Select Committee on Work and Pensions Fourth Report

 
 

 
2  Private arrangements

12. The main emphasis of the changes outlined in the White Paper is to move away from a state-run service towards one of private arrangements. One of the principles of reform set out in the White Paper is to:

"promote parental responsibility by encouraging and empowering parents to make their own maintenance arrangements wherever possible"[12]

13. We received evidence on a number of issues related to this aspect of the proposals, including the sources of advice for parents under the new arrangements, the extent of the involvement of the courts, whether private arrangements should be registered and how they would be monitored, how the money would be collected and what will happen if non-resident parents do not comply.

14. There is a concern with the Government's optimism over the numbers of parents who would want to make private arrangements. One Parent Families said:

"It remains to be seen how many parents with care, who currently are required to use the CSA because [they are] on benefit, will use C-MEC when given the choice. The indications are that a substantial proportion will still choose to do so. When parents with care using the CSA were asked in 2001 if they would continue to do so if given the choice, 48% of them said they would stick with the Agency (compared to 20% of non-resident parents).[13] We would warn against too optimistic a view of the reductions in caseload as a result of parents with care deciding they do not need C-MEC's services in future."[14]

Adding:

"There is a suspicion that the principle of 'encouraging and empowering parents to make their own arrangements wherever possible' may be based, not on what is in the best interests of parents looking after children, but because it makes business sense for the new government child support service."[15]

And:

"that policy makers are in danger of making a similar mistake as happened when the CSA was established, in being over-optimistic about the extent to which non-resident parents will cooperate in attempts to persuade them to pay child maintenance - and underestimating the extent to which a culture of non-compliance exists among non-resident parents. It would be a grave mistake if a disproportionate amount of money and effort were diverted into encouraging and managing private arrangements, at the expense of running an effective and efficient statutory system focused on delivering adequate levels of child maintenance on a regular basis to children in separated families."[16]

POWER BALANCE

15. The following table from a quantitative survey by the National Centre for Social Research (NatCen) on behalf of the DWP shows that whereas 11% of non-resident parents would move to private arrangements (through maintenance direct (MD): this involves the non-resident parent making payment direct to the parent with care based on a CSA assessment but without CSA supervision) the equivalent proportion amongst parents with care is just 4%.[17]

Figure 1: Likelihood of newly assessed CS clients moving to MD, by whether PWC/NRP
  Newly assessed PWCs using CS %  Newly assessed NRPs using CS %  All newly assessed clients using CS %  
Very or fairly likely to move to MD  11  
Not very or not at all likely to move to MD  93 80  86 
Don't know if would move  10  
All newly assessed clients who received or paid child maintenance and were using CS.  

Source: DWP Research Report 404

16. The reasons that parents with care cite for being unhappy with private arrangements are given in the same report as being:[18]

Figure 2: Barriers perceived by PWCs when thinking about using MD
 All PWCs using CS %  
Wouldn't feel sure I'd get paid at all  68 
Bad relationship/ don't trust ex-partner  61 
Wouldn't feel sure I'd get paid the right amount of money  52 
Wouldn't feel sure I'd get paid on time  52 
Don't want direct contact with ex-partner  35 
CSA wouldn't chase up payments  33 
Wouldn't have proof of non-payment  33 
Wouldn't want to cut off contact with CSA  16 
Will remain on/go on to benefits  
Happy with arrangement as it is  
Easier to have it taken from wages  
Don't know where ex-partner is  
Other 2  
At least one barrier cited  96 
Nothing would make it difficult  

Source: DWP Research Report 404 Note: Percentages do not sum to 100% as respondents could give more than one reply

17. In comparison, current maintenance direct customers gave the following reasons for using private arrangements:[19]

Figure 3: Reasons given for choosing MD (PWCs)
 Newly assessed PWCs %  Newly assessed NRPs % 
Seemed more straightforward  53 67  
Ex-partner wanted to use this method  29 19  
Didn't need CSA involvement  24 36  
Similar to previous private arrangement  15 26  
Didn't want CSA involvement  10 19  
Wasn't given a choice  5  
CSA suggested it 2  
Other reason 3  
All PWCs and NRPs using MD who were aware of alternative payment method at time of assessment  

Source: DWP Research Report 404

18. The qualitative report on maintenance direct by NatCen found that: the advantages to private arrangements were their flexibility: the scope for varying the level, timing and frequency of maintenance payments; the ability to decrease their payment level temporarily for example during a holiday when they looked after the children more then usual; and the potential to negotiate a balance between money paid to the ex-partner and money or items given directly to the children. The other main reasons were the simplicity of not needing to involve a third party and efficiency as there would be no delay in payments from when the non-resident parent paid them to when the parent with care received them.[20]

19. However, the report also found:

"Some parents had deliberately chosen to use MD so that they could set their own payment level, lower than that recommended by the CSA. Non-resident parents whose ex-partners were prepared to agree to a lower payment level had a clear financial incentive to use MD. The motivation of parents with care here was more subtle, with evidence that some were prepared to make a 'financial sacrifice' in order to maintain good relations within the family."[21]

A similar point was made in a report on the Scottish system of private agreements which found that many people felt they had made agreements under duress and had agreed to the terms as a means of avoiding or decreasing conflict.[22]

20. In addition the qualitative study stated that in cases before the CSA became involved:

"non-resident parents appear to wield a disproportionate amount of power over establishing financial arrangements following a separation."[23]

21. One Parent Families, commenting on the maintenance direct research, said that:

"The White Paper fails to acknowledge that what may seem advantageous to the non-resident parent about private arrangements: that they are flexible as to the level and timing of payments, and do not involve supervision from C-MEC, may be seen as potential disadvantages to the parent with care looking after the children: payments are not regular, are for lower amounts than the child support formula, and if not paid, do not result in immediate intervention by C-MEC."[24]

22. The Child Poverty Action Group (CPAG) expressed concern that "The move towards private arrangements may therefore shift the power balance against parents with care (predominantly women) in favour of non-resident parents (predominantly men)."[25]

23. The Government needs to recognise, in planning the provision of advice services and ensuring that these meet the needs of both parents, that parents making private arrangements may well not enjoy equal bargaining power, with the potential for such power imbalances to be reflected in the terms of financial arrangements. We also ask the Department to explain how the problems associated with the child maintenance system before the Child Support Act 1991 will not simply recur with the increased emphasis on private arrangements.

Advice services

24. The White Paper states that:

"the new child maintenance system will provide parents with better access to information and guidance when they separate and link them to high-quality support to enable them to make informed decisions."[26]

25. Duncan Fisher from Fathers Direct said:

"One has to see support services as an integral part of this whole reform process. They are a necessary part of bringing about the outcomes for children that we want from the system, so they are as important as the arrangements around collecting support and C-MEC."[27]

26. The White Paper suggests that:

  •   "Services will need to be built alongside, or as part of, other relevant information and guidance services on parental separation across government and the third sector, wherever sensible.
  •   Services need to be seen to be neutral and independent. There will be a major role for the third sector who have much to offer based on their current excellent work.
  •   Support on maintenance is best delivered alongside information on the other key issues that arise regarding parental separation."[28]

27. However, crucially, there are no details on who will provide this advice, how it will be paid for and what form it will take. When questioned on this issue the Secretary of State commented that:

"the detail of precisely who, what, how and when, that is work that is under way in the Department right now."[29]

TARGET GROUPS

28. The advice services will need to provide support to those parents involved in the 1.4 million cases which are currently registered with the CSA as well as those making new applications to C-MEC.

29. The White Paper details the breakdown of current child maintenance arrangements of eligible parents as being:

Figure 4:
Breakdown of child maintenance arrangements of eligible parents (per cent)  
CSA (benefit cases and non-benefit cases)  19 
Private arrangements  23 
Consent orders at court  
Combination of arrangements  
No arrangements 49  
Total 100  

From this evidence the White Paper notes that:

"Looking at the maintenance options reported by the current stock of eligible parents, it is clear that about half report that no arrangement is in place. In addition, many of those parents being dealt with by the CSA have ended up there as a result of a benefit claim, not through their own choice."[30]

30. One Parent Families told us that they supported:

"the proposal to abolish the requirement placed on parents with care to claim child support if claiming an out-of-work benefit."[31]

And noted the suggestion in the White Paper that Jobcentre Plus staff had a key role:[32]

"to identify parents with care who are not receiving maintenance and to make the case for seeking it, by whatever method - before sign-posting them to other sources of advice and assistance."[33]

However, they also made the point that not all of the lone parents who are without child maintenance are also necessarily in receipt of benefits and suggested:

"if the Government wants to increase the number of children in separated families for whom child maintenance is paid, the case for seeking child maintenance - by whatever means is most suitable - should be actively made to all lone parents whether in work or not, with advice and positive support to overcome any reservations they might have. At the same time, more needs to be done to positively engage with non-resident parents to persuade them that child maintenance matters for their children."[34]

And recommended that:

"the Government takes steps to actively monitor the impact of its proposed new policies to check whether it is being successful in increasing the number of children in separated families receiving maintenance."[35]

31. The Committee agrees that Jobcentre Plus has an important role in signposting lone parents to child maintenance advice services. However, by definition Jobcentre Plus will predominantly be dealing with lone parents claiming benefits. There will be other separating parents on low incomes with a need to have a child maintenance arrangement in place who will not necessarily have contact with Jobcentre Plus. The Government needs to find ways of reaching these other groups, such as low income separating parents in paid employment, to ensure that they are not at risk of being left without adequate child maintenance arrangements.

CURRENT CAPACITY OF ADVICE PROVISION

32. As noted previously the White Paper states that:

"Services will need to be built alongside, or as part of, other relevant information and guidance services on parental separation across government and the third sector, wherever sensible."[36]

33. The chart in Appendix Three, from a recent DWP research report on parents' attitudes towards child support reform, shows the services that already exist.[37]

34. Relate, a key service provider, thought that "CMEC should build on, and invest in, existing provision of such services within the voluntary sector, and look at ways in which this can enable national coverage of such services."[38] Parentline Plus told the Committee "a proven telephone based service already exists, it would be unwise to add yet another helpline to cater for parents facing divorce and separation."[39]

35. However, the report mentioned above also found that parents thought that current provision is:

"difficult to find out about, can be hard to access, and is very unlikely to provide the emotional support that is so important."[40]

36. Janet Allbeson from One Parent Families told the Committee:

"We did a report in 2004,[41] looking at advice services for lone parents which showed how patchy, fragmented and, really, inadequate provision is for all parents on marriage breakdown and relationship breakdown."[42]

37. She also highlighted the Government projects already working on the issue of relationship breakdown:

"Looking at the models that are out there from DCA and DfES, DCA does run very small-scale projects; some of them are pilots, in particular around resolving disputes on contact. Those are useful but they are fairly small scale. DfES has been trying to work towards something called Parents Direct.[…] DfES want to move towards having an overarching phone number where you will then be referred on to one of these specialist phone lines. That is fine up to a point but, really, the issue is the capacity of the organisations, and without any real funding to support that service - and what a lot of parents say they want is face-to-face, personal advice - it is not going to work."[43]

38. Mavis Maclean, Senior Research Fellow in the Faculty of Law, Oxford University, was unhappy about the potential expansion of current Government mediation projects into the provision of child maintenance advice: "there has been mention of the DCA Relationship Breakdown Programme which is designed to help parents in conflict over contact to resolve their problems. These programmes are not designed to help with financial issues."[44]

39. Citizens Advice were not confident that there was capacity in the current provision of conflict resolution:

"There are good examples of mediation services around the country and the voluntary sector provides some of it, but it is difficult to see the sort of expansion that is envisaged in the White Paper being achieved very easily."[45]

40. It would therefore seem that there is a considerable way to go to provide a national advice service. The Secretary of State admitted that his officials "are concerned about whether there is adequate capacity."[46]

FORM OF ADVICE

41. The White Paper acknowledges that:

"there is a preference among parents for telephone-based advice and face-to-face services."[47]

42. One Parent Families believed that:

"A proper child maintenance service needs a national infrastructure of services which can offer both one-off advice, but also informed and tailored information delivered face-to-face if desired, plus guidance and support, assistance and legal help as necessary to both parents. Each parent must have access to a service they feel they can trust to understand their needs. Inevitably, when resolving financial matters on separation, including the arrangement of child maintenance, there can be differing perspectives. Any service must recognise each parent's right to have access to their own separate adviser, so that no conflict of interest arises."[48]

43. Fathers Direct stressed that the advice services should be:

"well-marketed […] to where both men and women are - and they tend to find information in different places. The gender equality duty, which comes in in April, will impose a statutory requirement on any service that is contracted in by the state to be accessible equally to both men and women."[49]

A ONE-STOP SHOP

44. The DWP research report on parental attitudes to the child support reforms found that parents would prefer a one-stop shop where all services are provided:

"Parents found that there was a need for a single neutral information and support service […] Topics that this service should deal with include finances, mental and physical health, legal issues and practical advice."[50]

45. John Wheatley from Citizens Advice made the point:

"I think people will still regard the Child Maintenance and Enforcement Commission as the first port of call for advice and information. They will be a bit disappointed if they are told that they have to go somewhere else, particularly if it is only a website or a phone service to which they cannot get through."[51]

46. Janet Allbeson, from One Parent Families, told the Committee that advice could be useful in areas other than maintenance calculations but that this could be signposted:

"By all means, let us encourage couples to think about […] the options that are open to them, the amounts they could expect under C-MEC, the pros and cons, perhaps, of each one, information about what C-MEC can provide and, also, sign-posting them to other sorts of help, such as mediation. It has to be realised that on relationship breakdown there are a lot of other problems that parents have, to do with housing, to do with debt, and there is the whole issue of the legal rights arising from co-habitations and divorce."[52]

47. But witnesses also expressed worries over the potential independence of advice services and its association with the assessment and enforcement arms of C-MEC. Mavis Maclean told us:

"there is always the issue that parents will perceive any state agency or C-MEC-based advice as being partisan in some way or that there is some kind of conflict of interest; it is like asking a lawyer to advise both sides."[53]

48. Michelle Counley from the National Association for Child Support Action (NACSA) wanted to make sure that clients should be:

"able to approach these services without any fear that there is going to be an element of bias - 'You have got to go this way' or 'We need to take you that way'. There are a lot of concerns with the public and there is a lack of confidence as to what C-MEC may or may not be able to offer. The advice services out there have to have a degree of independence so that that information can be relayed clearly and concisely to the clients."[54]

49. John Wheatley from Citizens Advice warned of the potential problems if the advice services were also involved in making maintenance assessments:

"If it is taking maintenance assessments, […] that moves us into [a] different character and moves away from the perception of independence that the Government itself recognises is important in people's minds.[…] I think you would have to have distinct organisations."[55]

MEDIATION AND COUNSELLING

50. Our predecessor Committee recommended in its 2005 report that there should be closer coordination of services to help provide preventative and family support systems at an early stage of family breakdown.[56]

51. The Department's quantitative and qualitative research reports on 'maintenance direct' make a clear correlation between relations after a relationship breakdown and the payment of maintenance concluding:

"The central importance of parental relationships for the future of direct payment also raises the question of the proper roles of both state and voluntary sectors in helping parents to improve their relationships post-separation."[57]

52. Relate said:

"Most non-payments are down to the entrenched conflict between, and hurt and anger felt by, ex-partners as a result of the breakdown of their relationships. Dealing with these issues through targeted support will help parents put their children first, and develop long-lasting, flexible private agreements, without the need for expensive sanctions which will do little to improve children's well-being."[58]

53. Parentline Plus stated that:

"We understand that the DfES, working through CAFCASS, will be developing and rolling out local services and networks for separating parents. It will be really important to ensure that these connect with the C-MEC."[59]

54. However, Mavis Maclean suggested that the two issues of maintenance and relationship breakdown should be kept apart:

"money is a separate issue from all the other aspects of separation and continuing parenting […] The important thing for the CSA is not to ask it to do too much; it has got quite enough on its plate with assessment and collection and to ask the CSA to take on a more complex, welfare-supportive role is really a bit optimistic."[60]

55. Citizens Advice were unsure of their ability to provide a service in this area:

"Where we would struggle is to take on any kind of mediation role. Advisers operate in the same sort of way as solicitors and they do not advise both parties in a case."[61]

56. The Committee's concerns on this issue are reinforced by the experience of the ill-fated Part II of the Family Law Act 1996, which was designed to reform the process of divorce law but has never been implemented. The Government decided to abandon the Part II reforms because the pilot programmes for the delivery of information meetings and mediation services for separating couples were not judged to be a success. In particular the information meetings "were too inflexible to provide people with information tailored to their personal needs."[62]

57. The Committee accepts that C-MEC should not be involved in questions of contact and support for parenting by separated couples, but believes that these issues are an inevitable and unavoidable part of many CSA clients' lives. Ensuring that there is sufficient high-quality, holistic, trusted and independent advice for both men and women in all areas of the country is therefore an essential precondition of success for the Government's proposals. It will be crucial for parents who have separated, for example, to receive timely advice on what is a reasonable settlement and how payments should be set up. The Committee recommends that whether the advice is provided by a single source or separate organisations signposted from a central body, the availability should be well known, and that the advice itself should be delivered sympathetically. We are not convinced that C-MEC will be the right organisation to deliver this advice.

FUNDING OF ADVICE

58. Several witnesses expressed concern as to how a system of advice services would be funded and how it would be delivered, as Janet Allbeson from One Parent Families told us:

"You need a mixture of funding for a national line and then proper funding for services on the ground that can help lone parents as well as non-resident parents to deal with the wide range of problems they face on relationship breakdown. At the moment, that funding is not there".[63]

59. Citizens Advice also drew attention to the current funding climate as being:

"extremely difficult for independent advice. Funding for both Citizens Advice, the umbrella body for the CAB service, and for local Citizens Advice Bureaux, is faced with increased restrictions. The Carter review of legal aid and the Government's subsequent White Paper may, if implemented without change, result in fewer Citizens Advice Bureaux offering advice and information supported by legal aid contracts."[64]

60. CPAG pointed out that:

"At the same time as new calls are being made on the voluntary sector (not only in child support but through Pathways to Work and tax credits), civil legal aid is under significant threat following the review of Legal Aid threatening precisely the provision called upon to help make the new plans work."[65]

61. The Committee recommends that the Government ensures advice for separating parents is adequately funded to provide both a telephone service and face-to-face meetings. We recommend that the Government sets out its detailed plans in this area at the very latest before the Second Reading debate on the proposed Bill bringing in the child maintenance reforms.

The role of the courts

62. The Committee received evidence on two major issues concerning the role of the courts in the field of child maintenance agreements and orders: the powers of the courts in making child maintenance decisions in the course of ancillary relief applications; and the so-called "12 month rule".

ANCILLARY RELIEF PACKAGES

63. It was put to us by Resolution (formerly the Solicitors Family Law Association) that:

"where the courts are dealing with financial applications anyway, what we call package cases - for example in divorce cases, where they are looking at lump sum and property adjustment orders - they should deal with the child maintenance provision there".[66]

At the moment the courts can only make such an order if both parents agree to the amount (a "consent order"). This is because section 8 of the Child Support Act 1991 states that as a general rule only the CSA has the jurisdiction to make an order for child support except in certain circumstances, for example when the parents come to an agreement.

64. Resolution argued that the courts were in a better position to make judgements on financial circumstances because "when the court is looking at a party's financial circumstances, it has all the financial information available to it. Unlike the CSA system, the parent with care can see the income that is being used. They can see the basis upon which the income has been calculated."[67] Kim Fellowes from Resolution told the Committee that "the magic that we have now that did not exist 13 years ago is the fixed percentage formula. When the CSA was introduced, there was the anomaly all round the country about what the maintenance figure should be. Different areas of the country had different figures, whereas now there is a uniform percentage formula that works. Essentially it is accepted by the general public, by the courts and by lawyers."[68]

65. However, both Sir David Henshaw and the Secretary of State rejected the argument advanced by Resolution. Sir David Henshaw said in his report:

"There have been a number of representations suggesting that the courts should have greater power to determine child support in cases where there are other financial matters to be resolved between the parents. Although this proposal has some merit, it raises the risk of significantly increasing the burden on the courts for what is a relatively simple calculation process. It is not clear that the potential benefits outweigh these risks."[69]

The Secretary of State argued:

"There are issues of cost that have to be taken into account. There are questions of consistency as well. One of the principal reasons, 15 or so years ago, the then government established the Agency as the mechanism through which child support cases would be dealt with in the future was concern about the way in which child maintenance decisions were being made in the courts, the inconsistency of the courts here. We have to take these matters into account now. There is also the question of having parallel jurisdictions: one legal, one essentially administrative. We have to take a view about these. I think it would be a step backwards to create parallel jurisdictions here in relation to child maintenance."[70]

66. However, the Family Justice Council stated:

"The idea that [giving the court jurisdiction to adjudicate on child support whether or not there is initial agreement] would risk significantly increasing the burden on the courts for what is a relatively simple calculation process appears to result from a misapprehension of what happens in ancillary relief proceedings."[71]

67. In our opinion, it seems that if the Government is intent on moving clients towards private agreements and away from using C-MEC then its decision not to explore the use of the courts is inconsistent. The Committee recommends that the Government reconsider the decision not to allow courts to make a maintenance order unless both parties consent.

12 MONTH RULE

68. Under the current system of child support, if a court makes a consent order for child maintenance, then neither parent may make a private application under section 4 of the 1991 Act for a period of 12 months from the date of that consent order. After that 12 month period the court retains jurisdiction only if neither parent seeks to overturn the order by applying to the CSA.

69. Sir David Henshaw proposed in his report that the 12 month rule should be dropped:

"The ability to move between systems after a year can in itself create instability and reduce the incentive to make an initial agreement. I recommend that consent orders obtained through the courts should not be able to be overturned by the administrative system. This would remove the current 12-month break-point which enables parents to move between consent orders and the administrative system. The order from the court would be given primacy and the courts would become responsible for varying and enforcing consent orders, in effect tying such cases into the legal system."[72]

70. The Government, however, disagreed with him. The White Paper states:

"This rule has a very positive impact on the level of child maintenance in Consent Orders as it ensures maintenance is generally set at a substantial level that broadly reflects the child maintenance formula. The decision to keep the 12-month rule was also determined by the consideration that child maintenance needs may change as circumstances change. The court process to address change can be complex and costly, particularly if agreement between parents breaks down. Children are the primary beneficiaries of maintenance, and we do not believe that their interests will be best served by locking parents into the court system indefinitely."[73]

On the other hand, Kim Fellowes stated that the court process is "no more cumbersome at all than the actual administrative process."[74]

71. Our predecessor Social Security Committee which inquired into the original 1991 Child Support Act expressed concern over the potential for the then CSA to override agreements made in court. They were particularly aware that the Act made no provision for cases where non-resident parents had made generous capital settlements with their spouses in return for agreements to pay minimal child maintenance. Following pressure from the Committee the Act was amended in 1995 to allow for variations (then known as departures) to take into account such settlements but only for those made before 1993. For consent orders made after 1993 there are no CSA variations for capital settlements as parents came to agreements in court in light of the powers of the CSA i.e that even after a settlement has been made the CSA can become involved and enforce a new maintenance assessment.[75]

72. However, research from a recent DWP report Investigating the Compliance of CSA Clients found that many non-resident parents were still making "clean break" arrangements in the belief that it really was a "clean break" and then were frustrated when the CSA contacted them. One father commented "If I'd known this were gonna happen, I would have asked for more out of the house, […] I would have split it down the middle, which I didn't." The report concludes that "It seems that, for some cases at least, the legal framework is not giving sufficient attention to the CSA and its approach. This is disappointing, given that the relationship between the CSA and other forms of support and property division have been established for over a decade."[76]

73. However, Resolution argued that the 12 month rule can also be manipulated to the benefit of some non-resident parents, in particular the self-employed as a means of lowering their child maintenance payments:

"The self-employed person knows that the level of information provided to the court has been such that his income has been very accurately assessed. However, and it is no criticism of C-MEC or the CSA, the level of information that is provided to the CSA is somewhat different. The other difficulty in that regard is that when it does go to the CSA, the non-resident parent is aware that the parent with care does not see any of that financial information, so the non-resident parent finds it a lot easier to manufacture their income when they are informing the CSA rather than the courts. The 12 month rule really does create difficult problems and there is no need for the 12 month rule to remain."[77]

74. There was also evidence in favour of the 12-month rule. Mavis Maclean commented:

"You talk about protecting the interests of the state; I would put it as protecting the interests of the child as if you lose the 12 month rule you are allowing parties to agree to something which does not safeguard the child's interests in that stream of income and it can be bargained away in one set of circumstances. The other absolutely crucial thing to always remember about child support is that it is not a one-off decision; it is a lifetime, on-going economic relationship between two people rearing a child. It is not agreed on day one and set in stone; it is agreed or imposed and then it has to be varied, it has to be enforced, it has to be rethought in new circumstances, rearranged as a child gets older. It is much more like a tax assessment than it is like a compensation award or a divorce financial settlement; it is an on-going financial relationship and that is why I think the 12 month rule is so important because you cannot simply reach a consent order and that is the end of the story, it is only the beginning of the story."[78]

75. This argument contrasts with the "set and forget" concept as described by Kim Fellowes from Resolution:

"where you have your maintenance order and unless there is a considerable change in the future, you do not need to go back. The reason you do not need to go back is because we generally have an indexation provision in the court order. All that means is that on the 12-month anniversary, the assessment will increase in line with inflation. That is perfect."[79]

76. The Committee is concerned that the 12 month rule may not be working as intended and recommends that if the Government keeps the rule then it needs to find a way of addressing the weaknesses identified by Sir David Henshaw and highlighted in the evidence we received, in particular the confusion over the powers of the CSA to make maintenance assessments even after a "clean break" settlement and the potential manipulation of the 12 month rule by some self-employed non-resident parents to lower their child maintenance payments.

Registering private agreements

77. The White Paper proposes the concept of a register of private agreements for child maintenance:

"We would like to work with stakeholders that have extensive expertise in this area to develop our early thinking on a package of services that might include elements such as a national helpline for separating families, a register of private maintenance agreements made available via the helpline and a website."[80]

78. Concern was expressed over the lack of further detail in the White Paper. Professor Stephen McKay commented "nowhere [does it discuss] how this is to happen. […] how is this register supposed to work?"[81]

79. Some of the evidence we received commented that, if the Government is to move towards a system that encourages the use of private agreements, it is essential to the policy's success that a register is maintained in some format and that effective monitoring is built into the system. Anne Kazimirski, from NatCen, advocated a system that incorporated "some sort of registering, some sort of monitoring that could be a regular letter that reminds them both what should be being paid, the frequency and the level of payment, perhaps a regular phone call to one or both parents."[82] She also suggested that there should be clear triggers for external intervention if a private agreement does break down:

"if you want to encourage parents to go into private arrangements you have to be very clear about what would happen if they break down, and they would want a guarantee that they do not have to wait for six months without any money before anything will happen. You probably need, therefore, to establish some sort of rule as to how much non-payment will count as the private arrangement not having worked and an agency needing to step in."[83]

80. Child Support Action Ltd stated that unless private agreements can be registered and then enforced, "it seems that no parent with care would have a real interest in negotiating an agreement".[84] CPAG expanded on this, stating:

"Without the effective registration of private arrangements it is difficult to see that the breakdown of a private arrangement could be handled other than through a new application to the Commission to directly handle the case, this could take time and allow a pattern of non-compliance to set in."[85]

81. CPAG also suggested that:

"to guard against parents with care 'settling for less' and for administrative simplicity we argue registration should be set at the level of the formula at minimum."[86]

82. One Parent Families expressed concern regarding the policing of voluntary agreements:

"it would be a costly diversion for C-MEC to be drawn down the route of attempting to formalize, supervise and monitor what are, in essence, voluntary agreements with no legal enforceability."[87]

83. The Secretary of State implied that the state should not be heavily involved with private agreements commenting that "I think we should try to do it in the lightest possible touch way - web-based, I suspect."[88] He also added that:

"We should not legislate in these areas - that would be my first instinct - as it were, to set down a set of "must dos" or statutory criteria for these private voluntary arrangements. I think there is the benchmark of the formula for assessing liability in the child support legislation."[89]

He also commented that there would be no C-MEC involvement if the agreement breaks down, unless the parent with care approaches them: "it would require a reference to the Commission from the parent with care."[90]

84. One Parent Families told the Committee that:

"The best way of ensuring compliance with voluntary agreements is to have an efficient and effective government-run service in the background. That should be the priority."[91]

85. A further problem with registered private agreements was highlighted in research conducted by the Scottish Office on the Scottish system of written agreements.[92] It found that three quarters of Minutes of Agreements were made by home owners. These are currently not the main cohort of the current clientele of the CSA.[93] As Kim Fellowes from Resolution observed:

"I think you would be surprised at the percentage of people who will make private agreements. The people who are separating and have assets and a number of other issues to consider will probably manage to do that. Where the assets are far lower, […] in the lower asset income stream you are going to find that the private agreements will be far less likely than you believe"[94]

86. The Committee believes that without any powers to set standards, monitor or enforce it is unclear what would motivate people to register private agreements and particularly how the Government would encourage separating parents, and especially those on low incomes, to do so. Parents must have confidence that C-MEC will enforce any child maintenance agreement which has been registered with it, if asked by either parent. Past experience indicates that the only way these arrangements can work is if both the parent with care and the non-resident parent believe that C-MEC will take on their case and process it speedily and efficiently if the arrangement breaks down.

Joint birth registration

87. At present, there is a statutory duty to register a birth within 42 days. If the parents are married to each other, either parent can register the birth; if the parents are not married then both parents need to register or the mother may register alone. The mother of a child - and the father if he is married to the mother - automatically have parental responsibility. Where the parents are not married to each other, the father will acquire parental responsibility if he acts with the mother to have his name recorded in the child's birth registration (this came into effect with births registered after 1st December 2003).[95]

88. Professor McKay explained the relevance of this to child support as being:

"Married couples and those couples both identified on birth certificates are assumed to be liable for child support, and the onus to disprove this is on the putative father (and this may be onerous in practice). Where the father is not named, there is more of an onus on the CSA to prove paternity (e.g. through DNA testing)."[96]

89. The White Paper states that:

"The birth registration system needs to do more to actively promote joint registration and current legislation should be changed to require both parents' names to be registered following the birth of their child, unless it would be unreasonable to do so."[97]

90. It notes that 50,000 children each year in the UK are registered without their father's name on their birth certificates. This amounts to nearly one in five of all births outside of marriage.[98] The Secretary of State told us that he thought it was:

" a fundamental issue [that] we should know the identity of both parents. The child has the right to know. As a society we have to do all we possibly can to promote the concept of parental responsibility."[99]

91. However, Professor McKay expressed concern with the proposal and raised a number of practical questions:

"An immediate question is the role that fathers would play in having to confirm their paternity. If attendance is needed (currently it isn't needed for married couples, but is needed for unmarried couples) how could this be enforced? If attendance isn't needed, would those so named be informed about their inclusion? Well-handled, this could be a valuable change to treat married and cohabiting couples in comparable ways - badly handled this could create problems of proof and actions against incorrect assignments of paternity."[100]

92. Mavis Maclean, told us:

"It is a very small minority who are not registering directly […] it may be inertia, it may just not have occurred to people, but it is quite possible that there is a powerful reason for not seeking joint registration. There may have been issues of domestic violence, there may have been issues about abuse of earlier children of the couple"

She went on to say:

"Joint registration would, as I understand it, automatically lead to parental responsibility, and that is quite a murky legal concept. It is quite unclear still what powers and duties parental responsibility in that form confers and there are issues about whether it would require a parent with care to consult with the non-resident parent about various aspects of medical treatment or schooling or whatever."[101]

93. One Parent Families argued:

"this measure is not necessary for child support purposes where use of the new Agency is voluntary, and will create enforcement difficulties for Registrars if the mother is unwilling to name the father. What punishment would be meted on unmarried mothers in this situation, and who will judge the issue of child welfare or vulnerability? We consider it would be far better to promote voluntary joint registration of births as part of a more general strategy of positive engagement with unmarried fathers about their responsibilities towards their children."[102]

94. When questioned on this point the Secretary of State explained:

"I do not think anyone is going to go to prison for this offence. We have to be clear about the importance of this as a general principle. Then I think we can work back from that, through a series of stages and steps, in exactly the same way that has been done in relation to joint birth registration now, to a point where we can put together proper legislation that deals with these issues of concern about wellbeing and welfare. I do not believe any of these technical issues will be conclusive."[103]

The Department subsequently informed the Committee that current legislation provides for fines of a maximum of £200 for failure to register a child's birth within 42 days[104] but that this sanction is virtually never imposed.

95. The Committee is concerned that, whatever the merits of joint birth registration, this highly sensitive matter is being tagged onto child maintenance legislation when it potentially has wider ramifications through the family law system.

Collection

96. The White Paper states that C-MEC will continue the CSA function of collecting child support payments from the non-resident parent on behalf of the parent with care. The Government intends to "collect maintenance more efficiently, building on existing successful methods."[105]

97. Under the White Paper proposals those currently using the CSA collection service will have the option to keep their old assessment and have the money collected through a new cash transfer service. Alternatively they can make a new assessment, effectively becoming a new C-MEC case, or come to a private agreement outside the C-MEC system entirely. New entrants to C-MEC would have the choice of an assessment using the formula but make their own private collection arrangements, or they can become a new case for C-MEC by asking for an assessment and collection service.

98. The current methods of collection used by CSA are shown below:

Figure 5: Collection methods
Manual (giro, cheque, cash via PO to CSA)  22% 
Deduction from earnings order  21% 
Maintenance direct  16% 
Standing order 16%  
Deduction from benefit  14% 
Direct Debit 7%  
Unknown 3%  
This table shows that currently, 84% of payments are collected in some form by the CSA  

DWP Quarterly Statistics December 2006 Table 9

99. The quantitative and qualitative studies on maintenance direct payments carried out by NatCen discussed on pages 9-11 of this report indicate many reasons why parents wanted to stay with a collection service. Figure 2 on page 9 shows the reasons given by parents with care. The most common reason was that they "wouldn't feel sure that they'd get paid at all" closely followed by "bad relationship/don't trust ex-partner".

100. Anne Kazimirski from NatCen, who carried out the research, explained that it was not just parents with care but also non-resident parents who

"sometimes appreciated having a third body involved […] in order to have proof of payments because they might have had problems in the past where they have paid the money but the parent with care claims that it had not been paid and so on."[106]

101. Whilst the Government is trying to encourage parents to move towards making private maintenance arrangements, Stephen Geraghty, the current Chief Executive of the CSA, made it clear that the Government would not provide a collection service in such situations:

"The plan is we offer calculation and collection or calculation but not collection, but we would not offer collection but not calculation."[107]

He added that it would be difficult to use enforcement powers for a calculation which was a totally voluntary and unregulated agreement.[108] Therefore all parents without a CSA or C-MEC assessment will be unable to use any government collection service. This, as the evidence from the maintenance direct studies indicates, may discourage parents with care agreeing to a private arrangement as they are likely to fear they may not receive the payment.

102. The Committee is not convinced by the Government's argument that it is inappropriate for C-MEC to collect maintenance calculated through voluntary arrangements. The Committee believes that Government should be doing all it can to facilitate private arrangements. In appropriate cases this will mean enabling parents to come to private agreements but providing an official collection service which provides both payer and payee with an authoritative account of payments of child maintenance made and received.

DEDUCTION FROM EARNINGS ORDER

103. The White Paper considers the use of a Deduction from Earnings Order (DEO) as a collection method for C-MEC:

"The use of a Deduction from Earnings Order is the automatic collection method favoured by many American states. Evidence suggests that this has helped to increase the extent to which non-resident parents comply with their maintenance obligations. We believe there may be merits in withholding wages as the first means of collecting maintenance, even if the non-resident parent would be willing to pay by another method such as a Direct Debit. We intend to test whether, in the UK context, it leads to an increase in overall compliance."[109]

104. A report by the DWP on the compliance of CSA clients found that their reactions to DEOs were varied:

"Some respondents felt it was really no different from a direct debit and appreciated the ease with which they could then make payments. Others felt that the DEO was an intrusion, that the Agency should not have the right to allow the parent with care first call on their money. The third point of view was that it was an inevitability, and the only way in which the CSA was going to get any money from them."[110]

105. Resolution commented:

"The proposed Deductions of Earnings Order pilot is welcomed, although it must be seen as a processing application, rather than a default mechanism for securing payment."[111]

106. Anne Kazirmiski said:

"if you go straight to deduction from earnings […] you are going to antagonise many fathers, which I think we should care about because it will affect their compliance. Even if deduction from earnings makes it less likely for them to be possible to be non-compliant, it is still an issue and, of course, it affects their relationship with the parent with care and with the children. If you end up going straight for a deduction from earnings, you are not actually tailoring anything to the non-resident parent and you are not taking into account their circumstances or their past payment record at all. It ignores continued relationships and circumstances."[112]

107. The Committee recognise that Deduction from Earnings Orders are a useful tool to receive payments from non compliant non-resident parents. We note that the DWP intends to test them as a first means of collecting maintenance, even if the non-resident parent would be willing to pay by another method. Although this proposal could have merits, it would be a significant step and we ask the Department to set out when and where it will "test" this and what steps it will take to avoid antagonising non-resident parents with good payment records who are asked to participate. We ask that the lessons learned from this exercise be reported to the Committee.


12   White Paper, para 15 Back

13   Department for Work and Pensions Research Report No 152 Back

14   Ev 73 Back

15   Ev 74 Back

16   Ev 76 Back

17   DWP Research Report, No. 404: An Investigation of CSA maintenance direct payments: Quantitative Study p127  Back

18   DWP Research Report, No. 404: An Investigation of CSA maintenance direct payments: Quantitative Study p133 Back

19   DWP Research Report, No. 404: An Investigation of CSA maintenance direct payments: Quantitative Study p 60 Back

20   DWP Research Report, No. 327: An investigation of CSA maintenance direct payments: Qualitative Study para 6.2.2 Back

21   DWP Research Report, No. 327: An Investigation of CSA maintenance direct payments: Qualitative Study p 2 Back

22   The Scottish Office Legal Research Unit, Legal Studies Research Findings No. 5 (1997) Mutual Consent Written Agreements in Family Law Fran Wasoff, Ann McGuckin and Lilian Edwards Back

23   DWP Research Report, No. 327: An Investigation of CSA maintenance direct payments: Qualitative Study para 3.21 Back

24   Ev 68 Back

25   Ev 97 Back

26   White Paper, p 31 Back

27   Q 123 Back

28   White Paper, p 37 Back

29   Q 154 Back

30   White Paper, para 2.21 Back

31   Ev 68 Back

32   White Paper, para 2.9 Back

33   Ev 76 Back

34   Ev 72 Back

35   Ev 72 Back

36   White Paper para 2.26 Back

37   DWP Research Report No.380: Future policy options for child support: The views of parents p72-73 Back

38   Ev 67 Back

39   Ev 110 The telephone number for this service is 0808 800 2222 Back

40   DWP Research Report No.380: Future policy options for child support: The views of parents p 65 Back

41   R. Moorhead, M Sefton and G. Douglas Advice needs of lone parent families (One Parent Families, 2004) Back

42   Q 123 Back

43   Q 123 Back

44   Ev 84 Back

45   Q 88 Back

46   Q 156 Back

47   White Paper, para 2.24 Back

48   Ev 75 Back

49   Q123 Back

50   DWP Research Report No. 380: Future policy options for child support: The views of parents p69 Back

51   Q 88 Back

52   Q 123 Back

53   Q 13 Back

54   Q 123 Back

55   Q 91 Back

56   Work and Pensions Committee, Second Report of Session 2004-05, The Performance of the CSA, HC 44 para 128 Back

57   DWP Research Report 404, An Investigation of CSA Maintenance Direct Payments: Quantitative Study p 4 Back

58   Ev 68 Back

59   Ev 112 Back

60   Q 3 Back

61   Q 87 Back

62   Lord Chancellor's Department Press Notice Tuesday 16 January Divorce Law Reform - Family Law Act 1996 - Part II Repeal Back

63   Q 123 Back

64   Ev 114 Back

65   Ev 98 Back

66   Q 93 Back

67   Q 94 Back

68   Q 86 Back

69   Henshaw Report, para 52 Back

70   Q 157 Back

71   Ev 102 Back

72   Henshaw Report, paras 57-58 Back

73   White Paper, paras 2.36 - 2.37 Back

74   Q 99 Back

75   Child Support Agency Guidance Leaflet on Variations p 11 Back

76   DWP Research Report No. 285, Investigating the Compliance of CSA Clients, Para 2.3.1 Back

77   Q 96 Back

78   Q 14 Back

79   Q 96 Back

80   White Paper, para 2.28 Back

81   Ev 103 Back

82   Q 22 Back

83   Q 14 Back

84   Ev 99 Back

85   Ev 96 Back

86   Ev 97 Back

87   Ev 75 Back

88   Q 167 Back

89   Q 169 Back

90   Q 168 Back

91   Ev 76 Back

92   The Scottish Office Legal Research Unit, Legal Studies Research Findings No. 5 (1997) Mutual Consent Written Agreements in Family Law Fran Wasoff, Ann McGuckin and Lilian Edwards Back

93   In Baseline Survey only 37% of NRP's and 28% of PWC's were home owners; Wikeley et al(2001)p 19 Back

94   Q 109 Back

95   www.gro.gov.uk/gro/content/births/ Back

96   Ev 103 Back

97   White Paper, para 2.46 Back

98   White Paper, para 2.44 Back

99   Q 161 Back

100   Ev 108 Back

101   Q 27 Back

102   Ev 69 Back

103   Q 171 Back

104   Births and Deaths Registration Act 1953 (c.20), s, 36 Back

105   White Paper, para 5.4 Back

106   Q 10 Back

107   Q 193 Back

108   Q 194 Back

109   White Paper, para 5.12 Back

110   DWP Research Report No. 285, Investigating the Compliance of CSA Clients p 62 Back

111   Ev 61 Back

112   Q 53 Back


 

 
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