Draft Child Support (Miscellaneous Amendments) Regulations 2003

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Mr. Steve Webb (Northavon): Now that we have a date for the new cases to go on the new system, will the Minister confirm that the changes he explained will be dated from the date of implementation of the new system? Will he confirm that the payment will change a

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year from the conversion date—3 March, for example? Will everyone be dated from the date on which they changed so that phasing will happen every day of the year?

Malcolm Wicks: I gave an illustrative example, but the hon. Gentleman seemed to be talking about existing cases.

Mr. Webb: May I clarify my point? Perhaps I did not make myself clear. New cases linked to existing cases will come on to the system every day of the year, so will the five-year phasing take place every day of the year?

Malcolm Wicks: Yes, the transitional arrangements exist to enable such phasing to take place, in the interests of budgets of both parents involved.

The amendments made to the transitional regulations by regulation 9 ensure that provisions work as we intend them to do. For example, they clarify the regulations to ensure that when an application for child support maintenance processed under new rules is found to have a link to another case the old case will automatically convert. That will happen even if it is before we convert the majority of cases to the new scheme.

An example of that would be where a parent with care makes an application for child support maintenance from her former partner who is already the non-resident parent of another child for whom he is liable for child support maintenance in the current scheme. It is important that the current scheme case converts to the new scheme otherwise the non-resident parent could be assessed simultaneously under both the old system and the new rules, leaving him with a liability for maintenance that he could never afford.

The amendments made by regulation 7 to the maintenance calculation procedure regulations are concerned with the new child support scheme. Its provisions are intended to clarify the existing regulations including those that govern the effective date of an application. That is the date from which a non-resident parent's liability for child support maintenance will begin. That regulation is specifically concerned with effective dates in the period immediately before and after the launch of the new scheme. It provides for the action to be taken where multiple applications are made for maintenance, either for the same qualifying child or the same parent.

The amendments made by this regulation also tidy up some existing provisions, which ensure that periods of maintenance liability are continuous. For example, if the roles of a parent with care and a non-resident parent reverse as the child moves to live with a different partner, one amendment helps to ensure that maintenance is paid for that child continuously. It also determines under which scheme the case should be considered. The amendments made to the decisions and appeals regulations by regulation 3 relate to the new scheme and add to the existing provisions on effective dates of supersessions. That is the term used when one decision is replaced by another.

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The amendments do not contain any significant policy changes. They cover situations where one qualifying child leaves the parent with care's household but other qualifying children remain. The amendments made by the regulation provide that the maintenance calculation is superseded from the first day of the maintenance period to take account of the qualifying child who has left. They also cover cases where the parent with care has another qualifying child with the same non-resident parent. The amendment provides for a dedicated effective date provision for a supersession in those circumstances. The regulations underpin our commitment to ensuring that child support works both for parents and their children.

I realise that my opening speech has been somewhat long. That is not because I did not have time to write a shorter one, but because of the complexity of regulations that seek to govern the interface between the state's concern about family life and the difficulties facing many families today in terms of child maintenance. I am satisfied that the regulations are compatible with the European convention on human rights and I commend them to the Committee.

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Mr. Oliver Heald (North-East Hertfordshire): May I add to the sentiments expressed by the Minister and say what a delight it is to be here under your tutelage, Miss Widdecombe?

On one level the regulations can be said to be technical and to deal with the principal regulations under the current and future child support schemes and to be consequential to the introduction of the new tax credits in April. However the previous Secretary of State for Work and Pensions, the right hon. Member for Edinburgh, Central (Mr. Darling), said:

    ''The CSA became a bureaucratic nightmare for parents and staff alike.''—[Official Report, 1 July 1999; Vol. 334, c. 431.]

Four years on, we have a new computer system, which the Minister told us only last week was £39 million over budget for the taxpayer, and there is about £2 billion maintenance that is probably uncollectable. Why? Well, it is the complexity of the system but it is also the delays in implementing policy. They have centred on the computer system. Last March the then Secretary of State postponed the computer system and in January the current Secretary of State told us that it had been possible to pilot the new IT for some cases on existing rules. He then told us that there was to be an indefinite delay in bringing the existing case load of 1.1 million people on to the new system. We are today making further technical changes to the rules—the Minister describes those changes as ''complex''—and one must ask what the effect will be on the computer system.

We know that one of the reasons it has taken so long for the computer system to be able to deal with even a few piloted cases is because of all the changes that Ministers have made. At present, there is the old nightmare of the first system, and the new linked transitional cases where some existing cases will be linked with new cases. Those cases, as the hon. Member for Northavon (Mr. Webb) said, will be

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subject to complicated transitional arrangements under which each individual claimant who has a linked case will have a £5 a week transitional arrangement, and over time that will be reduced to a £2.50 transitional arrangement. That is the second part of the scheme. The new arrangements, for which we expect to have the new system, cover all the new cases but they are not linked and are subject to the changes that we are discussing today. There are also the absolutely new cases, which are not subject to any transitional arrangements. From one old nightmare, there are now three further systems operating one on top of the other, creating a system in which four systems have to work together in the computer. Is the software already in place for that to happen?

Regulation 4 provides for references to the working families tax credit and disabled person's tax credit in regulation 9 of the Child Support Departure Direction and Consequential Amendments Regulations 1996 to be replaced with references to working tax credit from the date of implementation. Regulation 9 provides that for a person with care but in receipt of the working families tax credit or disabled person's tax credit a departure cannot be made. The provisions of the working tax credit are different from those of the working families tax credit, because they concentrate on family income more than on the income of one earner. Some people currently in receipt of the working families tax credit do not receive working tax credit, and vice versa. Can the Minister give us an assessment of the numbers who will be debarred from a departure or gain the ability to seek a departure, as a result of the move to working tax credit? Can he also tell us whether the software is in place for that change?

Regulation 5 deals with the exceptions from benefit sanctions where a parent with care fails to co-operate with the CSA: that exemption currently occurs where there is a disability premium higher pension, or a disabled child premium. The purpose of regulation 5 is to ensure that when the new child tax credit is introduced, a child who receives the disabled child element of it should be in exactly the same position as previously. Will the Minister confirm that that affects all the people who currently have that exemption, and that no one will be unable to receive it in future? Is the software in place to ensure that the change to tax credit in that way is effected as before, if necessary?

Regulation 6 deals with the treatment of the new tax credits in assessing income and maintenance in the current system. Under regulation 6(7)(b) the child tax credit is not counted as assessable income, but under regulation 6(5) it is taken into account as protected income. Can the Minister explain why that is, and will he tell us if the software is in place to achieve that?

Paragraph 19 of the explanatory memorandum on regulation 8 states:

    ''An award of child tax credit will be treated as income of the non-resident parent.''

Does that mean that, under the new system, child tax credit will be counted as assessable income, whereas under the current system it is not? If that is the case, will the Minister explain why, and also tell us about the software related to that?

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Regulation 9 deals with the rules on the transfer of cases from the current to the new child support scheme. What is the effect of the change in commencement date in regulation 9(2) and 9(3)? Several amendments deal with cases where more than one person with care is associated with the same non-resident parent. Regulation 9(6) provides that in linked cases, the existing case will be converted. Many cases are known as multiple assessment units. Will the Minister estimate how many people will be affected by the change and confirm that the software is fully in place?

Amendments to regulation 7 relate mainly to the effective date of maintenance calculations and transitional arrangements. A child support expert tells me of an important issue affecting the new schedule for the maintenance calculation procedure regulations. The new schedule, which is inserted by regulation 7(8), relates to the transitional provisions for multiple application cases—namely, cases where more than one assessment application is received. The rules for effective dates in multiple applications in the new schedule seem to mean that where someone makes an application under section 4 of the Child Support Act 1991 prior to 3 March 2003 and makes a subsequent application under section 6, whereby the parent with care is required to authorise the procedure because he or she is in support of income support or income-based jobseeker's allowance, the case will be treated under the new rules. That could prevent non-resident parents from trying to get an assessment under the old calculation or, equally, prevent the parent with care from getting a higher assessment under the existing scheme by applying before 3 March. The question is whether that is the Government's policy intention and, if so, why?

We were told that the system was a bureaucratic nightmare, but the Government have added to the bureaucracy by introducing new bureaucratic tax credits. How confident is the Minister that, in a couple of years' time, we will not still be asking when the new computer system will work, and why the software needed changing? We have already witnessed substantial delays, and thousands of people across the country have suffered because of the non-delivery of the computer system. It looks as though Ministers are again introducing rafts of changes because of the Chancellor's obsession with tax credits. People will, in fact, have to wait even longer under the new ''simpler system'' and they will be as dissatisfied by what has happened today as we are about what has happened in the past.

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