APPENDIX 4: CHILD MAINTENANCE AND OTHER
PAYMENTS BILL — GOVERNMENT AMENDMENTS
Supplementary Memorandum by the Department for
Work and Pensions
Introduction
1. This supplementary memorandum sets out delegated
powers conferred by Government amendments made to the Child Maintenance
and Other Payments Bill. It explains in each case the purpose
of the power; the reason why it is left to delegated legislation;
whether the power is subject to Parliamentary scrutiny and, if
so, what procedure applies; and the reason for that procedure.
2. A previous memorandum on the Child Maintenance
and Other Payments Bill was submitted to the Committee on the
5th of June 2007, and again on 4th of December
2007. The Committee's report was published on 13th
of December 2007 (Third Report of the 2007-2008 session).
Parliamentary Scrutiny
3. The Committee should note that apart from
the order-making power in amendment g197 (Disclosure of information
relating to family proceedings) which is subject to negative procedure,
the new delegated powers conferred by the amendments to the Bill
are subject to affirmative procedure.
4. Reasons for the procedures chosen are set
out below.
Analysis of delegated powers by Government
amendment
Part 1 - The Child Maintenance and Enforcement
Commission
Amendment g68 - Review of the status of the Commission
5. A series of Government amendments have been
tabled to Schedule 1 of the Child Maintenance and Other Payments
Bill which have the effect of giving the Child Maintenance and
Enforcement Commission Crown status. Amendment g68 inserts a new
clause into the Bill requiring the Secretary of State to review
the status of the Commission as a Crown body. This review must
be conducted as soon as reasonably practicable after the end of
the initial three-year period after the Commission has come into
existence. The report of the review must be laid before Parliament.
6. Subsection (6) of the inserted clause allows
the Secretary of State to make an order removing the Crown status
of the Commission following a review.
7. Subsection (7)(a) provides that an order made
under subsection (6) may make such amendments to Schedule 1 to
the Child Maintenance and Other Payments Bill as are necessary
or expedient as a result of the Commission ceasing to be a Crown
body. This power is needed to ensure that the legislation remains
coherent following a change to non-crown status. For example,
references to the terms and conditions of staff appointments being
made 'with the approval of the Minister for the Civil Service'
would need to be removed, as staff would no longer be civil servants.
8. Subsection (7)(b) provides that an order made
under subsection (6) may provide for the Transfer of Undertakings
(Protection of Employment) Regulations 2006 (S.I. 2006/246)
("TUPE") to apply as if the Commission ceasing to be
a Crown body were a transfer of an undertaking or business. This
would be used to ensure that the Commission's staff were accorded
full protection in line with TUPE when they moved from being civil
servants to public servants.
9. Under subsection (7)(b), an order under subsection
(6) may provide for TUPE Regulations to be subject to certain
modifications. Modifications are likely to be necessary as TUPE
regulations are not drafted with public sector reorganisations
in mind and without modification of the regulations, staff may
not be fully protected.
10. Government amendments to clause 52 provide
that any order made under the powers set out in amendment g68
will be subject to affirmative resolution. A change in the status
of the Commission from a Crown body would be a significant change,
and it is appropriate that Parliament should be able to fully
scrutinise both that decision and the consequential amendments
that flow from it.
Part 3 Child Support etc.
Amendments g111, g112, g117, g118, g120-125, g127-133,
g214 - Clause 21 - Orders for deductions from regular accounts
11. Amendment g117 inserts a new subsection (3A)
into new section 32A which is to be inserted into the 1991 Act
by clause 21. Section 32A(3A)(a) provides a power to prescribe
in regulations the types of account in respect of which a regular
deduction order cannot be made. It is intended that accounts such
as trust accounts will not be accessible through a regular deduction
order. It is necessary to use regulations to exclude certain types
of account to ensure that the provisions around regular deduction
orders are able to respond to new financial products and to circumstances
which arise, for instance, where it becomes apparent that some
non-resident parents are using excepted accounts in an unexpected
manner to avoid deduction orders.
12. Section 32A(3A)(b) allows regular deduction
orders to be made in respect of joint accounts, but only if regulations
have first been made by the Secretary of State allowing this.
Regulations must therefore be made providing for new section 32A
to apply to joint bank accounts. Section 32A(3A)(b) further provides
that regular deduction orders can only be made in respect of joint
bank accounts if they are not of the types precluded from having
orders made against them in regulations made under section 32A(3A)(a).
The kinds of accounts prescribed in regulations under section
32A(3A)(a) will therefore be excluded from having regular deduction
orders made against them whether they are individual or joint
accounts.
13. Amendment g122 inserts a new section 32AA
(Orders under section 32A: joint accounts) into clause 21. New
section 32AA(3) provides for the Secretary of State to prescribe
in regulations matters which the Commission must take into account
when determining the amounts which are to be deducted from a particular
joint account. This is a safeguard to ensure the Commission considers
certain matters when making an order. It is intended that such
matters will include the intention of the parties at the time
the account was opened and the intended use of the funds in the
account.
14. Amendment g124 makes changes to new section
32B(2)(h), which is to be inserted by clause 21. The amended section
allows the Secretary of State to make regulations regarding the
notifications to be given to the liable person, and any joint
account holders, as to the amounts deducted and amounts paid under
an order.
15. Amendment g127 makes changes to new section
32B(2)(k), which is to be inserted by clause 21. The amended section
32B(2)(k) allows for regulations to set out the circumstances
in which the deposit-taker, the liable person or any joint account
holder may apply to the Commission for a review of the regular
deduction order. Regulations will specify that such persons be
able to apply to the Commission for a review of the order. For
example, it is envisaged that a non-resident parent will be able
to request a review of an order to reflect a change in their circumstances,
a change in the maintenance calculation, or if they are suffering
hardship.
16. Amendment g130 makes changes to new section
32B(4) (Regulations about orders under section 32A: appeals),
which is to be inserted by clause 21. The amended section obliges
the Secretary of State to make regulations providing a right of
appeal to any person affected to a court against (a) the making
of a regular deduction order or (b) a decision made by the Commission
regarding an application for a review of an order made under regulations
pursuant to section 32B(2)(k). Amendment g131 changes the references
to "the magistrates' court (or, in Scotland, the sheriff)"
to "a court". The court to which appeals will be made
will be set out in regulations. We are still consulting, however
it is our intention that for the purposes of England and Wales,
appeals against a deduction will be heard by the County Court,
with the exception of appeals against deductions from joint accounts
which will be heard in the High Court. We are consulting with
the Scottish Executive to ensure that the most appropriate courts
in Scotland will hear such appeals there.
17. Amendment g214 makes all regulations made
under the regulation making powers inserted by clause 21 subject
to the affirmative procedure. This is appropriate given the wide
ranging scope of the provisions set out in clause 21.
Amendments g134, g136, g139, g142-144, g146, g148,
g150, g152-154, g156-157, g159-164, g166-167, g170-172, g214 -
Clause 22 - Lump sum deduction orders
18. Amendment g134 removes subsections (1) and
(2) of the new section 32D, which is to be inserted by clause
22, and replaces them with new subsections (1), (1A) and (1B).
These are concerned with interim lump sum deduction orders.
19. Section 32D(1)(b) allows regulations to be
made setting out the type of amounts due or accruing to the liable
person in respect of which a lump sum deduction order can be made.
Section 32D(1)(a) provides for lump sum orders to be made in respect
of accounts held by the liable person with a deposit-taker - so
section 32D(1)(b) ensures that other amounts due or accruing to
the liable person which are held by a third party can still have
orders made in respect of them provided they are of a type prescribed
in regulations. Section 32D(1)(b) is intended to allow different
financial products to be covered by lump sum deduction orders
as such products are developed.
20. Section 32D(1A)(a) prevents orders being
made under section 32D(1)(a) in respect of certain types of accounts.
The subsection provides for regulations describing those types
of accounts in respect of which a lump sum order cannot be made.
It is intended that those accounts to be excepted may include
trust accounts. Section 32D(1A)(b) allows orders to be made in
respect of joint accounts only if the Secretary of State makes
regulations so providing and the joint account is not of a kind
prescribed as ineligible under section 32D(1A)(a).
21. Section 32D(1B) allows the Secretary of State
to make regulations setting out the conditions which are not be
taken into account when the Commission makes a decision as to
whether an amount is to be taken as 'due or accruing to the liable
person', and therefore eligible for a lump sum deduction order.
Such conditions might include any time limits or notice periods
which apply to the return of funds invested.
22. Amendment g153 inserts a new subsection (3A)
into new section 32E (lump sum deductions: final orders) which
is to be inserted by clause 22. Section 32E(3A)(b) provides for
regulations to set out any matters which are to be taken into
account by the Commission when determining the amount to be specified
in an order made in respect of a joint account. This is in addition
to the requirement in 32E(3A)(a) that the Commission must have
regard to the amount contributed to the account by each account
holder in determining the amount to be specified in the order.
It is intended that matters provided for in regulations will include
the intention of the parties at the time the account was opened
and the intended use of the funds in the account. This is a safeguard
to ensure that any other account holders are not unfairly affected
by the order.
23. Amendment g156 inserts new sections 32EA
(Orders under sections 32D and 32E: freezing of accounts etc.),
32EB (Orders under section 32E: deductions and payments) and 32EC
(Power to disapply sections 32EA(1) and (2) and 32EB(2)(b) and
(4)(b)) into clause 22.
24. Section 32EA(1) and (2) provide that a lump
sum deduction order shall act as an instruction to the deposit-taker
or third party not to do anything which reduces the amount held
or due below the amount specified in the order during the relevant
period. If the amount held or due is already below the amount
specified in the order, the deposit-taker or third party is not
to further reduce the amount. Section 32EA(3) allows the Secretary
of State to make regulations setting out the circumstances in
which amounts held or due may be reduced by the deposit-taker
or third party, as made under the regulation making power provided
for in section 32EC(1). The 'relevant period' begins with the
service of the order on the deposit-taker or third party, and
ends with the end of the period during which an appeal can be
brought by virtue of regulations made under new section 32G(6).
25. Sections 32EB(1) and (3) provide for the
deposit-taker or third party to pay the amount specified in the
order to the Commission. If an amount of arrears specified in
the order remains unpaid once the deposit-taker or third party
has paid as much of the amount held by or due to the liable person
as it is able (i.e. if the amount held or due is not enough to
cover the amount specified in the order), section 32EB(2) and
(4) provides that the order shall act as an instruction to the
deposit-taker or third party to pay to the Commission any amount
not exceeding the remainder of the amount specified on the order,
and is also required to do nothing which would otherwise reduce
the amount held by or due to the liable person. The order will
therefore continue until the relevant time to have effect on any
future amounts received in the account, or which become due to
the liable person from the third party. Section 32EB(5) provides
that section 32EB will only have effect subject to regulations
made under sections 32EC(1) and 32G(2)(c). The 'relevant time'
will usually be the time at which the remaining amount is paid,
or the time at which the order lapses or is discharged. Section
32EB(6)(c) allows for regulations to set out other events or circumstances
which would bring the effect of the order to an end. It is intended
that such events or circumstances will include the death of the
liable person.
26. Section 32EC(1) allows the Secretary of State
to make regulations setting out the circumstances in which the
requirement not to reduce an amount held by or due to the liable
person may be disregarded and the amount reduced. Subsection (2)
allows the Secretary of State to make regulations providing that
the Commission's consent must be obtained in specified circumstances
Subsection (3) allows regulations to provide for an application
for the Commission's consent to the reduction of an amount held
to be made by (a) the deposit-taker or third party at which the
order is directed; (b) the liable person; and (c) any other account-holder
in the event of the account being a joint account. Subsection
(4) provides for regulations to give certain persons a right of
appeal to a court if the Commission does not consent to the reduction
of an amount held. Those persons to have a right of appeal will
include the liable person and any persons named as joint holders
of the account from which the deduction is being taken. Subsection
(5) specifies that the regulations may make provision regarding
the period of time within which a right of appeal against the
Commission's refusal to consent may be made, and the powers of
the court hearing an appeal against such a refusal. It is envisaged
that an appeal must be made within 28 days.
27. Amendment g160 inserts a new subsection into
section 32G(2), allowing the Secretary of State to make regulations
setting out the circumstances in which amounts standing to the
credit of an account are to be disregarded when making an interim
lump sum order, requiring the deposit-taker not to reduce the
amount, or paying the amount stated on the order to the Commission.
It is anticipated that these circumstances will include amounts
which not due to the liable person. Amendment g161 replaces subsection
(c) in section 32G(2). The new subsection (c) is similar to that
which it replaces, and gives the Secretary of State the power
to make regulations allowing the deposit-taker or third party
to deduct a specified amount towards the administrative costs
of processing the lump sum deduction order before paying an amount
to the Commission.
28. Amendment g162 adds to section 32G(2)(d),
which allows the Secretary of State to make regulations regarding
notifications to be given to the liable person as to the amounts
deducted and amounts paid under an order. If the account specified
in the order is a joint account, the regulations will provide
for any other account holders to also be notified.
29. Amendment g163 removes section 32G(4), which
allows the Secretary of State to make regulations providing for
the Commission's consent to be required in certain prescribed
circumstances before an amount held by or due to the liable person
can be reduced by the deposit-holder or third party. This is now
provided for in the new section 32EC(2).
30. Amendment g214 makes all regulation making
powers provided for in clause 22 subject to affirmative resolution.
This is appropriate given the wide ranging scope of the provisions
set out in clause 22.
Amendment g197- Disclosure of information relating
to family proceedings.
31. Amendment g197 inserts a new section 49AA
(Disclosure of information relating to family proceedings) into
the Child Support Act 1991. This clause ensures that disclosure
of information relating to family proceedings to the Commission,
or a person providing services to the Commission by a party to
the proceedings is not a contempt of court.
32. New section 49AB(1) sets out a list of proceedings
which are to be considered "family proceedings" for
the purposes of section 49AA. New section 49AB(3) gives the Secretary
of State the power to make an order amending section 49AB(1) to
change or add further proceedings to the list of family proceedings
provided that the other proceedings were commence on or after
the order came into force. This is a Henry VIII power, which is
needed to ensure that the definition of family proceedings in
section 49AA is kept up to date and relevant.
33. The order making power provided for in this
new clause is to be subject to negative procedure. Whilst a Henry
VIII power will usually be subject to affirmative resolution procedure,
given the nature and narrow scope of this power and the requirement
that the consent of the Lord Chancellor is required before the
order can be made, it is considered that a negative procedure
is appropriate.
Department for Work and Pensions
January 2008
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