|Child Support, Pensions And Social Security Bill - continued||House of Lords|
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Paragraph 9: Regulations about shared care
36. The provisions of this paragraph allow the Secretary of State to use regulations to set the parameters of what counts as shared care. Regulations will provide for what nights count for this purpose, what counts as care for these purposes and the use of periods other than 12 months to set the reduction for shared care.
Paragraph 10: Net weekly income
37. This paragraph enables the Secretary of State to specify in regulations the items to be taken into account in calculating the net weekly income of the non-resident parent. The intention is to take account of income tax, National Insurance contributions* and contributions to an Inland Revenue approved pension scheme. Sub-paragraph (2) allows the Secretary of State to estimate a non-resident parent's income, or make an assumption as to any fact, if he feels that the information he has is incomplete or not truly representative.
Paragraph 10A: Regulations about rates, figures, etc
38. This paragraph provides a regulation-making power enabling the Secretary of State to adapt the percentages and amounts used to set the maintenance rates and to revise the number of nights and fractions used to adjust the maintenance calculation where care of a child is shared.
Paragraph 10B: Regulations about income
39. This paragraph provides the Secretary of State with further regulation-making powers to enable him to define what will and will not count as income. For example, where the Secretary of State is satisfied that a non-resident parent has intentionally deprived himself of income, by, for example, working for a relative and not being paid, the regulation-making power will allow him to include that income for the purposes of calculating his maintenance liability.
Paragraph 10C: References to various terms
40. The provisions of this paragraph set the definitions of various terms used in this Schedule.
Qualifying children: Children who are living apart from one or both parents and for whom the maintenance calculation falls to be made.
Relevant other children: Children in respect of whom either the non-resident parent or his partner receives Child Benefit*, or in respect of whom certain other prescribed conditions are met. For example, it is intended to prescribe for a child to be a relevant other child where child benefit entitlement conditions are not yet met because the child has not been resident in the United Kingdom for more than 26 weeks.
A person "receives" a benefit, pension or allowance for any week for which it is paid or due to be paid.
A person's partner: the other member of a couple. Or, in the case of a marriage under a law which permits polygamy, another party to the marriage who is of the opposite sex and is a member of the same household.
A couple: a man and woman who are married and members of the same household or not married and living together as husband and wife.
Clause 2: Applications under section 4 of the Child Support Act 1991
41. The White Paper Children Come First, published in 1990, stated that the current child support system would be available to all parents. However, it was recognised that a staged programme of implementation would be needed. Priority would be given to those who needed child support most. The take-on of applications from parents who had existing maintenance arrangements was deferred and the jurisdiction of the Child Support Agency (CSA) in cases where either parent or the child was living abroad was specifically denied. (Section 44 of the 1991 Act currently excludes cases where the parents are not habitually resident in the United Kingdom from the CSA's jurisdiction.)
42. The phased take-on of applications from parents with existing maintenance agreements was set out in regulations (SI 1993/966). By 1995 it was clear that the CSA was not in a position to take on such a high volume of cases and an amendment was introduced. Section 4(10), inserted by the 1995 Act, deferred applications for child support for an indefinite period where, for example, there was a written maintenance agreement in force made before 5th April 1993, or there was any maintenance order. These cases would continue to be subject to the jurisdiction of the courts.
43. The term "maintenance order" is defined in section 8(11) of the 1991 Act as an order requiring periodical payments to, or for the benefit of, a child under specified legislation. Written maintenance agreements, which are registered in Scotland in the Book of Sessions, are also treated as maintenance orders.
44. This clause provides for the Secretary of State to accept applications from parents who have a maintenance order made after the reforms are introduced provided that the order has been in force for at least a year. Parents with maintenance orders in force at the time that the reforms are introduced - and those with written maintenance agreements made before April 1993 - will, as now, use the courts for enforcement and variation of child maintenance liability.
45. The clause amends section 4(10) of the 1991 Act which prevents the CSA from accepting applications from parents with maintenance orders.
46. Subsection (2) amends this exclusion to refer only to maintenance orders made before a prescribed date. The Government intends to prescribe the date that the reforms come into effect for this purpose. Subsection (3) adds a new exclusion to cover maintenance orders made after the prescribed date if they have not been in force for at least a year.
47. The Government intends to use its powers to prescribe the effective dates of maintenance calculations in paragraph 11 of Schedule 1 to the 1991 Act to set the effective date of any liability resulting from an application covered by the new section 4(10)(aa) to two months after the date of application. This will allow both parents time to consider whether they wish to renegotiate the maintenance order before child support liability begins. The effective date of any liability is the date when the court order ceases to have effect and child support is payable.
Clause 3: Applications by persons claiming or receiving benefit
48. Currently a parent with care on Income Support or income-based Jobseeker's Allowance or any other prescribed benefit can be required to authorise the Secretary of State to take action to recover child support maintenance. She is not required to do so if there are reasonable grounds for believing that if she did there would be a risk of her, or any child living with her, suffering harm or undue distress. This is known as "good cause" for not claiming child maintenance.
49. Under the reformed child support system, parents with care who get Income Support, income-based Jobseeker's Allowance or other prescribed benefits will be treated as having applied for child support, unless they specifically request the Secretary of State not to recover child support maintenance. Where a parent with care asks the Secretary of State not to pursue maintenance the Secretary of State will decide if she has good cause not to do so and if he concludes she does not, her benefit will be reduced by a prescribed amount, currently 40% of the adult personal allowance. This benefit penalty will apply until she asks the Secretary of State to pursue maintenance or shows good cause, as now. The current definition of good cause will be retained.
50. Clause 19 of this Bill substitutes section 46 of the 1991 Act, which provides for a benefit penalty for parents with care to whom section 6 applies, if they refuse, without good cause, to agree to child support action for their children. While the current section 6 includes a consideration of good cause before requiring the parent to apply for child support, the amendments in clause 3 will allow parents to opt out of the child support process under any circumstances. The consideration of whether there is good cause for opting out will form part of the consideration of a benefit penalty, and so is placed in a substituted section 46 in clause 19.
51. The intention is that, having been told by the parent with care that she wishes to opt out, the Secretary of State will ask for her reasons. The parent will have four weeks to provide reasons. If, at the end of this time, it is accepted that there are reasonable grounds for believing that pursuing child support would cause harm or undue distress to the parent with care or her children no further action will be taken. If the Secretary of State decides that there is no good cause, he will impose a benefit penalty.
52. Clause 3 provides that parents with care on Income Support or income-based Jobseeker's Allowance (or other prescribed benefits) will be treated as applying for child support unless they choose to opt out. This clause substitutes a new section 6 for section 6 of the 1991 Act, under which the parent with care is treated as applying for child support. Clause 19 substitutes section 46 in relation to failure to comply with obligations imposed by section 6.
New section 6: Applications by those claiming or receiving benefit
53. New section 6(1) to (3) provide that a parent with care who claims or who is receiving Income Support or income-based Jobseeker's Allowance may be treated as having applied for child maintenance. Subsection (1) contains a power to prescribe other benefits for the purpose of this section; for example, should another income-related benefit be introduced in the future.
54. New section 6(4) requires the Secretary of State to notify the parent with care of this, of her ability under subsection (5) to request him not to act and of the power to impose a reduced benefit direction under section 46.
55. New section 6(6) sets out that this will apply whether or not she receives the benefit in respect of that qualifying child. This provision is contained in the current section 6 (see subsection (8)). A parent with care can claim benefit for herself and the qualifying child, but benefit for the child will not be awarded in circumstances where the child has earnings, a trust fund or settlement, or capital of more than £3000.
56. New section 6(7) follows closely the wording in the current subsection (9). It requires the parent with care to provide the Secretary of State with the information to enable him to identify or trace the non-resident parent so that a child support maintenance calculation can be made and payments collected. She is not required to comply with this section if she has asked the Secretary of State not to pursue child maintenance.
57. New section 6(8) provides a power to make regulations specifying the circumstances in which the requirement to supply information does not apply or will be waived. This carries forward a power (which has not been used) in the current section 6. This power is retained because it may provide protection for parents with care in as yet unforeseen circumstances.
58. New section 6(9) allows a parent with care who is no longer entitled to a benefit to which this section relates to stop child support action. It makes it clear that, until the parent indicates that she wants child support to cease, the Secretary of State may continue to pursue maintenance.
59. New section 6(10) of the substituted section 6 requires the Secretary of State to comply with a request under subsection (9) to cease acting. Regulations under new section 6(11) can provide for the detail of how this will happen.
60. New section 6(12) reflects the current section 6(14). It provides that the provisions in this clause will apply even when there is a maintenance calculation already in force. For example, in situations where there is a change in the parent with care's circumstances and she claims good cause or makes a new application.
Clause 4: Default and interim maintenance decisions
61. There will be circumstances in which a final maintenance calculation cannot be made straightaway, for example, when sufficient details are not made available, or need to be verified. The reformed scheme will allow for maintenance to be collected:
62. The system of default rates will allow the CSA to get maintenance flowing quickly where there is no information about the non-resident parent's current earnings. It is intended that these will be set at 15%, 20% or 25% of average non-resident parent's weekly earnings (currently around £200) according to the number of qualifying children.
63. It is intended that, when the information needed to complete a proper assessment is provided, the default rate will be superseded by a new maintenance calculation. It is intended that maintenance liability for the past will only be recalculated if the full rate is higher than the default maintenance rate. This will both provide an incentive to non-resident parents to provide information quickly and avoid creating overpayments which have to be recovered from the parent with care.
64. The interim rate will be set at the same level as the normal maintenance calculation pending a decision on the variation application. If a variation is allowed, the interim rate will be replaced, with retrospective effect, by the new rate of maintenance liability resulting from the variation.
65. This clause substitutes a new section 12 of the 1991 Act which provides for decisions to set liability at a default or interim rate. The clause provides the power to make regulations which will define the way that these decisions are made and subsequently altered.
New section 12: Default and interim maintenance decisions
66. New section 12(1) provides for a default maintenance decision that will establish a maintenance liability calculated in accordance with regulations made under subsections (4) and (5). This decision may be made where there is insufficient information (apart from information needed in relation to a variation application) to decide maintenance liability.
67. Decisions on maintenance liability are covered by section 11 of the 1991 Act (as substituted by clause 1 of this Bill) which requires Secretary of State to make a decision on an application for a maintenance calculation, and by sections 16 and 17 of the 1991 Act which provide for the revision and supersession of maintenance decisions.
68. New section 12(2) provides for interim maintenance decisions in cases where the non-resident parent has made an application for a variation which has not yet been determined. Sections 28A and 28B of the 1991 Act, inserted by clause 5 of this Bill, provide for applications for a variation and the preliminary consideration of such applications.
69. New section 12(3) provides that the amount of child support maintenance payable by virtue of an interim maintenance decision will be fixed in accordance with Part 1 of Schedule 1.
70. New section 12(4) and (5) provide for regulations to define the way that default and interim decisions are made. The Government intends to provide by regulations that default rates will be £30 per week for one qualifying child, £40 for two children and £50 for three or more children.
Applications for a variation
Clause 5: Departure from usual rules for calculating maintenance
71. The new child support rates set out in Part I of Schedule 1 to the Child Support Act 1991, substituted by Schedule 1 to this Bill, are intended to provide a fair maintenance calculation in the vast majority of cases. Nevertheless, the Government recognises that there will be exceptional cases where the child support rates do not properly reflect a non-resident parent's ability to support his children. For example, a non-resident parent may need to spend an exceptionally large amount of money keeping in touch with the children, or the net income used in working out his liability may not properly reflect the resources available to him.
72. Accordingly, the Government has decided to allow for the variation (both upwards and downwards) of the rates payable under the replacement scheme in certain exceptional cases. However, the Government is concerned to avoid simply re-introducing the complexity of the existing formula by another route. The exceptional cases in which a variation will be possible will therefore be clearly defined.
73. The structure of the new legislation follows the broad lines of the departures scheme which was introduced by the Child Support Act 1995. In particular:
74. However, unlike the provision for departures, an application for a variation may be made before the maintenance calculation has been completed, and the revised legislation is drafted to deal specifically with an application made in these circumstances. Regulations will provide the rules for handling an application for a variation made after the maintenance calculation has been completed. Where the maintenance calculation is made without taking account of the variation application, liability will initially be based on an interim maintenance decision. Section 12(2), inserted by clause 4, provides for this decision.
75. This clause provides the general rules governing the application for a variation before a final maintenance calculation has been made, and how the application is to be considered and decided.
76. Subsection (2) replaces sections 28A, 28B and 28C of the 1991 Act.
New section 28A: Applications for variation of usual rules for calculating maintenance
77. This section provides the rules governing applications for a variation. It specifies who can apply, and in what circumstances and in what manner the application can be made. The substitute Schedule 4A, introduced by clause 6, supplements this section.
78. New section 28A(1), (2) and (3) provide that the person with care and the non-resident parent (or, in Scotland, either of them or the child) can each make an application for a variation at any time, once an application for a maintenance calculation has been made and before a maintenance calculation decision under section 11 (a normal calculation) or 12(1) (a default decision) has been made. Unlike the departures scheme, therefore, they do not need to await the outcome of the maintenance application itself before being allowed to apply for a variation.
79. New section 28A(4) and (5) provide that, unlike applications for departures, applications for a variation need not be in writing unless, exceptionally (for example, having regard to the complexity surrounding the case), the Secretary of State considers this to be appropriate. When making an application, the applicant will be required to state the ground on which they are applying. The Secretary of State may impose other conditions. Where appropriate, he may, for example, require a dedicated application form to have been completed properly before he will accept that an application has been made.
80. New section 28A(6) cross-references to the substituted Schedule 4A (see clause 6 and Schedule 2) which provides additional regulation-making powers relating to the handling of variation applications.
New section 28B: Preliminary consideration of applications
81. This section provides for a preliminary consideration of the application. This is intended to sift out at the earliest possible stage those applications which have no prospect of success.
82. New section 28B(1) provides that, having received an application, the Secretary of State may carry out a preliminary examination (known as a "preliminary sift") to check that it merits further consideration.
83. New section 28B(2) provides, in particular, that an application from any source will be rejected where it has not been made on one or more of the recognised grounds, or where a default maintenance decision (section 12(1)) would be made. A partial list of the criteria which the Secretary of State will consider under the preliminary sift is in substituted Schedule 4B and the rest will be prescribed in regulations. The intention is to sift out applications from non-resident parents in the circumstances where, for example, for the whole of the period between the date from which any variation given in response to the application could take effect and the date of determination of the maintenance calculation, they had either a nil liability, or a flat-rate liability, or a liability which has been reduced to the equivalent of the flat rate on account of any shared care adjustments. In these circumstances, the non-resident parents could not benefit from the effect of a variation.
New section 28C: Imposition of regular payments condition
84. This section provides for the imposition of a regular payments condition. This condition requires a non-resident parent who has made an application for a variation to continue paying maintenance regularly while the application is being considered. This is intended to ensure that children receive maintenance regularly and reliably and that unnecessary debts are not built up during the variation process.
85. New section 28C(1) provides that, where the Secretary of State has made an interim decision pending the determination of a non-resident parent's variation application, and has not rejected the application at the preliminary sift stage, he may require the parent in question to make regular, ongoing payments of maintenance as a pre-condition of having the application considered. This is called a "regular payments condition".
86. New section 28C(2) provides that the rate may either be at the rate of the existing interim decision or at a lesser rate which might anticipate the effect of a successful variation application.
87. New section 28C(3) provides that, in these circumstances, the Secretary of State will notify all the persons with care (and child, if the applicant for the maintenance calculation) concerned, and the non-resident parent, of the imposition of the condition and the effect of failing to comply with it.
88. New section 28C(4) provides that the regular payments condition will cease to have effect either when, in response to the variation application, the Secretary of State replaces his interim maintenance decision with a decision under section 11 (whether he agrees to variation or not) or where the variation application is withdrawn.
89. New section 28C(5), (6) and (7) provide that, if the Secretary of State determines that the non-resident parent has failed to comply with the regular payments condition, the Secretary of State may refuse to consider the variation application and proceed to replace the existing interim decision on the basis that the variation application has failed. Regulations will provide for deciding what constitutes a "regular payment". For example, there will need to be scope for taking some account of occasions where payment is unavoidably late, for example, where a bank fails to operate a direct debit. It is intended that where the Secretary of State is not satisfied that the regular payments condition has been met, progress on the variation application may be suspended to allow the non-resident parent the further opportunity to comply. If within the period of a further calendar month, he has still failed to do so without good reason, the application will fail. In this event, the Secretary of State will not vary the maintenance calculation and will notify all the persons with care (or child) and the non-resident parent accordingly. In these circumstances, the non-resident parent will have to make a fresh application if he again wishes to have special circumstances considered.
90. Subsections (3) and (4) of clause 5 make amendments to the wording of sections 28D and 28E of the 1991 Act (which deal with determination of applications and matters to be taken into account, respectively), substituting references to departure directions with references to variations. With respect to section 28D, the intention is that where the variation application has not failed, been withdrawn, or been rejected at any preliminary stage, the Secretary of State may elect either to determine the application himself or, exceptionally, to refer it direct to the appeal tribunal for determination. This represents no change from the options currently available to the Secretary of State under the departures scheme. Cases which the Secretary of State might refer to the tribunal are those which are particularly complex or contentious and which he feels unable to resolve.
91. Subsection (5) substitutes section 28F of the 1991 Act (which relates to the determination of departure applications) with equivalent wording - with some modifications - relating to the determination of applications for variations.
New section 28F: Agreement to a variation
92. New section 28F(1) provides that a variation may be allowed only if it has been made on one or more of the recognised grounds and if, having regard to all the circumstances, it would be just and equitable to allow a variation in any particular case.
93. New section 28F(2) provides that, in determining whether it would be just and equitable to vary the normal rules in any particular case, the Secretary of State must have regard to the welfare of any child who would be affected by the variation, and such other factors as may be prescribed in regulations. The Secretary of State will need to consider, for example, whether any variation in the amount of child support liability would be likely to result in either parent giving up work.
94. New section 28F(3) reaffirms that an application from any source will be rejected where the Secretary of State has insufficient information to enable him to make a decision as to maintenance liability under section 11, such that he has to make a default decision under section 12(1). The full list of the other circumstances that will automatically debar the award of a variation will be prescribed in regulations. In particular, the intention is to disallow applications from any source where a non-resident parent has been in receipt of (or was the partner of someone in receipt of) a prescribed income-related benefit for the whole of the period between the date from which any variation given in response to the application could take effect and the date of determination of the maintenance calculation.
95. New section 28F(4) provides that, where the Secretary of State agrees to a variation, he has to determine the basis on which the child support maintenance is to be calculated, and proceed to make a decision under section 11 on that basis.
96. New section 28F(5) provides that where the Secretary of State has made an interim maintenance decision and subsequently makes a decision under section 11 (whether or not he agrees to a variation), the interim maintenance decision is to be treated as having been replaced by his decision under section 11. Any appeal which has previously been lodged against the interim decision will lapse, other than in prescribed circumstances. Any outstanding activity under section 16 (revision) or section 17 (supersession) relating to the interim decision itself will be dealt with, as part of the final decision. There will be a right of appeal against the final section 11 decision.
97. New section 28F(6) requires the Secretary of State to comply with any regulations made under the powers of Part II of the substituted Schedule 4B, which is provided for by clause 6, in considering whether to agree to a variation.
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