Child Support, Pensions and Social Security Bill

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Mr. Pickles: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: No. 7, in page 7, line 9, leave out `the person' and insert

    `all the persons'.

No. 8, in page 8, line 29, leave out from `of' to `(under' in line 31 and insert

    `its revision (under section 16), its supersession (under section 17) or any appeal connected with it'.—[Mr. Kevin Hughes.]

Clause 5, as amended, ordered to stand part of the Bill.

Clause 6 ordered to stand part of the Bill.

Schedule 2

SUBSTITUTED SCHEDULES 4A AND 4B

TO THE 1991 ACT

Mr. Pickles: I beg to move amendment No. 135, in page 73, line 2, leave out `may' and insert

    `shall'.

The Chairman: With this it will be convenient to consider amendment No. 136, in page 73, line 4, at end insert—

    `(aa) so as to require, in any case where the maintenance calculation is to be made by reason of section 6, that any application for a variation is made within 14 days of the non-resident parent receiving notification that a maintenance calculation is to be performed'.

Mr. Pickles: The principal purpose of the amendments is to require applications to be made promptly. They are probing amendments that seek to obtain from the Minister a brief explanation of how applications will be dealt with.

Angela Eagle: The speed with which we are doing business is leaving us all breathless, me especially. I shall deal first with amendment No. 135, which would change the wording of schedule 2 to state that regulations ``shall'' make provision instead of ``may''. The amendment refers to paragraph 2 of proposed schedule 4A to the Child Support Act 1991, as set out in schedule 2.

4.45 pm

The provision allows for regulations to specify the procedure to be followed by the Secretary of State or tribunal in considering a variation application. We intend to make such regulations but need the flexibility—that word again—to make other such regulations on procedural matters if required.

The regulations will cover such matters as what should be accepted as an application, types of cases that should be rejected at the preliminary sift and the handling contest—at which the other party is given an opportunity to comment on the application. Many of the regulations for variation applications will be similar to those set out in the Child Support Departure Direction and Consequential Amendments Regulations 1996, which I am sure are fresh in all hon. Members' minds.

While I appreciate that there may be some concern about the use of the word ``may'', I assure the Committee that we fully intend to make regulations in respect of the procedure to be followed, as indicated in the schedule. The word ``may'' is used in the Child Support Act 1991 in relation to departure applications and is common in connection with regulation-making provisions. We are simply applying the same wording to the expenses and cases that we intend will be contained in the regulations on variation applications.

Amendment No. 136 relates to applications for a variation made before a maintenance calculation has been determined. The Bill, unlike the current departures scheme, provides that applicants for a variation will not have to wait until a maintenance calculation had been made before being allowed to apply. That positive step should help to get the right amount of maintenance flowing at an earlier stage.

The amendment would impose a time limit of 14 days on applications in respect of which the parent with care was treated as having made an application for maintenance because of being in receipt of a prescribed benefit. The restriction would apply to either parent, and the 14 days would begin from the date on which the non-resident parent was first contacted about the application for maintenance.

Mr. Pickles: Has the Under-Secretary reached a conclusion about the expected number of applications, given the simplified formula? Does she anticipate an increase or a decrease?

Angela Eagle: The principle behind the new variation scheme is that it should be drawn tightly. That is why it will be triggered only if people fall within certain income thresholds. One of the underlying principles is that the variations must be of an order to have a reasonable effect on the resulting maintenance level. That cuts out small changes that might be used to trigger variation otherwise. I cannot predict the future and give an exact figure for the number of variations that we expect. The aim is to keep them within tight limits, and we do not think that the provision creates a huge loophole enabling people to drive a coach and horses through the new rules.

Mr. Pickles: I appreciate that the Under-Secretary is still having problems with her throat and we all sympathise. I apologise for repeatedly interrupting her, but perhaps that will give her a chance to have a Polo mint or something like that.

We are not thinking about whether the provision will create loopholes, but about whether it will provide justice. The question I would really like answered is whether the hon. Lady envisages more or fewer applications.

Angela Eagle: The grounds for variations are drawn tighter than those for departures, simply because of the shape of the scheme that we are considering. We discussed that issue on clause 1. For planning purposes only—and we cannot be sure in advance of the accuracy of such planning—the figure for applications currently expected in the first year is about 21,000. That needs to be set against the predicted case load of 1.2 million for 2002 when new cases begin to be added to the scheme.

Mr. Edward Leigh (Gainsborough): That figure of 21,000 is interesting, but it would be helpful if we could have an idea of how it was reached. A quite wide list of grounds for variations is set out in the schedule. As the basic formula will be so simple and people will be looking for a way of having their personal circumstances taken into account, the figure of 21,000 out of 1.2 million seems very low.

Angela Eagle: We must remember that the variation scheme is drawn very tightly and includes thresholds below which variations will not be allowed and will be sifted out: they are £15 for those earning more than £200 a week and £10 for those earning less. There is also an assets threshold of £65,000, the level at which the maintenance calculation would be materially affected as it would provide £100 a week income, assuming an interest rate of 8 per cent. That is, by the way—for the benefit of the hon. Member for Beckenham (Mrs. Lait) who looks envious—the judicial rate. It has not been plucked out of the air. There are always official rates for such things. The rate that I quoted would change with the one used by the courts. The current departure scheme's £5,000 capital limit, below which capital would not be thought to affect the outcome of the maintenance calculation, would also remain.

We intend to keep the new variation scheme tightly drawn and on that basis estimate that the variations are likely to apply in a minority of cases—we think about 5 per cent. We are assuming 250,000 applications a year. I can only provide the planning figures that have been given to me, and the hon. Member for Gainsborough (Mr. Leigh) should accept them on the basis on which I offer them, that we cannot tell what will happen in the future.

I was explaining that amendment No, 135 would impose a time limit of 14 days on applications where the parent with care is treated as having made an application for maintenance because she is in receipt of a prescribed benefit. We have no intention of imposing a time limit in such cases. That would simply result in more applications being considered after a maintenance calculation has been made. Parents often need time to consider whether they have grounds to apply. Applicants who missed the 14-day deadline would feel frustrated about having to wait to apply until after the maintenance calculation had been made.

The amendment would make the system more complex. Any parent who made a late application would be told to wait until after a decision on the maintenance calculation, which would defeat the object of being able to apply for a variation at the beginning of the process, as the Bill allows.

We believe that the word ``may'' is the correct one. We intend to make regulations on the procedure as set out in the substituted schedule 4A to the 1991 Act. However, we do not want to be unnecessarily restricted in making regulations and do not believe that a duty to act is required. Further, imposing a time limit on a variation application is unnecessary and would simply delay applications. I urge the Committee to reject the amendments.

Mr. Pickles: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Pickles: I beg to move amendment No. 224, in page 73, line 14, after `furnished', insert

    `by the person making the application for a variation within such period as may be prescribed the Secretary of State shall dismiss the application but if such information required to be furnished any other person'.

This simple amendment seeks to emphasise the high cost of providing the information required for compliance. We welcome the fact that it would encourage applicants to get their affairs in order and to make the necessary disclosure. We wish to ensure that information is relevant. We have put in the amendment a safeguard to ensure that a party could not sabotage the arrangements by not supplying the information. That would complement the Government's aims.

Angela Eagle: The amendment relates to the handling of applications for variations. It might help if I described the way in which the process is intended to run.

All variation applications will be subjected to a preliminary scrutiny. Earlier amendments concerned the way in which that process might work. The process applies to the current departure scheme, and it is intended to weed out applications that have no prospect of success at the earliest possible stage.

If the Secretary of State considers that there might be good grounds for a variation, but requires additional supporting evidence or other information—about contact costs, for example—he will advise the applicant accordingly and allow a further month for the information to be provided. At the end of the period, or when the further evidence has been provided if it is within the month, the Secretary of State will notify the other parties affected by the variations. He will tell them the grounds on which the application has been made, provide them with relevant information or evidence, and invite them to comment within 14 days. At the end of that period, the Secretary of State will consider the application in the light of all the evidence to hand, and decide whether to agree to a variation.

That process operates in the current departures scheme, and it has stood the test of time. It would be unreasonable for the Secretary of State to reject an application out of hand solely because the applicant has failed to provide one piece of the jigsaw. We recognise that there might be legitimate concerns about non-resident parents viewing variation applications as an opportunity to avoid or to delay meeting their child support liabilities. A non-resident parent applicant might be required to make regular maintenance payments while a variation application is being considered so as to counteract such concerns, and to ensure that child support continues to flow. Again, we considered relevant amendments earlier.

If it may reasonably be expected that the variation rate will not succeed, the full amount of the existing rate will be payable, otherwise a lower rate will be payable. The lower rate will be set out in regulations, and is intended to take account of what the rate would be if the variation application were successful.

In the light of the above, and of the safeguard provided by the regular payments condition, I ask the Committee to reject the amendment.

 
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