BILL OVERVIEW

57.     The Bill consists of 5 Parts:

Part 1 - The Child Maintenance and Enforcement Commission.

Part 2 - Transfer of Child Support Functions etc to the Commission.

Part 3 - Child Support etc.

     Removal of compulsion for benefit claimants

     Maintenance calculations

     Collection and enforcement

     Debt management powers

     Miscellaneous

Part 4 - Lump sum Payments: Mesothelioma etc.

Part 5 - General

TERRITORIAL EXTENT

58.     Most measures in this Bill extend to England and Wales and Scotland, but not to Northern Ireland. Although child support legislation is a transferred matter under the Northern Ireland Act 1998 and Northern Ireland has its own body of social security, there is a long standing policy of parity in this area.

59.     The following measures extend to the United Kingdom:

• paragraphs 4 to 6 of Schedule 6, and clause 39 so far as relating to those paragraphs. These measures provide information gateways to:

60.     Any amendment or repeal made by this Act has the same extent as the enactment to which it relates.

61.      There are no matters dealt with by the Bill which would require a Sewel motion in the Scottish Parliament. Because the Sewel Convention provides that Westminster will not normally legislate with regard to devolved matters in Scotland without the consent of the Scottish Parliament, if there are amendments relating to such matters which trigger the Convention, the consent of the Scottish Parliament will be sought for them.

TERRITORIAL APPLICATION: WALES

62.     The Bill does not contain any measures which affect the powers of the National Assembly for Wales.

COMMENTARY ON CLAUSES

Part 1: The Child Maintenance and Enforcement Commission

Clause 1: The Child Maintenance and Enforcement Commission

63.     Clause 1 provides that there will be a new body corporate called the Child Maintenance and Enforcement Commission but referred to as 'the Commission'. The clause also introduces Schedule 1 which sets out in more detail how the Commission will be structured.

64.     The Commission will comprise a board consisting of a Chair, a chief executive to be known as the Commissioner for Child Maintenance, executive directors and non-executive directors.

Clause 2: Objectives of the Commission

65.     This clause sets out the main objective of the Commission which is to maximise the number of effective child maintenance arrangements in place. This main objective is supported by two subsidiary objectives:

• to encourage and support parents to make and keep their own maintenance arrangements; and

• to support the making of applications for child support maintenance under the Child Support Act 1991 and to enforce maintenance arrangements made under that Act where appropriate.

66.     Subsection (3) requires the Commission to aim to pursue and to have regard to its objectives, when exercising a function that is relevant to them.

Clause 3: Functions of the Commission: general

67.     This clause sets out that the Commission has functions relating to child support transferred to it from the Secretary of State, and any other functions conferred under this Bill or other legislation.

68.     Subsection (2) provides the Secretary of State with a regulation-making power to add further functions, should they be required in assisting the Commission to meet its objectives.

69.     Subsection (3) requires the Commission to exercise its functions effectively and efficiently.

Clause 4: Promotion of child maintenance

70.     This clause places a duty on the Commission to take such steps as it considers appropriate to raise awareness among parents of the importance of taking responsibility for the maintenance of their children and if they live apart, making appropriate maintenance arrangements.

Clause 5: Provision of information and guidance

71.     Clause 5 places a duty on the Commission to provide relevant information and guidance to help establish effective and appropriate maintenance arrangements for children who live apart from one or both of their parents. The clause also enables the Commission to provide information for other purposes in the course of providing such information and guidance which might include, for example, information on other matters relating to parental separation such as housing or employment.

Clause 6: Fees

72.     Clause 6 gives regulation-making powers to the Secretary of State to enable the Commission to charge fees in connection with the exercise of its functions.

73.     Subsection (2) of the clause gives a non-exhaustive list of provisions that may be included in regulations. These includes:

• when a fee may be charged;

• the amount of fee to be charged;

• the information required to determine the amount to be charged;

• who is liable to pay any fee charged;

• when a fee is payable;

• recovery of fees charged; and

• when a fee may be waived, reduced or repaid.

74.     Subsection (3) provides that the regulations may permit the Commission to charge fees which are not related to the cost to it of carrying out their functions.

75.     Subsection (4) provides that the Secretary of State may by regulations make provision for a person affected by a decision of the Commission under regulations under subsection (1) to have a right of appeal against the decision to an appeal tribunal.

76.     Subsection (5) provides that regulations under subsection (4) may include:

• provision with respect to the period within which a right of appeal under the regulations may be made; and

• provision with respect to the powers of an appeal tribunal in relation to an appeal under the regulations.

77.     Subsection (6) requires the Commission to pay into the Consolidated Fund any amount which it receives in fees.

Clause 7: Agency arrangements and provision of services

78.     This clause enables the Commission to make arrangements with a Government department or prescribed public body (defined as a "relevant authority" in subsection (4)), for the functions of one of them to be exercised on their behalf by the other, or for one to provide administrative, professional or technical services to the other.

79.     Subsection (2) makes clear that this does not include functions in relation to making, confirming or approving secondary legislation.

80.     Subsection (3) enables the Commission to agree the terms and conditions that it considers appropriate for any arrangements under this section.

Clause 8: Contracting out

81.     This clause enables the Commission to contract out any of its functions to another person or organisation. In doing so, the Commission can authorise the extent to which the function is carried out, and the period of time the contract should last. Contracting out a function does not prevent the Commission from exercising it.

82.     Where a contractor is carrying out a function on behalf of the Commission, subsection (4) ensures that its acts or omissions will be treated as acts or omissions of the Commission and the Commission will be responsible.

83.     Subsection (5) sets out two exceptions to this:

• A contractor's act or omission will not be treated as being an act of the Commission if it is relating to the contract between the Commission and the contractor itself. This ensures that, for example, if a contractor breaches the contract by failing to do something, or doing something they should not, the contractor remains responsible and the Commission will be able to sue for breach of contract.

• The contractor will remain liable if it commits a criminal act.

84.     Subsection (6) ensures that a person who is authorised to carry out a function on behalf of the Commission has a right to claim damages or compensation for repudiation of the contract if the Commission withdraw their authorisation thereby making it impossible for the contractor to perform.

Clause 9: Annual report to the Secretary of State

85.     This clause requires the Commission to produce a report for each financial year (to 31 March). The report must:

• deal with the activities of the Commission in the financial year for which it is prepared; and

• include the report prepared by the non-executive functions committee.

86.     Subsection (3) sets out the activities that should be covered in the report as follows:

• the strategic direction of the Commission and how this is being monitored and reviewed;

• the objectives and targets of the Commission, what steps have been taken to meet them and the extent to which they have been met;

• how performance of the Commission has been monitored; and

• the extent to which the Commission has contracted out its functions.

87.     Subsections (4) and (5) require the Commission to publish the report and send it to the Secretary of State to be laid before Parliament.

Clause 10: Directions and guidance

88.     This clause provides that the Secretary of State may give written guidance and directions to the Commission regarding the exercise of its functions.

89.     Subsection (2) requires the Commission to have regard to any guidance given, and also to comply with directions.

90.     Subsections (3) and (4) provide that guidance and directions given under this clause should be in writing and can be varied or revoked by the Secretary of State.

Clause 11: Supplementary provisions

91.     Clause 11 sets out the definition of 'child' for the purposes of Part 1 (the same as for the 1991 Act) and makes provision for the Secretary of State to make regulations about when a child is to be regarded as living apart from a parent or not, to ensure, for example, that a child is not regarded as living apart from a parent simply because they are at boarding school.

Part 2 - Transfer of child support functions etc. to the Commission

Clause 12: Transfer of child support functions

92.     This clause transfers most of the functions under the Child Support Act 1991 from the Secretary of State to the Commission, including functions relating to, for example, calculation, collection and enforcement. The exceptions to this (the functions that will either remain solely with the Secretary of State, or be exercisable both by the Secretary of State and the Commission) are listed at subsection (2). These are:

• Functions under section 23A, 24 and 25 which enable the Secretary of State to appeal to the Child Support Commissioner. It is appropriate for the Secretary of State to retain the right to appeal as he is responsible for child support legislation. This is why Schedule 2 of this Bill ensures that this function is both given to the Commission and retained by the Secretary of State.

• Functions under section 46, under which the Secretary of State may apply a reduced benefit decision to those parents with care in receipt of a prescribed benefit who choose to opt out of the statutory scheme without good cause. The Secretary of State is to retain this function because it relates to decisions on the amount of benefit a person is to receive. This function will be repealed soon after the introduction of the Commission.

• The function under section 50(7)(c) which enables the Secretary of State to authorise a 'responsible person' for the purposes of disclosure of information. This is necessary to enable the disclosure of information between the Secretary of State and the Commission. Schedule 6 of this Bill ensures that this function is exercisable by both the Commission and the Secretary of State.

• Functions under section 58 which provides a power for the Secretary of State to commence the provisions of the Act and to make consequential amendments.

• The function under paragraph 2A of Schedule 4 which enables the Secretary of State for Scotland to provide travel expenses for a person attending proceedings before a Child Support Commissioner in Scotland. As this function refers to the Secretary of State for Scotland it will not be transferred to the Commission.

• Power for the Secretary of State to make regulations under any other provision of the Child Support Act 1991.

93.     Subsection (3) transfers any functions conferred on the Secretary of State by those provisions of secondary legislation listed in Schedule 2 apart from those related to reduced benefit decisions under section 46 of the Child Support Act 1991.

94.     Subsection (4) introduces Schedule 3 which makes consequential amendments and transitional provision and savings.

Clause 13: Transfer of employees

95.     This clause ensures that when the functions transfer to the Commission, those people employed by the CSA and carrying out those functions will also transfer to the Commission, and that their terms and conditions will be protected under the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE") as modified by the clause.

96.     Subsections (2) and (3) modify the TUPE regulations to ensure that TUPE provision for recognition of trade unions applies to the transfer. This will ensure that trade unions representing CSA staff which are recognised by the Secretary of State will be recognised by the Commission and allows for the agreed scope of a trade union's recognition to be amended, or the recognition removed, in accordance with recognised procedures.

97.     Subsection (4) prevents the application of regulation 10 of TUPE which would exclude occupational pension rights from the rights transferred. This is to allow people being transferred to retain entitlement to the Principal Civil Service Pension Scheme ("PCSPS").

98.     Subsection (5) provides the Secretary of State with an order-making power to exclude some people from transferring under TUPE terms, for instance contractors providing a service to CSA at the time of transfer. Any order made under this power is to be subject to the negative resolution procedure.

Clause 14: Transfer of property, rights and liabilities

99.     This clause enables the Secretary of State to make one or more schemes to transfer property, rights and liabilities which he is entitled or subject, in connection with the transferred functions, or under arrangements entered into in preparation for the coming into force of the Commission's functions under Part 1 of this Act.

100.     Subsection (2) stipulates that the Secretary of State will not be able to transfer rights and liabilities under employment contracts through such a scheme, as clause 13 deals with these matters.

101.     Subsection (3) sets out that a transfer scheme may:

• provide for the transfer of property, rights and liabilities that it would not otherwise be possible to transfer, for example, a contract which does not contain a clause allowing it to be assigned;

• create for the Secretary of State interests in or rights over property transferred by virtue of the scheme. For example, it enables any property that may transfer to the Commission to continue to be used by the Secretary of State;

• create for the Commission, interests in or rights over property retained by the Secretary of State. Such a scheme could enable the Commission to make use of a property that the Secretary of State may own;

• create rights and liabilities between the Secretary of State and the Commission, for example, if a contract were transferred to the Commission, the scheme could allow for the Commission to be indemnified by the Secretary of State in respect of previous breaches; and

• make such supplementary, incidental, consequential or transitional provision or savings as the Secretary of State considers appropriate.

102.     Subsection (4) provides that a transfer scheme shall come into force in accordance with the terms provided by the transfer scheme itself.

103.     Subsection (5) provides that a certificate given by the Commission will provide evidence that any property, rights or liabilities have been transferred

104.     Subsection (6) defines 'transferred functions' as those functions transferred under section 12.

Part 3 - Child Support etc.

Removal of compulsion for benefit claimants

Clause 15: Repeal of sections 6 and 46

105.     Clause 15 repeals sections 6 and 46 of the Child Support Act 1991.

106.     Section 6 of the Child Support Act 1991 provides that parents with care who make a claim for, or are in receipt of, prescribed benefits, may be treated as making an application for child support maintenance. Paragraph (1) of Clause 15 removes this power.

107.     Section 46 of the Child Support Act 1991 gives power to the Secretary of State to reduce the amount of benefit parents with care receive where they are treated as having applied for a maintenance calculation under section 6 of the Child Support Act 1991, and they choose to opt out of the scheme without good cause for doing so. Paragraph (b) of Clause 15 removes this power, which will become redundant when section 6 is repealed.

Maintenance calculations

Clause 16: Changes to the calculation of maintenance

108.     This clause introduces Schedule 4 which amends legislation regarding how maintenance calculations are performed. Changes to how maintenance is calculated include:

• A move from using net to using gross weekly income to determine maintenance liability. Information required to calculate maintenance will be taken directly from HMRC instead of the non-resident parent.

• Changes to the percentages used to calculate basic rate maintenance.

• Treating certain existing child maintenance obligations which fall outside of the statutory scheme, as though they were within the scheme, for the purposes of calculating liability.

• An increase in flat rate maintenance from £5 to £7 per week.

Clause 17: Power to regulate supersession

109.     This clause replaces subsections 17(2) and 17(3) of the Child Support Act 1991. Section 17 allows a maintenance decision to be superseded by a new decision, where, for example, there has been a change of circumstances.

110.     These changes provide a regulation-making power to Secretary of State in relation to the supersession of decisions.

111.     New subsection (3) sets out that regulations may include:

• Provision about the cases and circumstances in which a decision may be superseded, which may include a restriction on superseding a decision as a result of certain changes of circumstance. This change enables the introduction of fixed term annual awards, where a change in circumstance will only be actioned during the year if there has been a large change in income, or where the change is fundamental to the maintenance calculation. This will also enable regulations to contain provisions which set out the circumstances in which earlier changes of circumstances (which had not led to a supersession) can be taken into account.

• Procedural aspects of supersessions.

Clause 18: Transfer of cases to new rules

112.     This clause introduces Schedule 5 which makes provision for the movement of existing cases onto the new calculation rules. The Commission may require the parties in existing cases to choose whether to remain in the statutory scheme under the new calculation rules or to leave the scheme as far as future liability is concerned.

Collection and enforcement

Clause 19: Use of deduction from earnings orders as basic method of payment

113.     Clause 19 concerns section 29 of the Child Support Act 1991, which sets out provisions for the collection of child support maintenance. Subsection (3)(b) of section 29 provides the Secretary of State with the power to make regulations as to the method by which payments of child support maintenance should be made.

114.     This clause inserts new subsections (4) and (5) into section 29 of the Child Support Act 1991 to make it clear that such regulations can include deduction from earnings orders as an initial method of collection. The intention is to pilot the use of deduction from earnings orders as a primary method of collection for employed non-resident parents.

115.     New subsection (4) requires that any regulations which allow deduction from earnings orders to be used as an initial method of collection also include provision that this method should not be used where there is good reason not to use it. The regulations must also include a right of appeal to a magistrates' court (or, in Scotland, to the sheriff) against a decision that there is no good reason not to use a deduction from earnings order to collect maintenance.

116.     New subsection (5) enables regulations to set out what matters should be considered (or not considered) in determining whether there is a good reason not to use a deduction from earnings order as an initial method to collect maintenance. For example, the regulations could provide that there would be a good reason not to use a deduction from earnings order if doing so could compromise the employment status of a non-resident parent, or raise privacy issues. It also enables regulations to prescribe circumstances in which a good reason not to use a deduction from earnings order does, or does not, exist.

Clause 20: Deduction from earnings orders: the liable person's earnings

117.     This clause replaces subsection (8) of section 31 of the Child Support Act 1991, and inserts a new subsection (9). The intent of the change is to define what will be considered as 'earnings' for the purpose of deduction from earnings orders.

118.     Section 31 of the Child Support Act 1991 concerns deduction from earnings orders, and the existing subsection (8) provides that 'earnings' has such meaning as may be prescribed.

119.     The definition in the new subsection (8) will include the following as earnings:

• wages or salary;

• payments by way of pensions including any annuity payable for the purpose of providing a pension;

• periodical payments which are compensation for loss of employment or reduced remuneration; and

• statutory sick pay.

120.     The impact of this change is that all pension payments, whether as a result of a private or occupational pension scheme, will be included as earnings for the purposes of deduction from earnings orders.

121.     The new subsection (9) sets out that for the purposes of sections 31 and 32 of the Child Support Act 1991, any person paying a sum covered by new subsection (8) to a liable person should be treated as their 'employer'.