Schedule 2: Transfer of functions under subordinate legislation

473.     This schedule lists the functions under subordinate legislation which will transfer to the Commission. The following table sets out what this legislation refers to.

Schedule 3: Transfer of child support functions

474.     Part 1: makes the consequential amendments to the Child Support Act 1991 and the Social Security Act 1998, which are necessary as a result of provisions for the transfer of functions from the Secretary of State to the Commission.

475.     Part 2: concerns transitional provision and savings.

476.     Paragraph 55 makes provision to ensure continuity in the transfer of functions from Secretary of State to the Commission.

477.     At the time the Commission comes into being, anything which Secretary of State is in the process of doing in relation to any of the transferred functions may be continued by the Commission.

478.     Any acts of the Secretary of State for the purpose of, or in connection with, any of the transferred functions prior to the transfer will be treated as acts of the Commission where this is necessary to ensure their continuing effect.

479.     Documents, legislation etc which refer to the Secretary of State will be treated as referring to the Commission where it is necessary to make sense of them after the transfer of functions.

480.     No Secretary of State act prior to the transfer will be invalidated by virtue of the transfer. However, the Secretary of State will remain liable for any acts or omissions of the Secretary of State prior to the transfer.

Schedule 4: Changes to the calculation of maintenance

481.     This schedule amends Part 1 of Schedule 1 to the Child Support Act 1991, and concerns changes to the calculation of maintenance.

482.     The table below summarises the changes

483.     Paragraph 2 replaces reference to 'net' weekly income with 'gross' wherever it occurs in Part 1 of Schedule 1 to the Child Support Act 1991. This change means that where a calculation of liability is currently based on the net weekly income of a non-resident parent, in the future it will be based on their gross weekly income.

484.     Paragraph 3 replaces paragraph 2 of Schedule 1, to amend the basic rate of maintenance. Basic rate is a percentage of the non-resident parent's income and the changes will be:

• for one qualifying child - from 15% to 12%;

• for two qualifying children - from 20% to 16%; and

• for three or more qualifying children - from 25% to 19%.

485.     Sub-paragraph (2) of paragraph 2 makes provision for a new rate for non-resident parents whose weekly income exceeds £800. The basic rate in these circumstances will be an aggregate of an amount resulting from the percentages above for the first £800, and an amount resulting from the percentages below for earnings over £800:

• for one qualifying child - 9%;

• for two qualifying children - 12%; and

• for three or more qualifying children - 15%.

486.     Sub-paragraph (3) amends the percentage rate for non-resident parents who have one or more relevant other children. In these circumstances before the percentages above are applied, gross weekly income shall be reduced by a certain amount. Changes to these amounts will be:

• for one relevant other child - 15% to 12 %;

• for two relevant other children - 20% to 16%; and

• for three or more relevant other children - 25% to 19%.

487.     Paragraph 4 amends sub-paragraphs 3(3), 4(1) and 7(7) of Schedule 1. The effect of these provisions is to increase the amount of flat rate maintenance paid by non-resident parents in receipt of benefit, or earnings lower than £100 per week, from £5 to £7 per week and apply the same increase to the minimum amount of liability due under the basic or reduced rates.

488.     Paragraph 5 inserts a new paragraph 5A into Schedule 1 to the Child Support Act 1991. It also amends paragraph 1(1) of that schedule, so that paragraph 1(1) is subject the new paragraph 5A.

489.     The new paragraph 5A will makes provision for circumstances where a non-resident parent, in addition to their obligations under the statutory scheme, pays maintenance for a child or children under an existing private arrangement of a prescribed description or court order.

490.     Currently, all children would normally need to be brought into the statutory scheme for them to be accounted for in a maintenance calculation. This change will mean that the Commission will consider any children who are subject to certain types of private maintenance arrangements, when calculating a basic or reduced rate maintenance liability under the new arrangements.

491.     Sub-paragraph (2) of new paragraph 5A sets the weekly rate of child maintenance for cases that fall within paragraph 5A at the greater of £7 per week and the amount calculated in accordance with sub-paragraphs (3) to (5).

492.     Sub-paragraphs (3) to (5) make provision for the calculation of child support maintenance where the non-resident parent is party to a qualifying private child maintenance arrangement. Liability is calculated as though all the children supported by the non-resident parent, by virtue of a qualifying maintenance arrangement, were subject to the statutory scheme.

493.     Sub-paragraph (6) makes provision for the types of arrangement that will be 'qualifying maintenance arrangements' for the purposes of paragraph 5A.

494.     Paragraphs 6 to 8 amend paragraphs 7(2), 8(2) and 9 of Schedule 1 to the 1991 Act, which allows for a reduction to basic or reduced rate where a shared care arrangement is in place. These changes will allow regulations to provide for a reduction on the basis of an agreement between the parents as to shared care. Regulations can also allow the Commission to work on the basis of an assumed pattern of shared care with a corresponding reduction on an interim basis. The intention is to use this where there is an agreement to share care, but no agreement as to the pattern or amount of shared care.

495.     Paragraph 9 amends paragraph 10 of Schedule 1 to the Child Support Act 1991 to provide that, regulations about the manner in which gross weekly income is determined may provide that gross weekly income may be income from a past period.

496.     This change will mean that where currently weekly income is based on information currently obtained from the non-resident parent, in the future it can be taken directly from information supplied by HMRC and based on previous income tax years.

497.     Paragraph 10 increases the maximum amount of weekly income that will be taken into account for calculating maintenance, from £2,000 to £3,000 per week.

Schedule 5: Maintenance calculations: transfer of cases to new rules

498.     This schedule provides for arrangements to be made with regard to existing cases moving onto the new calculation rules. The Commission may require the parties to choose whether to remain in the statutory scheme under the new calculations rules. If they do not, then liability stops accruing under the scheme.

499.     Paragraph 1 sets out that the Commission may require CSA clients on both existing CSA schemes, to choose whether to remain in the statutory scheme.

500.     Paragraph 2 enables the Secretary of State, by regulations, to make provision about the power referred to in paragraph 1. The regulations may include, for example, provision about timing, stages and in which order cases will be transferred.

501.     Paragraph 3 provides regulation-making powers to the Secretary of State in relation to how the parties exercise their right to choose whether or not to stay in the statutory scheme, and how they apply to stay within the statutory scheme.

502.      Paragraph 4 stipulates that where either of the two parents chooses to remain in the statutory scheme, the case will remain in the statutory scheme, even if the other parent wishes to opt out.

503.     Paragraph 5 sets out the effect of the Commission requiring the parties to exercise a choice under paragraph 1. If a calculation (or assessment under the old scheme) is in force, then maintenance will stop accruing from a date specified in regulations. If there is an outstanding application for maintenance calculation or assessment, it may be made only in respect of the period up to that date.

504.     Paragraph 6 provides regulation-making powers to the Secretary of State in relation to a person's decision not to leave the statutory scheme. These regulations may include provision about how an application to stay in the statutory scheme is determined, how the Child Support Act 1991 in relation to a maintenance calculation is to apply to such an application, and whether any adjustment is required to the resulting calculation. They may also include provision for treating an existing application as withdrawn where no maintenance calculation or assessment has been made.

505.     Paragraph 7 sets out definitions for the purposes of moving of cases to the new calculation rules.

Schedule 6: Use of information

Powers in relation to use of information

506.     This schedule sets out the various gateways for disclosure of information that will be available.

507.     Paragraph 1 enables information held in relation to child support functions by the Commission, or a person providing services to the Commission, to be used by or disclosed to any person providing services to the Commission for purposes relating to child support functions.

508.     Paragraph 2 allows information relating to income tax, tax credit, child benefit or the guardian's allowance, held by HMRC or a person providing a service to them, to be disclosed to the Commission or any person providing services to the Commission for purposes relating to child support functions.

509.     Paragraph 3 concerns information held by the Secretary of State, or a person providing services to the Secretary of State, which relates to social security, or employment or training. It enables such information to be disclosed to the Commission or a person providing services to the Commission, for purposes relating to child support functions.

510.     Paragraph 4 concerns information held for purposes relating to social security, child support or employment training, by the Northern Ireland Department or a person providing services to them. It enables such information to be disclosed to the Commission or a person providing services to the Commission, for purposes relating to child support functions.

511.     Paragraph 5 concerns information held for the purposes of functions relating to child support, by the Commission or a person providing services to it. It enables such information to be disclosed to the Secretary of State, HMRC or the Northern Ireland Department or a person providing services to any of them, for purposes of certain functions.

512.     Paragraph 6 defines the Northern Ireland Department as meaning the Department for Social Development in Northern Ireland or the Department for Employment and Learning in Northern Ireland.

Schedule 7: Minor and consequential amendments

513.     This Schedule contains amendments which are minor or consequential on the measures in the Bill. In particular the Schedule provides for amendment to the Child Support Act 1991, the Social Security Administration Act 1992, the Social Security Act 1998 and the Tax Credits Act 2002.

514.     Section 20 of the Child Support Act 1991 is amended to provide for an appeal to the appeal tribunal against the making of a liability order by the Commission under the new section 32I. An appeal will lie on limited grounds, which are that the person has not failed to pay an amount of child support maintenance or that the amount for which the order is made exceeds that amount which the person has failed to pay. In deciding any appeal against the making of a liability order, the appeal tribunal will not be able to question the maintenance calculation in relation to which the order is made.

515.     Section 50 of the Child Support Act 1991 is amended so that the offence of unauthorised disclosure of information covers members and staff of the Commission, employees of those providing services to the Commission and those employed in employment of a kind prescribed in regulations. The latter could include, for example, employment with a credit reference agency.

516.     Section 108 of the Social Security Administration Act 1992 is amended to include the definition of a maintenance order. The equivalent definition is currently contained in section 107 of that Act, but the repeal of this section is provided for in Schedule 8 of the Bill. Section 121E is also amended in consequence of the transfer of functions relating to child support from the Secretary of State to the Commission. Information supplied by HMRC to the Secretary of State will no longer be provided for the purposes of functions relating to child support. This information will now be provided to the Commission.

517.     Section 3 of the Social Security Act 1998 is amended to remove references to child support pertaining to the use of information held by the Secretary of State or the Northern Ireland Department.

518.      Section 81 is amended to remove the responsibility for the Secretary of State to report on the standard of decisions made following appeals regarding child support maintenance. This responsibility will fall to the Commission.

519.     Schedule 5 to the Tax Credits Act 2002 is amended in consequence of the transfer of functions relating to child support from the Secretary of State to the Commission. Information supplied by HMRC to the Secretary of State will no longer be provided for the purposes of functions relating to child support. This information will now be provided to the Commission.

Schedule 8: Repeals

520.     This schedule provides for repeals consequential on the provisions of the Bill.

FINANCIAL EFFECTS OF THE BILL

521.     The proposed child maintenance changes are anticipated to reduce annual administration costs by around £200 million once existing cases have moved onto the new calculation rules. This is compared to continuing with current policy and the cost reductions are driven by:

• repealing section 6 of the Child Support Act 1991, which will reduce the amount of parents with care in receipt of prescribed benefits who use the statutory scheme;

• an information and support service which will encourage parents to make their own arrangements for child support maintenance; and

• making changes to how maintenance is calculated which will enable liabilities to be set up more quickly.

522.     Clause 38 provides for the extinguishing of debt due to the Crown in relation to fees and interest. Clauses 29 to 32 will also, in principle, lead to a reduction in amounts payable into the Consolidated Fund. This is because under section 41 of the Child Support Act 1991 the enforcement authority is entitled to retain arrears recovered on behalf of a parent with care to whom income support or an income-related jobseeker's allowance has been paid. It is not possible to quantify this possible effect on the Consolidated Fund, which will depend on how debt management powers are exercised and future rates of collection.

523.     The proposed changes regarding mesothelioma will mean that individuals currently not eligible under the 1979 Act may receive a lump sum payment estimated at £6,000 during the first year of the operation of the new scheme. It is intended to recover these amounts from awards of compensation under civil action law for some 240 people, but another 360 will not receive awards of compensation under civil action law and will receive only the lump sum under the Government scheme.

EFFECTS OF THE BILL ON PUBLIC SERVICE MANPOWER

Child maintenance

524.     When the functions of the Secretary of State are transferred to the Commission, those people employed by the CSA will also transfer. Their terms and conditions will be protected under the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE"). Regulation 10 of TUPE however will not be applied to ensure that transferring staff retain entitlement to the Principal Civil Service Pension Scheme ("PCSPS").