HL Deb 14 December 1995 vol 567 cc1377-86
Lord Mackay of Ardbrecknish

rose to move, That the draft regulations laid before the House on 16th November be approved [1st Report from the Joint Committee].

The noble Lord said: My Lords, your Lordships will recollect that the last time we met to debate the issue of child support, the fundamental principles of the child support scheme, in particular the principle that parents remain responsible for the financial support of their children, received widespread support. However, your Lordships indicated during those debates that there continued to be dissatisfaction with various aspects of the child support scheme and with the operations of the Child Support Agency.

The regulations before the House today, in building on the provisions of the Child Support Act 1995 which noble Lords will recall we passed in the Summer, and in introducing other improvements, address some of those concerns. In particular they provide for clarification of procedures for the recovery of overpaid maintenance; simplifications and improvements to the procedures for the review of a maintenance assessment; the removal or suspension of the reduced benefit directions in certain circumstances; and compensation for reductions in maintenance resulting from changes in child support legislation. Other more technical changes include provisions for handling information, the effective dates of maintenance assessments, and some minor changes to the maintenance assessment formula, including the treatment of housing and travel to work costs.

I start with the recovery of overpaid maintenance. The inadequacy of the existing provisions to allow for the reimbursement of sums of maintenance overpaid by the absent parent has been a cause of some concern. Section 23 of the Child Support Act 1995 introduced powers allowing the Child Support Agency to make payments to reimburse absent parents in circumstances where the overpayment cannot be reasonably recouped by reducing the current maintenance assessment. Regulation 3 specifies the circumstances in which a parent with care may be required to repay such a payment.

Regulation 2 makes provision for all or part of any child support maintenance arrears, including arrears relating to a period before the assessment was made, to be offset against any income-related benefit which may have been paid in place of that maintenance. Previously, adjustments have been made by using general benefit provisions. This amendment places the power to retain the arrears in child support legislation.

I turn to the review of the maintenance assessment. One of the major advantages of the child support scheme over its court-based predecessor is the potential for regular review of the circumstances of the relevant parties and the subsequent adjustment of the amount of maintenance, where appropriate. However, the review process has proved to be more complex and therefore more time consuming than had been originally envisaged. These regulations will help to alleviate this situation. Under the existing provisions, when a change of circumstances is notified the child support officer must carry out a full review of the maintenance assessment. The process is complex and time consuming. Every detail of information has to be re-confirmed and appropriate verification supplied again and again.

The 1995 Act made provision for a limited review to be made in these circumstances. Regulations 24, 25 and 26 introduce provisions which allow the child support officer to deal with the notified change only, plus any other changes of which he is aware.

Regulations 27 to 31 make amendments to the tolerance rules which dictate whether a fresh assessment will be made following a review. A further problem with the completion of the review process has been the failure by parents to comply with requests for information.

The 1995 Act introduced sanctions against parents who fail to comply with a review of their maintenance assessment. Absent parents face the imposition of an interim maintenance assessment at a higher punitive rate (Regulation 17) and the parent with care risks having her assessment withdrawn unless she is in receipt of benefit (Regulation 35).

Regulations 7 to 10 and 35 provide both that parents will be warned of the consequences of failing to provide this information, and for a number of technical changes to the requirement to furnish information.

There have been some minor difficulties with cross-referencing in the drafting of these regulations. We had hoped to put them right with a correction slip. However, we have now been advised that since the amendments, though minor, are slightly more than just typographical errors the correction slip can have no effect on the regulations. We are therefore currently putting together a very small package of negative regulations to achieve these amendments. They will come into force at the same time as the regulations to which they refer. Therefore, the problem of some of the numbers being out of kilter will cause no difficulty when the regulations come into effect.

Section 46 of the 1991 Act provides for the child support officer to impose a reduced benefit direction. The deduction is made where a parent with care who is in receipt of benefit refuses to co-operate in the pursuit of maintenance and does not have good cause for her failure to do so. In taking this step, such parents are passing the burden of maintenance for their children on to the taxpayers. The Government still believe that it is right to impose a sanction on parents who make this choice.

During debates on the 1995 Act, concern was expressed in your Lordships' House regarding these provisions and the difficulties caused by them to parents with care living on already restricted levels of income. We do accept that the imposition of the reduction could cause particular hardship in certain cases and exemptions for certain parents with care are introduced by these regulations. Regulation 37 allows a parent with care who is disabled or has a disabled person living with her to be exempt from a reduced benefit direction. Where a parent with care is having deductions made from her Income Support to recover arrears of housing costs, fuel or water charges allowed under Regulation 38, that regulation will allow for the suspension of the benefit penalty.

In Section 24 of the Child Support Act 1995 the Government provided for regulations to be made to enable payment of compensation to people receiving family credit or disability working allowance who would otherwise lose money as a direct result of specified child support legislation changes which reduced their maintenance.

During the passage of the Bill the Government spelt out that provision of compensation would be "broad brush" and would provide for compensation at the rate of 50 per cent. of the reduction of maintenance assessments arising from the April 1996 regulation changes. In all cases, this would result in beneficiaries

receiving more than 50 per cent. of their maintenance reduction. As this is the earliest legislative opportunity to introduce these regulations payments have, in the interim, been made by way of ex gratia payments. Almost 5,000 payments have been made. These regulations provide a statutory framework for any future provision that might be necessary.

We have always said that we would keep the child support scheme under close scrutiny to ensure that it is fair to all; fair to children, parents with care, absent parents, second families and taxpayers. These changes, plus other reforms which we have recently introduced, will ensure that we achieve that goal. I commend the regulations to the House. I beg to move.

Moved, That the draft regulations laid before the House on 16th November be approved [1st Report from the Joint Committee].—(Lord Mackay of Ardbrecknish.)

3.45 p.m.

Baroness Hollis of Heigham

My Lords, as these regulations are within the framework of the Act, it would not be appropriate today to use them as an opportunity to open up a wider debate on the Child Support Agency. Instead, I wish to press the Minister a little on some of the points that he made. First, as regards the review process, it is administratively sensible to review the changes that have taken place rather than to start the assessment all over again. That is wise and sensible, particularly as we know that the working and effectiveness of the CSA has been subverted by, among other things, the complexity of its formula. It has accounted for the fact that approximately three-quarters of all CSA assessments have been wrong or have been incorrectly arrived at. We hope that the regulation will reduce the number. Although the Government may make much of fraud, it is worth reminding your Lordships that government administrative error, caused largely by complexity, accounts for higher overspending than any problems of fraud within the system.

The second issue that the Minister raised was overpayment on the one hand and arrears on the other; they are Regulations 2 and 3. As regards Regulation 3, the Minister referred to a clawback of overpayment when overpayment had been made to the parent with care. The assumption was that that overpayment was made by an error within the agency during the assessment. The parent with care had, in good faith, assumed that that was the appropriate sum, had adjusted her financial circumstances accordingly and had spent the money. Will the Minister assure the House that where the error has been the fault of the CSA, the CSA will not expect to chase that money on the ground that it would be unreasonable to risk the parent with care being exposed to financial hardship through no fault of her own?

The Minister is seeking to claw back arrears of maintenance. The point is that where arrears of maintenance have finally been paid, and would have been paid, to a parent with care on benefit the Treasury and not the parent with care will retain that sum. None of the money that the Treasury seeks to recover through the arrears procedure will go to the benefit of children. All of this is about saving the Treasury money and not lifting children out of poverty. Can we hope that if not now at least in the near future the Minister will revisit a point of common agreement on the Opposition Benches; that this Act would have had consent from more absent parents and parents with care if some element of the maintenance, however modest, was retained by the parent with care for the children, even if that parent were on benefit?

The Minister raised the issue of family credit. It is sensible to regularise the situation as regards ex gratia payments which the Minister was honourably and properly obliged to make following changes to the Act. However, perhaps we may take the opportunity to review the situation in which the six-month rule damages the parent with care? A parent's family credit may be fixed assuming maintenance of, say, £40 per week. Let us suppose that for whatever reason the former partner, the absent parent, has become unemployed, or has lost his overtime or has failed to pay maintenance. However, because the family credit was fixed at a particular figure based on a certain level of maintenance, which has fallen, and because of the six-month rule the family maintenance cannot float up to compensate.

Throughout our debates on the child support regulations and subsequent amendments, the Minister insisted that the six-month rule remained. It is a broad-brush rule; there are winners and losers, swings and roundabouts, and all is well. However, when it suits the Government to depart from a tough formula, they do so. They did so when they were the authors of the changes to the regulations and more recently when we debated the earnings top-up for childless couples who when they have a child can then swing from the six-month rule, analogous to family credit, to family credit itself. Therefore, on two recent occasions the Government have departed from the rough justice of the six-month formula. May we hope that they will do so again?

The Minister spoke of the reduced benefit sanction for parents with care who failed to co-operate with the agency in revealing details of the absent father. One of the worries that Members on the Opposition Benches had throughout the debates—and our fears have not been entirely alleviated—was that parents with care who feared domestic violence might feel pressured by financial circumstances to give information that it was unwise for them and their children to give to the agency. Will the Minister tell the House how many benefit sanctions there have been? How many have been appealed against on grounds of domestic violence and how many appeals have been accepted and the benefit restored? That information would be useful to us.

It is worth emphasising that none of the changes in the regulations makes the parent with care and her children any better off. Most are regulations either to follow changes to the Child Support Act made last summer, to help the absent parent, or they are changes to help the Treasury. There are three adult parties in the CSA social contract. These regulations benefit the party who has shouted the most—usually, the absent father—and the party which is powerful enough; namely, the Treasury. However, the parent with care, simply because she does not abdicate her responsibilities and does not desert and walk away from her children, receives nothing at all. Her children remain in poverty. One child in three in Britain is in poverty. These regulations will do absolutely nothing to help those children.

3.50 p.m.

Earl Russell

My Lords, these regulations give effect to a number of changes that arise from the 1995 Bill. I am sure that the Minister and the noble Baroness have memories, as I do, of many exhausting hours in Committee in this Chamber. I am glad to see that they were to some effect.

Some of the changes are minor and some are even quite good. They do not give rise to any particularly profound concerns although I was rather surprised that Mr. Mitchell, when he introduced these regulations in another place, referred to a sharp diminution of complaints about the Act. With regard to my own postbag, would that were so. I am sure that my honourable friends in another place will say the same. It may be that the proportion of complaints which is coming to my party is slightly higher than it was, but I am certainly quite unaware of any diminution.

I noted what the Minister said about a new package of negative regulations. He might perhaps agree with the remark of John Locke when he saw the proofs of his second treatise: Printers have ways all their own, not united by the general fairness which cements mankind". It would be helpful if the Minister would send me a copy of the regulations when they are ready. I should be very surprised if I found anything to which I should pay further attention.

The principle of the regulations on family credit and disability working allowance is welcome and I have welcomed it before. In passing, I should thank the Child Poverty Action Group which first drew attention to the problem which the regulations are meant to rectify. However, I agree with what the noble Baroness said. Since there have been one or two breaches in the six-month rule, can that be regarded as a little less sacrosanct when people suffer from its operation?

As regards the other regulations, I should be grateful if the Minister would explain further Regulation 43(5). I am not quite sure exactly what that regulation does.

I warmly welcome Regulations 37 and 38. Those laid down that there shall be no reduced benefit direction depriving the mother of 20 per cent. of her benefit for disabled parents with care or for parents with care who are already suffering substantial deductions. That is a welcome change although, of course, it is no substitute for the abolition of the reduced benefit direction.

Those result from amendments tabled in Committee by the noble Lord, Lord Carter. That is another area in which the Opposition parties are in full agreement. I thank the Minister and I thank the noble Lord, Lord Carter, for drawing the matter to the Minister's attention.

I was a little unhappy about the wording of Regulation 10 which requires the production of information subject to penalty within 14 days. One does not now have to be rich to be occasionally on holiday for more than 14 days. During this winter's 'flu epidemic, I have known a good many people who have been in bed ill for more than 14 days. Unless that 14-day limit is applied sensitively, it may cause quite substantial injustice.

Regulation 6, which allows the use of one's national insurance number for identification, may help to avoid some of those unfortunate cases where people were accused of fathering a child born while they were still small boys. I should be glad if that could be diminished.

But the main operative matter is the extension of interim maintenance assessments if information is not provided. In principle, I have no objection at all to that. But it depends on the CSA being able to open its post. Mr. Mitchell knows, because I have had occasion to write to him 10 times in the past six weeks, that it is very often a matter of dispute whether or not the maintenance inquiry form has been returned. Since Miss Chant will not yet have received my letter, I thank her very warmly for clearing up the last case of that kind which I referred to her.

The Government might be well advised to make it a condition for people returning information to the CSA that it be sent by recorded delivery and that a copy should be retained. As Mr. Mitchell said, it is very difficult to resolve those cases where one party says, "I did", and the other party says, "I did not", and you do not know whether the form was ever posted or whether it has gone astray. That is one major proviso that I would make as regards being happy with that regulation.

The other proviso is that the CSA could do more than it has to make its requests intelligible. The Minister will remember having a good deal of fun at the expense of NACSA during our arguments in Committee on the Bill. But the laugh can occasionally go the other way. It has recently carried out a survey of its own members as regards the issuing of interim maintenance assessments. The Minister will understand that its members are not the GSA's strongest champion but they have received interim assessments with only half the frequency of people dealing with the CSA as a whole. That seems to me to suggest that the advantage that those members have is that they understand the procedure rather better. Therefore the Government may consider, when they are facing non-co-operation, whether the problem is not an adamant determination to wreck the Act, as they are sometimes tempted to think, but a real difficulty in understanding its operations, which I frequently share.

Having said that, I welcome the main body of the regulations. I am sure that the Minister is an old enough hand not to mistake a Christmas truce for termination of the war. I still believe that within 10 years, whoever is in office, this Act will be repealed.

3.57 p.m.

Lord Mackay of Ardbrecknish

My Lords, I am grateful to the noble Baroness and to the noble Earl for the welcome that they gave to parts of the regulations. I noted with interest that the noble Earl has told me that I should not take today's welcome as in any way a diminution of his campaign against the Child Support Agency and his view that it should be abandoned and abolished.

I hope that I shall be able to answer a number of the points raised by the noble Baroness and the noble Earl. If I fail to cover any particular point, I shall write afterwards.

I start by turning to the general questions raised by both noble Lords; that is the question about family credit and the six-month rule. We had a lot of debate about that and I do not wish to go over it again. I believe that there are very good reasons for keeping family credit as sacrosanct as possible as regards the six-month rule. After all, the ruling does not always act to the disadvantage of the party. On a swings and roundabouts principle, I imagine that it sometimes acts to the advantage of the party. But its main advantage is that it gives the parent with care some security over what her income is likely to be from family credit over the six-month period.

We felt that it was right to soften that in relation to changes that we have made to the legislation. But I cannot hold out any hope to the noble Baroness that we should be prepared to go further in considering freeing up the six-month rule because the more we free it up, the less it will become a six-month rule and the more family credit will become a monthly, fortnightly and weekly benefit. I do not believe that that would be in the best interests of the people involved. It would certainly create a far greater administrative burden than the current situation.

Therefore, while I know that my answer will be a little disappointing to the noble Baroness and the noble Earl, I hope that they appreciate—and I believe that they do—that there are strengths in having a six-month rule. That, I suspect, is why they occasionally ask me to shift it at the margins. However, it is difficult to keep on shifting it at more and more margins. I hope that my response answers the point about the six-month rule.

As we are talking about time limits, I shall answer the noble Earl's point about the provision of information within 14 days. I can reassure the noble Earl that, while that is the rule, it will be applied sensibly. Quite clearly if a client has difficulty in supplying the information within that time, then sensible weakening, so to speak, of the extra time will be allowed; in other words, he will be given extra time in order to return the form. However, that will only apply in certain, special circumstances. I hope that that helps to reassure the noble Earl that we are not going to be absolutely rigorous on the 14-day time limit.

The noble Earl also raised a point on interim maintenance assessments. I am happy to tell the noble Earl that interim maintenance assessments which were introduced in large numbers at the beginning have been reducing very considerably. For example, this year the proportion has reduced to 15 per cent. Indeed, last month it was down to 11 per cent. which is quite a considerable reduction. I hope that that will be of some help to the noble Earl and that it will show that the system is actually beginning to work much better than, perhaps, it did at the beginning. I believe that there are considerable points of progress in that respect.

I should tell the noble Earl that, so far as concerns the postbag of my department, there has been a considerable decline in the number of complaints that we receive from Members of Parliament since the changes that were made earlier in the year. Indeed, the situation is very much better. Dare I say to the noble Earl that it does not surprise me when he says that he receives quite a number of complaints. The reason is that he and his party have quite a close relationship with NACSA which is an organisation designed to complain about the Child Support Agency. Therefore, if I wanted to see where complaints come from, I might easily look to that kind of combination. The fact is that, for the wider Members of the other place, the number of complaints is quite considerably down. Indeed, the progress that the agency is making in its processing and accuracy work would suggest that the complaints ought to keep reducing. Of course I do not believe that they will ever reduce to zero because there will always be some men out there who, bluntly, do not want to pay anything to the parent with care. I believe that we should live in the real world in that respect. I give way to the noble Earl.

Earl Russell

My Lords, will the Minister concede that not all complaints come from men?

Lord Mackay of Ardbrecknish

Yes, my Lords; I will concede that. However, as I am sure the noble Earl is well aware, a great majority of them do come from men.

The noble Earl asked me about Regulation 43(5). I should say that the first amendment is intended to secure the policy intention that payments under a mortgage protection policy are to be ignored to the extent that they exceed the allowance for the mortgage interest in an absent parent's protected income. The second provision is for the calculation of protected income to take account of any payment of child maintenance which an absent parent or his partner is liable to make under a foreign court order. That is the background to those two provisions.

The noble Baroness, Lady Hollis, asked me if the regulations will reduce the number of errors. I believe that I have answered that point, but I can tell the noble Baroness that the CSA is continuing to improve. Indeed, its recent performance has been very encouraging — around 70 per cent. of maintenance arrears now checked prove to be correct. The significant simplification in the review process that we are looking at today will, I believe, make the information that we need to collect easier to obtain. It will also mean that the processing of the review will be very much quicker and easier. That ought to help absolutely everyone: parents with care and absent parents.

I turn now to Regulation 3 and overpayments resulting from agency error; in other words, official error overpayments. Those are technically left to the discretion of the Secretary of State, but my honourable friend the Parliamentary Under-Secretary in the other place, Mr. Andrew Mitchell, made it very clear during the final stages of the Child Support Act 1995 that consideration will be given to the circumstances of overpayment. If it were wholly due to official error, it would be very unlikely that repayment would be required. So there is a discretion. I hope that that assurance will help the noble Baroness who, I believe, asked me that question.

I believe that I have answered all the questions of detail that were raised. The noble Baroness and the noble Earl indicated one or two fields in which we still do not agree; indeed, I mentioned the one about family credit. Another one is that, if the arrears come in, the parent with care may not actually benefit because, of course, she has already had her income support payments which included the theoretical amount which ought to have come in if the absent parent was paying.

I hope that the child maintenance bonus which is to be introduced from April 1997 will allow parents with care to gain up to£5 per week from maintenance in a lump sum to be paid to them when they leave income support for full-time work. I hope that that is at least a step in the direction of helping the parent with care back into work and also letting the parent with care see that some of the money coming from her absent husband or former husband does in fact benefit her when it comes to that change-over into work. I see that the noble Baroness wishes to intervene. I give way.

Baroness Hollis of Heigham

My Lords, I thank the Minister for giving way. As it looks as though the noble Lord is about to wind up his response, I should like to ask him one further question. It relates to an area of concern which has already been debated and explored in the House and for which I should like the up-to-date figures. Can the noble Lord say how many reduced benefit sanctions there have been on parents with care because of refusal to co-operate with the agency? How many of those cases have been appealed on the grounds of fear of domestic violence and how many of those appeals have been granted? That was one of the major areas of concern. We hope that our fears will be allayed, but perhaps the Minister can help us in that respect.

Lord Mackay of Ardbrecknish

My Lords, I am sorry to say that I did not mention that matter in my response. The fact is I do not have the relevant numbers to hand, and I did not want to try to speculate. However, I shall write to the noble Baroness with those figures when they become available. Having said that, I commend the regulations to the House.

On Question, Motion agreed to.