Memorandum submitted by One Parent Families
SUMMARY
— We welcome the proposal to allow
parents the choice whether to use the agency or not. But those
parents who do need to use the agency must be able to access it
quickly and be sure that it will back them up. Provision of advice
and information will be essential to making private agreements
work.
— We are pleased that the Child
Maintenance Premium will be extended to "old scheme cases"
and that the child maintenance disregard is to be "substantially
increased", but we are disappointed that this increase is
not proposed until 2010-11. This means that the important contribution
that maintenance could make to meeting the 2010 child poverty
targets will be minimised.
— We are not convinced of the
case for compulsory joint registration of births and would prefer
to see a voluntary approach.
— We welcome a greater focus on
enforcement for the new agency. To date this has not been a priority
and organisational transformation will be required if this focus
is to be achieved. A tailored approach to enforcement will be
required to avoid labelling all non-resident parents who use the
agency as "dead beat dads" and thus deterring engagement
by both parents.
— We recognise that some child
support debt will have to be written off. But plans to collect
only 7% of the debt that the agency itself defines as recoverable
are disappointing. The generation of children currently growing
up without the maintenance owed to them must not be forgotten.
— The transfer from the "Child
Support Agency" to the new "C-MEC" will need to
be carefully managed.
— Basing maintenance assessments
on available tax year information appears sensible, but we need
further details of how this will work.
1. One Parent Families
One Parent Families is the national organisation
representing the 1.9 million families in Britain headed by a lone
parent. For almost 90 years, since it was established in 1918,
the organisation has been campaigning for the establishment of
a successful child maintenance system that guarantees regular
payments to parents with care and their children.
2. A new focus on parents making their own
arrangements
2.1 The Government argues that all parents
should be given the choice to make their own child maintenance
arrangements without the involvement of the Agency. It therefore
intends to abolish the current rule that says that lone parents
must apply to the CSA if they claim Income Support or Jobseeker's
Allowance. This will happen from 2008.
2.2 The new focus will be on encouraging
parents to agree their own arrangements, with the help of new
information and guidance services. The Government wants to consult
on a package of services to support parents to make such agreements.
These might include a national helpline for separating families,
a register of private maintenance agreements, and a website. Parents
seeking to use C-MEC would first be expected to use the information
and guidance services. One "encouragement" to non-resident
parents to reach acceptable private arrangements, will be the
imposition of charges on the payer if C-MEC is used.
2.3 We fully support the proposal that parents
should have the choice whether to use the new Agency or not. But
there are a significant number of lone parents who will not be
able to agree maintenance arrangements which are adequate and
reliable, or who find that their private agreements break down.
In these cases they need to know that they can count on Government
help, for example to trace the non-resident parent; to find out
his/her true income; to make payment arrangements that stick;
and to chase arrears. It is important that lone parents know they
have the back-up of the new C-MEC and are not left to "go
it alone".
2.4 At present, the advice and information
available to families on relationship breakdown is fragmented
and inadequate. If the Government expects couples to make satisfactory
arrangements for child maintenance on their own, it must put adequate
resources into independent advice and mediation services to help
them to do so.
3. A £10 "maintenance disregard"
for all lone parents on benefit—with more to come in 2010-11
3.1 From the end of 2008, the Government
intends to extend the rule which allows lone parents on Income
Support to keep up to £10 of any maintenance paid, so that
parents whose child support award dates from the old pre-2003
scheme are covered. It is estimated that 40,000 parents and 55,000
children could benefit from this change. The Government also promises
that from 2010-11 it will "significantly increase" this
£10 figure for all parents on benefit, so that much more
of the maintenance paid by the non-resident parent actually reaches
the children.
3.2 Whilst very much welcoming the belated
extension of the £10 "disregard" on child maintenance
to old scheme cases, One Parent Families is disappointed that
the Government has decided to delay giving children in the poorest
families a larger share of any maintenance paid until 2010-11.
Even the White Paper accepts that: "reclaiming most of the
money for the State, rather than passing it through to children,
still means that neither parent has a strong enough incentive
to co-operate [in arranging maintenance]. This undermines the
extent to which child maintenance can contribute to the eradication
of child poverty." Given that the Government has a target
to halve child poverty by 2010, we believe a "disregard"
substantially in excess of £10 should be introduced much
earlier. This would be an extremely well-targeted way of helping
the Government to halve child poverty by 2010, lifting a total
of up to 90,000 children out of poverty.
4. Joint registration of births
4.1 The Government intends to change the
law in England, Wales and Northern Ireland so that, for unmarried
as well as married parents, both parents' names will be required
on the birth certificate. This is intended to give both parents
a clear sense of responsibility for the welfare of their children.
There will be safeguards to protect the welfare of children and
vulnerable women.
4.2 We argue that 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.
5. Tougher enforcement
5.1 The Government says it wants to consider
new measures to ensure a "strong and effective enforcement
regime" is in place.
5.2 One Parent Families very much welcomes
the determined thought being given to how to pursue more rigorously
non-resident parents who seek to evade paying for their children.
Until now, debt collection and enforcement has had a low priority
within the CSA. Measures such as "naming and shaming"
or taking away passports are eye-catching but apply to only a
few cases, and could only be applied after all other measures
had failed; we want to see an organisational transformation so
that all non-payers are targeted at an early stage and any arrears
systematically pursued. We would prefer an emphasis on ensuring
that parents meet their responsibilities to their children, rather
than on what will be done when the system fails to do so.
5.3 Previous research indicates that non-resident
parents dealing with the Agency resented being stigmatised as
"dead-beat dads". There are a variety of circumstances
where it is easier for both parents if payment of child maintenance
is done through the Agency—for example, where there is a
tense relationship and both parties need an intermediary to ensure
proper maintenance is paid; where official oversight of payments
made reduces the scope for dispute about whether payments have
been made; or where the parents don't agree about the non-resident
parent's financial circumstances. Too great a focus on the new
Agency as dealing only with hard-core serial non-payers risks
creating resentment among non-resident parents contacted by C-MEC,
and may deter some parents with care seeking help. We suggest
a tailored, risk-based approach to non-resident parents by C-MEC,
based on their circumstances and past record.
6. Dealing with long-standing debt
6.1 Out of a total debt of £3.5 billion,
the Government intends to write off around £50 million of
"historic debt" which they can no longer recover. This
will include:
— unpaid fees and interest which
date back to 1993-95;
— cases where the parent with
care or non-resident parent has died (and, in the case of a non-resident
parent, the debt can not be recovered from his estate); and
— cases where the parents are
reconciled or the parent with care does not want recovery.
6.2 The Government also intends to revalue
£1.3 billion's worth of punitive assessments (Interim Maintenance
Assessments) levied between 1993 and 2003. This is because it
accepts that the money, because not related to ability to pay,
is irrecoverable. The revised value, based on actual liability,
will be around £0.5 billion. Thus, £800 million of debt
will disappear as a result.
6.3 C-MEC will also be given the powers
to:
— "do deals" on debts
so that, if the parent with care agrees, a lesser amount than
the entire debt can be paid in full and final settlement;
— factor (sell) debts (but if
owed to the parent with care, only by agreement);
— recover arrears from the estate
of a non-resident parent who has died; and
— offset new child maintenance
liabilities, where a child moves between parents and there is
an existing debt owing.
6.4 One Parent Families accepts that there
is a certain amount of debt which, however hard the CSA or C-MEC
tries, is simply unrecoverable. But the Agency's own figures show
there is around £1.4 billion of child support debt which
is definitely collectable; yet the Agency has plans to collect
only £100 million of this (a mere 7%) by 2009. This is disappointing.
Moreover, the White Paper says very little about C-MEC's proposed
"residuary function" of resolving historic debt beyond
2009, or the level of resources which will be devoted to this
task. At present a generation of children are growing up without
the child maintenance they are entitled to because the Agency
failed to take debt collection seriously in the past. Although
the White Paper promises a "clean break" from the past,
the debt which is owed to those children must not be forgotten.
We call for considerably more resources and effort to be devoted
to recovering the £1.4 billion of collectable debt.
7. The new Agency: C-MEC
7.1 The Child Maintenance and Enforcement
Commission (C-MEC) will start work in 2007-08. At first, it will
simply take over existing cases and focus work on debt collection
and effective enforcement. In the transition to the new scheme,
it will brief parents with existing assessments so they can make
one of three choices: (1) to be transferred to the new scheme
with a simplified assessment; (2) to make their own arrangements;
or (3) continue their existing assessment via a C-MEC organised
"cash transfer service". The transfer of cases to the
new scheme will be a gradual process, between 2010 and 2013. C-MEC
is likely to contract out aspects of its business, such as debt
collection, to private contractors.
7.2 Despite operational improvements introduced
by the current Chief Executive and his team, the CSA has a sorry
history and its abolition will not be mourned. In reality, however,
the CSA will gradually evolve into C-MEC with a smaller number
of staff and, it appears, the same computer system. Will the new
Commission do better? At present, a three-year plan to radically
improve the performance is slowly having an effect. But many challenges
lie ahead, not least the transfer of cases to the new scheme,
and enabling parents on the existing schemes to make the right
choices as to whether to transfer or not.
8. A new assessment
7.1 A new simpler assessment process will
be introduced for cases dealt with under the future system, intended
to speed up the process and prevent delaying tactics. It will:
— use latest available tax-year
information from the Revenue to calculate child support, unless
current income differs by at least 25%;
— make fixed term awards for a
year, updated each year by tax data. In-year adjustments will
only be allowed in a limited number of circumstances;
— base assessments on gross not
net income, with new rates of 10, 15 or 20% where there are one,
two or three or more qualifying children;
— no longer take into account
tax credits paid to a non-resident parent as income; and
— charge non-resident parents
on benefit £7 per week for child maintenance, not £5.
The rules on applying for a variation will continue
to apply.
8.2 One Parent Families has argued that
much closer integration was needed between the Agency and the
Revenue so that tax information could be accessed more easily
to ascertain non-resident parents' income. The decision to base
assessments on available tax year information looks a good one;
but careful study will be needed to ascertain how it will work
in practice.
9. Conclusion
Lone parents have been told time-and-time again
that reforms to child maintenance will deliver. It is absolutely
vital not only that we get the system right now for future generations,
but that those lone parents and their children who have lost out
under the present scheme are not forgotten.
5 January 2007
| 
