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Sarah Ann Paice (Child Support Agency)

4 pm

Ian Lucas (Wrexham) (Lab): It is a pleasure to have secured a debate under your chairmanship this afternoon, Mrs. Anderson, to discuss the case of my constituent Mrs. Sarah Ann Paice. It is with some reluctance that I raise the case of an individual constituent, but its history has been so profoundly frustrating for her, her family and the workers in my constituency office that I thought it appropriate to bring it to the Minister’s attention.

Since I secured the debate I have been contacted by representatives of the National Association of Citizens Advice Bureaux and an organisation called One Parent Families, who have highlighted issues that echo strongly in the facts of the case. I hope that the Minister will therefore find the present discussion helpful in the context of the Henshaw review. I should like to thank personally Mrs. Janet Allberson of One Parent Families and David Tinline of the CAB for briefing me.

Let me make it clear at the outset that I fully support the principles that lie behind the present child support system. Those of us who are parents have a responsibility, both moral and financial, to our children and that responsibility should continue regardless of whether or not a marriage or a partnership continues. As a former practising solicitorI am also aware that the court system that the child support system replaced was cumbersome, and often extremely slow and unresponsive to all parties involved. There is always a danger of seeing the grass as greener on the other side of the fence, but my limited experience of matrimonial courts in the days before the Child Support Agency was that they were themselves a source of great frustration. The involvement of the courts does not always help; that said, however, the case of Mrs. Paice illustrates the failures of the current system.

My constituent Mrs. Paice separated from her husband David Paice in September 1999; at that time, they had three teenage children. From that time until September 2002, Mr. Paice paid the mortgage for the matrimonial home in lieu of child support. Without notice, he stopped doing so because, as Mrs. Paice subsequently discovered, he remarried around that time. In May 2003, Mrs. Paice received a letter telling her that Mr. Paice should pay £4,267.49 for the period 9 July 2002 to 26 May 2003, which is now almost three years ago. That payment was not made and, as the House will hear, approximately that sum is stillowed today.

By February 2004, Mrs. Paice was informed that the arrears of child maintenance had increased to £5,397.95. However, a monthly payment of £440.92, was specified to be paid by Mr. Paice. During that period Mrs. Paice made numerous calls to the Child Support Agency and the case was shifted from the Belfast office to the Birkenhead office to the Nottingham office and then back to Belfast again. None of Mrs. Paice’s efforts resulted in payment of the money that was owed to her. In February 2004—more than two years ago—she first approached me for help.

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It seems to be characteristic of the CSA that orders are made and communicated to the parents who are looking after children, but are not enforced. As a result, parents such as Mrs. Paice who have the obligation—a heavy one, as those of us who are parents know—to bring up teenage children, with all the pressures that that imposes, frequently manage without any of the money that has been awarded to them. The real source of frustration for someone who is under financial pressure is that they are presented with a piece of paper that states that they are entitled to thousands of pounds, but they do not receive the money. That must cause anger to such individuals. It is vital that orders are enforced, at least in part, and in most cases in full.

In Mrs. Paice’s case, an original order was delivered to her. It appeared to be helpful, but it was not enforced. She received further communications before payments were made, and the order was changed—in fact, the payment was reduced—but still she received no payment. The figure was then reduced further. By March 2004, Mrs. Paice had received a notice from the CSA indicating that £77.98 per week was to be paid. Again, the amount had been reduced without the previous sums owing being paid. By that time, the arrears had increased to £5,107.80—a very large sum indeed. Mrs. Paice still had financial obligations and was coming under more and more financial pressure but she was not receiving the arrears that were owedto her.

By April 2004, a deduction from earnings request had been served on Mr. Paice’s then employer, the British Army, to collect £411.19 per month from him, comprising £387.36 for regular maintenance and £23.83 to pay the arrears, which had increased still further to £5,548.72. Assurances were given that the money would be paid into Mrs. Paice’s account. The money began to come in but, in July 2004, the amount was reduced to £361.83 without any notice being given to her. Later, she was given an explanation and the matter continued to some extent satisfactorily until May 2005, when Mr. Paice left the Army. As a consequence, Mrs. Paice stopped receiving payments in April 2005. The money that she had been relying on since the previous year stopped, again without any notice.

To Mrs. Paice, the CSA appeared throughout to be more responsive to the payer than the payee. One can well understand her feelings. When the payer’s circumstances changed, something happened immediately, but there was no suitable response when Mrs. Paice came under increasing pressure.

A further review of Mr. Paice’s position was completed in July 2005. It indicated that he should pay just £66.19 per week—a substantial reduction. To rub salt into Mrs. Paice’s wounds, she became aware that a lump sum payment that Mr. Paice had received from the Army when he left had not been taken into account to discharge the substantial arrears that were owing from the period two or three years earlier. Still worse, a further assessment of Mr. Paice in November 2005 indicated that his liability was nil.

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In a letter in January 2006, the CSA concluded:

By 16 January 2006, arrears stood at £4,007.15.Mr. Paice agreed to pay them off at £5.70 per week. On that basis, by my rough calculation, full payment will take 13 years, by which time Mrs. Paice’s youngest child will be 26.

Mrs. Paice is very angry about the way in which her case has been dealt with. She feels that she has not made progress and that she has not received satisfactory responses from the Child Support Agency. She believes that a substantial sum remains to be paid, close to the amount of arrears that existed in 2003. I know that the Minister is not the person responsible for the circumstances of the particular case, but sincehe has had an opportunity to consider it, I askhim whether he believes that there has been maladministration.

Why was the lump sum payment that appears to have been paid to Mr. Paice not used to pay off the arrears owed from 2003—arrears that should have been used for the benefit of the children, who were growing up in that period? Does the Minister really believe that it is appropriate for an award to be made for payment of arrears over a 13-year period?

I have one final but important point concerning a recommendation made by One Parent Families that, in certain limited circumstances, when a resident parent believes that the Child Support Agency has not dealt satisfactorily with a case, there should be an opportunity to apply to the court to raise the matter there. In my experience it can sometimes be beneficial to secure court attendance by an individual—or in this case two parties—to clarify the circumstances of a case and to try to secure an effective order. I believe that that proposal is worth considering. Both in this case and in others that I have dealt with involving the Child Support Agency, there is far too much evidence of orders being made, sent out, never acted on, never enforced and, above all, never paid.

4.13 pm

The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt): I congratulate my hon. Friend the Member for Wrexham (Ian Lucas) on securing the debate. Obviously, the subject matter is of concern to him and is extremely important to his constituent, Mrs. Paice, whom he has served well by bringing the matter to my attention in this manner. I welcome the opportunity that the debate gives me to try to help in this particular case, subject naturally to some constraints on what I am able to say. If there is time, I shall also comment on some wider child support issues, and set out some of the steps that the Government hope to take to deal with the more substantive points illustrated by Mrs. Paice’s case.

The case underlines the reasons for the Government’s conclusion that the current operation of the CSA is inadequate. That is why we have agreed to put an improvement plan in place immediately, and why we have asked Sir David Henshaw to review how we might deal with child support issues in the longer term. I shall talk about that review, if time permits.

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My hon. Friend has raised questions about the policy for implementing deduction from earnings orders against people in the armed forces. To make policy work, child support legislation must link with other legislation, and that applies in relation to those who serve in or have served in the armed forces. To support the Child Support Act 1991, amendments were required to the Army Act 1955, the Air Force Act 1955, the Naval Forces (Enforcement of Maintenance Liabilities) Act 1947 and the Merchant Shipping Act 1970. In effect, the agency was given provision to recover maintenance through deductions from the pay of soldiers, airmen, sailors and merchant seamen.

The agency does not issue deduction from earnings orders against armed forces personnel because pay or allowances made to a non-resident parent as a member of Her Majesty’s forces are not defined as earnings for the purposes of child support legislation. Instead, the agency can request that the armed forces make deductions for child maintenance under armed forces law. That is known as a deduction from earnings request.

The order and the request are designed to work in precisely the same way and to treat service personnel and civilians equally. In cases in which full maintenance is not paid, the non-resident parent remains liable for any arrears, the money owed is not written off and the agency can either pursue the non-resident parent through other appropriate enforcement measures once it has a liability order to secure the debt, or it can impose a deduction from earnings order if the non-resident parent subsequently obtains civilian employment.

The agency is bound by forces regulations. If, in exceptional circumstances, armed forces personnel decide not to action the agency’s request to deduct the maintenance, it cannot impose the deduction from earnings request. However, as the individual remains liable for the maintenance and any arrears, the agency still has a range of other collection and enforcement powers to secure payment.

In the case that my hon. Friend has raised, the non-resident parent spent some time in the armed forces and paid child maintenance regularly, through a deduction from earnings request, until he left the armed forces last year. Regrettably, the deduction from earnings request was initially issued to the wrong forces payroll and had to be reissued. The relevant service then deferred its implementation for six weeks to give the non-resident parent the opportunity to pay voluntarily. All that resulted in cumulative delays of three months, but regular payments were then maintained by the non-resident parent.

Five months after he left the armed forces, the agency was able to trace him to a new civilian employer, and a deduction from earnings order was then imposed. Since he was reassessed as having a nil assessment, based on his reported low income, he has made regular contributions to his arrears through a deduction from earnings order. The agency is taking steps to improve its ability to trace non-resident parents in similar circumstances to those I describe, for example, by increasing its use of information held by the Inland Revenue.

I understand that my hon. Friend has specific concerns about the arrears owed to Mrs. Paice and the
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amount that is regularly paid by the non-resident parent. I am also aware that Mrs. Paice believes that the non-resident parent might have sufficient means to pay some of those arrears in a lump sum. Current legislation does not enable the agency to access any lump sum payments to non-resident parents until the payments are in their possession, and only then with the authority of a court.

The current deduction from earnings order has been calculated based on the information provided to the agency by the non-resident parent. However, the agency realises that the arrears arrangement will not recover the debt over a reasonable period. The agency will now ask the non-resident parent to increase the amount that he is paying towards the arrears. If that request is refused, given that the agency has already obtained a liability order for the arrears, it will swiftly explore the options for further enforcement action, such as the use of bailiffs.

In the light of recent cases in which deduction from earnings orders were not effective in recovering large sums over a reasonable period, the agency revised its internal guidance to make it clear that further enforcement action should be considered if arrears cannot be recouped sufficiently swiftly through a deduction from earnings order. The agency has been taking action to improve enforcement; for example, during 2005-06, 10,300 liability orders were granted, an increase from 7,200 in the previous year. The agency intends to build on that and deliver further improvements in line with the operational improvement plan announced to the House on 9 February.

To return to the case that my hon. Friend has raised, I understand that there has been some uncertainty about the agency ceasing to pursue the non-resident parent for regular maintenance. The agency records show that on 4 October last year, Mrs. Paice asked the agency to stop pursuing regular maintenance effective from 3 July 2005, the date that one of the qualifying children went to live with the non-resident parent. Written confirmation of that closure was sent toMrs. Paice and the non-resident parent on 8 November 2005. The correspondence made it clear that that decision would cease action to pursue maintenance in respect of both the qualifying children.

My hon. Friend’s letter to the agency on 6 December stated that Mrs. Paice did not want the case to be closed. The agency subsequently telephoned Mrs. Paice on 13 December to discuss her concerns and to let her know that it would look at her case to decide whether there were sufficient grounds for a revision of the closure decision. On 19 December the agency wrote to Mrs. Paice to inform her that there were not sufficient grounds for a revision, and therefore the case would remain closed.

I asked the agency to look at the matter again and as a result it has determined to overturn the original decision to close the case. In the agency’s view, upon re-examination, the records of the original telephone conversation with Mrs. Paice do not provide sufficient detail to determine whether she was invited to carry on her case in respect of her youngest child. The case will now continue as if it had never been closed.

My hon. Friend also asked whether I think that the case has been poorly handled. I have to say that I do—I agree with him. The case has not been handled in the manner that the agency’s clients should expect. The
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agency is currently moving from a process of complaint handling to one of client resolution. In line with that approach, and having acknowledged the errors that it has committed in respect of the case, the agency will do three things for my hon. Friend’s constituent.

First, it will consider whether Mrs. Paice has suffered a financial loss due to the delay in first contacting the non-resident parent after Mrs. Paice applied. If so, the agency will pay her redress to meet that loss. Secondly, in recognition of the poor handling of the case, the agency will award her a consolatory payment. Thirdly, and finally, the agency will identify the arrears that have built up as a result of its own errors and delays and will award Mrs. Paice an advance payment of those arrears.

I will be happy to meet my hon. Friend and an appropriate representative of the agency to go into further detail on the personal aspects of the case. Other matters that he has raised are probably better dealt with in that way rather than in a public forum. I happily extend that invitation to my hon. Friend and to others whom it would be relevant to include.

The bigger question is what we should do about child support generally. This case has highlighted some possible procedural issues involving the agency, and the difficult and sensitive nature of child support. Following the review carried out by the chief executive of the agency, Stephen Geraghty, we concluded that the present child support system is incapable of delivering the outcomes that we desire for child support. The problems are not only in the operations of the agency; they are in the legislative framework that supports it—

4.24 pm

Sitting suspended for a Division in the House.

4.39 pm

On resuming—

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Mr. Plaskitt: I shall begin to conclude again,Mrs. Anderson.

We announced on 9 February that we have askedSir David Henshaw to consider the redesign of the whole child support system. In his speech, my hon. Friend the Member for Wrexham mentioned the suggestion from One Parent Families. I know that the organisation has met with Sir David, and I hope that it has put that idea to him, because it is certainly interesting. Sir David is gathering a range of ideas and will report to us later in the year.

Stephen Geraghty’s review of the operations of the agency also identified a number of areas where improvements can be made in the short to medium term. That has formed the basis of the agency’s operational improvement plan, which sets out how performance in client service will be improved over the next few years. We are investing an additional£120 million over the next three years to implement the plan. Of that, £90 million will support the recruitment of more staff and the deployment of more agency people to client-facing processing work and enforcement activity. We will also work to improve the agency’s ability to trace non-resident parents through the use of data from credit reference agencies and Her Majesty’s Revenue and Customs. We have also set aside £30 million of the investment to allow private debt collection agencies to recover over £100 million more of historic debt during the period of the plan. Work has already begun to introduce the improvements, and it will continue while Sir David constructs his redesign.

We know that there are problems with the child support system, but it is now time to learn the lessons from the past and to create a new system to ensure that parents meet their responsibilities to support their children and do not have to endure the shortfallof service that my hon. Friend’s constituent has experienced. As we have frequently said, relationships may end, but responsibilities do not.

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