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General Committee Debates
Child Maintenance and Other Payments Bill

The Committee consisted of the following Members:

Alexander, Danny (Inverness, Nairn, Badenoch and Strathspey) (LD)
Boswell, Mr. Tim (Daventry) (Con)
Clapham, Mr. Michael (Barnsley, West and Penistone) (Lab)
David, Mr. Wayne (Caerphilly) (Lab)
Dorries, Mrs. Nadine (Mid-Bedfordshire) (Con)
Engel, Natascha (North-East Derbyshire) (Lab)
Griffith, Nia (Llanelli) (Lab)
Harper, Mr. Mark (Forest of Dean) (Con)
Hesford, Stephen (Wirral, West) (Lab)
Jackson, Mr. Stewart (Peterborough) (Con)
James, Mrs. Siân C. (Swansea, East) (Lab)
McCarthy-Fry, Sarah (Portsmouth, North) (Lab/Co-op)
McGuire, Mrs. Anne (Parliamentary Under-Secretary of State for Work and Pensions)
Owen, Albert (Ynys Môn) (Lab)
Penrose, John (Weston-super-Mare) (Con)
Plaskitt, Mr. James (Parliamentary Under-Secretary of State for Work and Pensions)
Rowen, Paul (Rochdale) (LD)
Selous, Andrew (South-West Bedfordshire) (Con)
Touhig, Mr. Don (Islwyn) (Lab/Co-op)
Turner, Dr. Desmond (Brighton, Kemptown) (Lab)
Weir, Mr. Mike (Angus) (SNP)
Chris Shaw, Committee Clerk
† attended the Committee
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Public Bill Committee

Thursday 11 October 2007


[David Taylor in the Chair]

Child Maintenance and Other Payments Bill

9.10 am

The Chairman: Good morning. I want to place on the record the service of Chris Chope, who has chaired so many sittings. He is retiring hors de combat, and I shall be in charge for the remainder of the Bill’s passage in Committee.

Clause 17

Power to regulate supersession

Amendment proposed [9 October]: No. 118, in clause 17, page 7, line 32, at end insert—

‘(aa) make provision that where there is a change in circumstances of the non-resident parent, the Commission shall make a fresh assessment if the gross income position of the non-resident parent increases or decreases by 10 per cent. from the gross income figure fixed by the calculation currently in force.’.—[Andrew Selous.]

Question again proposed, That the amendment be made.

The Chairman: I remind the Committee that with this we are taking amendment No. 124, in clause 17, page 7, line 32, at end insert—

‘(aa) make provision to include that where there is a change in circumstances of the non-resident parent, the Commission shall review maintenance arrangements if the gross income of the non-resident parent has increased by greater than 25 per cent. or decreased by greater than 10 per cent. from the gross income figure fixed by the calculation currently in force;

(ab) make provision for supersession in circumstances in which updated income information is provided to the Commission and the maintenance calculation currently in force has been calculated using historic tax year information held at Her Majesty’s Revenue and Customs.’.

When the Committee adjourned on Tuesday evening, the Minister had replied to the debate and had invited Mr. Selous to withdraw amendment No. 118.

Andrew Selous (South-West Bedfordshire) (Con): I do not intend to withdraw the amendment. I have listened carefully to many of the Minister’s explanations of previous amendments and have been convinced by them. However, I am not in this case. Given that we are going down the voluntary agreement route and using prior year Her Majesty’s Revenue and Customs’ data, it is not unreasonable for there to be a 10 per cent. rather than a 25 per cent. variation in income. If we fail to take such action outlined in the amendment, it will lead to unfairness that will undermine the commission’s chance of success.

Question put, That the amendment be made:—

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The Committee divided: Ayes 4, Noes 10.
Division No. 11]


Boswell, Mr. Tim

Harper, Mr. Mark

Jackson, Mr. Stewart

Selous, Andrew

Clapham, Mr. Michael

David, Mr. Wayne

Engel, Natascha

Griffith, Nia

Hesford, Stephen

James, Mrs. Siân C.

McCarthy-Fry, Sarah

McGuire, Mrs. Anne

Owen, Albert

Plaskitt, Mr. James

Question accordingly negatived.

Question proposed, That the clause stand part of the Bill.

The Chairman: With this it will be convenient to discuss new clause 5—Information required by the Commission—

‘In section 14 of the Child Support Act 1991 (information requirements), after subsection (1A) insert—

“(2) Regulations under subsection (1) shall in particular require a person, who is subject to a change of circumstance which would result in a decision by the Commission to superseding an earlier decision under section 17 of the Act on non-resident parents, to furnish the Commission with information and evidence regarding the said change of circumstances within 42 days.”.’.

Andrew Selous: The new clause attempts to help the new commission by putting a requirement on non-resident parents to provide it with information and evidence within 42 days of a change of circumstances. It is fairly obvious that non-resident parents will have a pretty big incentive to let the commission know straight away that there has been a greater than 25 per cent. reduction in their income in order to have their assessment reduced. However, without the provisions of the new clause, there would be no corresponding duty—certainly no incentive—on, for example, new resident parents to make sure that they alert the commission to the fact that their income has increased by more than 25 per cent., as a result of which money would not flow through to the children concerned as it should do.

We discussed addresses earlier and, if clause 17 were able to encompass the necessity for non-resident parents to provide a relevant address, I hope that the Minister will consider the matter in that light. He showed sympathy for the need for non-resident parents to provide addresses, as enforcement measures cannot easily be taken if their whereabouts are not known. I look forward to hearing what he has to say.

The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt): I welcome you to the Chair, Mr. Taylor, and I endorse your thanks to Mr. Chope for chairing the Committee prior to your arrival.

I thank the hon. Member for South-West Bedfordshire for tabling the new clause. He introduced it by saying that it would help the commission. I am not sure that it would, and I shall explain why. However, before I do so, I return to the issue of addresses and repeat what I said:

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we are certainly looking at making address changes and the reporting of them to the commission a requirement. His point was perfectly valid.

Unfortunately there will be difficulties with the requirement that the hon. Gentleman is asking us to consider. It is unlikely that the person would always know whether a change in their circumstances affected their maintenance liability enough to trigger a supersession. Similar difficulties exist in relation to the 1993 and 2000 maintenance schemes. The person would not always know whether the changes amounted to more than the relevant tolerance level.

If the requirement that the hon. Gentleman seeks was introduced, the commission would provide clients with guidance at the outset of their claim, but doubt would still remain. The person could end up committing an offence possibly without knowing it. The commission would, like the agency before it, be inundated with notifications of changes. Parents would be unsure what changes to report, and a high proportion of those changes would have no effect on the level of maintenance payable, but they would still have to be investigated by the commission.

Therefore, under the amendment, the commission would be continually processing reported changes. There have been 5 million reported changes since the new scheme came into operation. That is 145,000 a month. We have to get the level of intervention down to give the commission a chance. Instead, maintenance liabilities will be kept up to date by way of an annual review. As part of that review, the income figures provided by HMRC will be updated to those of the latest available tax year. That will mean that assessments will be kept more up to date than is often the case now. Many maintenance calculations in force at the moment are still based on income information that was provided at the time of the original application. That will no longer be the case.

At the time of the review, parents will get the opportunity to report any other changes that have occurred. It should be noted that the amendment would be unenforceable without an appropriate sanction to back it up. Further, the commission could apply a sanction only once it became aware that an unreported change had occurred. That would be at an indeterminable point in time after the event. Therefore, given all of those difficulties, I hope that the hon. Gentleman will not press the new clause to a Division.

Andrew Selous: I have listened to the Minister. However, with the introduction of voluntary agreements, it is not a fair comparison to point out the number of current notifications and say that it will be the same going forward. I assume that Child Maintenance and Enforcement Commission will have less business than the current Child Support Agency. If the information is not provided, or forced to be provided, during the course of the year, some children will undoubtedly not get the increase in child maintenance that they should receive. However, I am not blind to the practical difficulties that the Minister mentioned and I am prepared not to press the new clause to a Division.

Question put and agreed to.

Clause 17 ordered to stand part of the Bill.

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Clause 18

Transfer of cases to new rules

Mr. Mike Weir (Angus) (SNP): I beg to move amendment No. 91, in clause 18, page 8, line 2, at beginning insert—

‘(1) All cases being dealt with under existing rules shall be transferred to the new maintenance calculation rules no later than twelve months after the coming into force of this Act.’.

I shall not detain the Committee long, but the amendment is important. With the introduction of CMEC, at least three different methods of calculating income will be running at the same time: the original system, which many of our constituents are still on; the so-called new system introduced in 2000; and the new CMEC system. That will add to confusion and error and will not give CMEC the chance to have a real break from the past difficulties of the CSA.

Like me, many hon. Members will have a large number of constituents—usually absent parents—coming into their surgeries complaining that they have not been transferred or “migrated” to the new rules introduced seven years ago. Everyone was supposed to have migrated four years ago. We have all had to explain that that did not happened because of the failure of the IT system. The effect has been that two people in identical circumstances—in the case of parents with care—can receive vastly different amounts depending on the date on which their case entered the system. That is patently unfair and has led to a great deal of bitterness among those in the system. It seems that the basic starting point of any redesign of the system must be that it is transparent, fair and accepted by those whom it will affect. I concede that that last point will probably be a hope too far in many cases, but it seems sensible to try to ensure that it has the greatest possible acceptance. To do so, we must ensure that everyone is treated in the same way by the system, and that will not be achieved unless everyone is on the same system of calculation and are seen to be treated the same.

There are also practical problems. I understand that the Public and Commercial Services Union has expressed concern about how agency staff will be able to deal with the three systems running concurrently. I am also concerned about how any migration will be handed. That matter was canvassed in our first evidence-taking session, at which Lord McKenzie said:

    “The journey for somebody on the original system will be that when section 6 goes, they will have a choice whether to stay in, but there will not be an opportunity to transfer to the current system. There will be an opportunity to transfer to the new system during the process of transferring cases between 2010 and 2013. By March 2013, we will have one system, one basis of assessment and one client case load on that system. If they wish to stay in the system in the interim, it will be on the old basis.”——[Official Report, Child Maintenance and Other Payments Public Bill Committee, 17 July 2007; c. 26.]

It is not entirely clear who can request the choice to be in or out of the system, but logically it will only take place if the parent with care wants it to. That is a dangerous way to proceed because the parent with care effectively has a veto over it, perhaps for understandable reasons. I appreciate that many parents with care will not want the case to migrate because they may receive less money. However, giving them an effective veto over the transfer of cases will undoubtedly lead to a great

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deal of friction between the parties and will do nothing to help in what may already be difficult circumstances.

It is interesting that, in Tuesday’s debate on schedule 4, the Minister made it clear that the percentage for deductions that were included in the Bill were chosen to ensure that the financial effect of the CMEC rules will have the same effect on the absent parents as the so-called new rules under the current arrangement; there would not be a greater financial penalty. That is sensible in dealing with the system, but it also highlights the difficulty with those who are still being assessed on the old rules, since no attempt has been made to put them on the same basis, and that may well lead to a heightening of the sense of injustice that they feel.

I note from the evidence-taking session that it will be 2013 before cases are migrated. With the best will in the world, and considering previous experience, it is highly likely that that time scale will slip. After all, everyone should have been on the new system some years ago. That means that the current unfairness within the system will continue for at least another seven years and probably sometime thereafter. Lord McKenzie accepted that point to some extent when he said:

    “I accept that that leaves a number of years in which there are still difficulties, and in which people will feel aggrieved because they are trapped in the old system. Their only route out is to go out of the system altogether, but that will not necessarily be right for everybody.”——[Official Report, Child Maintenance and Other Payments Public Bill Committee, 17 July 2007; c. 27.]

Certainly, most people who are paying will not be able to get out of the system because, with the best will in the world, a change is likely to take place only if the parent with care agrees to it. I suggest that the situation is worse than envisaged and the continuation of three different systems with vastly different outcomes will undermine efforts to have a new beginning for child maintenance. Indeed, the more cynical may feel that those who are still on the old rules will be dealt with simply by the passage of time—by the time that the case that is on the old rules is migrated, the children may well be out of the system, given the length of time it takes for that to happen. That is not the way to proceed.

I am sure that the Minister will tell me that 12 months is far too short a time scale, but I would be interested to hear his views. I think that that is a fundamental problem with the system. We do not have fairness within the current system because of the differing rules. That unfairness will be heightened by the introduction of CMEC and will lead to the same difficulties that we have with the CSA, where parents feel aggrieved when their workmates receive totally different payments than they do, even though their circumstances can be almost identical.

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Prepared 12 October 2007