation. This has already resulted in the closure of many field offices. Basic processing work is moving to regional Child Support Agency Centres (CSACs) with the aim that remaining staff will be available for face to face contact at a wider range of locations, including perhaps at Citizens Advice Bureaux. It is hard to imagine that such dramatic changes can be achieved without disruption for service users.

  14.2.  The CSA has been set very challenging new targets but, despite rising expectations, its budget has barely risen in recent years. This is despite £15 million in additional funding from government given on a "spend to save" basis (an extra £120 million in maintenance must be collected). At the same time the CSA plans a 51 per cent increase in caseload by the year 2002. The live and assessed caseload, currently around 830,000 is due to rise to 1.2 million by the year 2004. If it is intended that the Child Support Agency should continue, then it is essential that it be resourced better to enable it to improve its performance and better its reputation before the new system comes into place. Otherwise, the new regime will be hog-tied from the start. The announcement earlier this year of additional funds for the CSA was welcome, but it is vital that the basic work also continues to be adequately funded. In particular, unless a commitment is given to fund the workload of the CSA as it grows year on year for the next five years, any money allocated for improvements will simply be swallowed up as the agency keeps running just to try to stand still.

  14.3  Despite improvements in the Agency's performance, the level of outstanding debt stands at over a billion pounds with £691 million representing maintenance outstanding on full assessments.[7] An estimated 55 per cent of these full assessments are designated as uncollectable or possibly uncollectable. This year, the Public Accounts Committee thought it appalling that delays and backlogs would not be cleared until March 1999 and recommended the setting of more demanding clearance targets.[8] Overall, the CSA's performance was described as unacceptable: "Individual citizens should not suffer because of the mistakes of public bodies." Not surprisingly, the Committee expressed scepticism at the ability of the agency to deal with its expected growth in caseload in the light of budget constraints. Again, the DSS was urged to look at ways of simplifying the system. It seems sensible that some attention should be paid to these issues in advance of 2001.

September 1999

1   Ford R and Millar J, Eds. (1998) Private Lives and Public Responses: Lone Parenthood and Future Policy, London: PSI; and Haskey J (1998) One-parent families and their dependent children in Great Britain, Population Trends 91, Spring 1998, ONS. Back

2   Living in Britain (1998) Results from the 1996 General Household Survey, ONS, Table 2.4.2. Back

3   A new contract for welfare: Children's Rights & Parents' Responsibilities (1999) Cm 4349, DSS, London: The Stationery Office, p 13. Back

4   CSA Quarterly Summary of Statistics, May 1999, Table 3.3. Back

5   According to DSS there are no plans to change the £15 child maintenance disregard in HB and CTB - this means lone parents on HB/CTB will lose 85 per cent of any gains over £15. Back

6   Children First: A New Approach to Child Support (1998) Cm 3992, London: The Stationery Office, p 47. Back

7   See HC Hansard, Written Answers, 8 April 1998, col 375. Back

8   See HC Committee of Public Accounts, Twenty-First Report, Session 1997-98, Child Support Agency: Client Funds Account, Session 1996-97. Back

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