§ 7.28 p.m.
§ The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham)
rose to move, That the draft regulations laid before the House on 13th March be approved [23rd Report from the Joint Committee].
The noble Baroness said: My Lords, the regulations make a number of amendments to nine of the sets of regulations that govern child support. This package is largely made up of amendments to regulations governing the new child support scheme and to the transitional regulations which relate to the transfer of cases from the current scheme to the new arrangements. The transfer will take place in due course, when we are satisfied that the new arrangements are working well.
In addition, the package includes a small number of amendments to the current scheme. They are designed to protect the interests of parents who find themselves in certain specific circumstances, as I shall explain. It is important that we provide such protection for those clients who will continue to be subject to the current rules for some time yet.
Your Lordships will recall the Statement made in another place on 20th March about the introduction of the new and simpler child support scheme. I have nothing to add at this stage in the way of extra information except to assure your Lordships of my intention to keep this House updated on progress towards its implementation. Obviously, if I can answer any queries I shall be happy to do so.
Many of the amendments in this set of regulations make minor technical corrections. Others simply serve to reflect the intended detail of the new scheme legislation. In the limited time available this evening your Lordships would not be well served by my explaining the intentions of each amendment one by one, and they were not discussed in any detail in the other place. However, with the permission of the House, I shall draw attention to some of the more significant changes, which I am sure your Lordships will agree are benevolent.
Regulations 3 and 9 relate to departures and variations. These amendments relate to the disregard of vCJD compensation payments. One of the "current 592 scheme" amendments to which I referred a moment ago relates to the departure scheme. Under the current rules it is possible to depart from the standard formula assessment in certain circumstances. One of the circumstances in which a departure direction can be give is where, for example, a party to the maintenance assessment—that is, the non-resident parent—has an asset worth more than £10,000 which is capable of producing income but which is not being used to do so. Regulation 3 amends the current scheme so that certain payments made under the compensation scheme for victims (and families of victims) of variant CJD will not be regarded as assets for the purposes of departure. In other words, they are simply disregarded and therefore not taken into account to affect upwards the liability.
Regulation 9 therefore includes a corresponding amendment in respect of the variations scheme which will, under the new rules, replace the departure scheme. So the same disregard under the current scheme will be carried forward into the new scheme. I am sure your Lordships will welcome that.
Those payments are made in recognition of the pain and suffering endured by the victims of this terrible disease—and by their families—and are intended to help reduce any financial hardship they may face. I am sure your Lordships will agree that such payments should be ignored in the calculation of child maintenance in circumstances where they would be disregarded when considering entitlement to income support.
Regulation 5 reflects the income support enhanced disability premium in exempt income under the current scheme. So a further current scheme amendment under regulation 5 concerns the calculation of the exempt income figure. This represents the income which parents need for their own personal expenses and it also includes allowances for any of their children who are living with them. It is therefore not taken into account when making a maintenance assessment.
Regulation 5 amends the Child Support (Maintenance Assessment and Special Cases) Regulations which govern the assessment of liability in the current scheme and include the rules for calculating the exempt income of each parent. The exempt income figure is based on income support rates. Last year, as part of the Government's commitment to provide additional help for the most severely disabled, the Government introduced the disability income guarantee, which provides for a new higher rate of premium in the income-related benefits. The amendment provides for an amount equivalent to the enhanced disability premium to be included in a parent's exempt income calculation. It applies where either that child, or its parent, if they were on income support, would satisfy the conditions for payment of the premium. Again, this is another benevolent activity where this income is effectively disregarded.
I turn to Regulation 4, which relates to information, evidence and disclosure, and better information gathering. We are all agreed that children are entitled 593 to the financial and emotional support of their parents. Whether they live together or apart, both parents are responsible for supporting their children. Unfortunately, not all parents share that view and some do all they can to avoid their responsibilities. Regulation 4 therefore amends the Child Support (Information, Evidence and Disclosure) Regulations. It adds to the categories of persons who are required to provide information or evidence for child support purposes and brings Northern Ireland and Scotland into line with England and Wales. It will mean, among other things, that for both current and new scheme cases the Child Support Agency will be able to seek information from driver and vehicle licensing in Northern Ireland and from the Scottish and Northern Ireland prison services. Again, it is a straightforward adjustment as to from whom we can seek information.
Regulation 8 relates to transitional provisions, in this instance the extending of appeal time limits. I am sure your Lordships will agree that this is another benevolent change. Regulation 8 of this package makes a number of amendments to the complex rules governing the transfer or conversion of the existing caseload to the new scheme as set out in the Child Support (Transitional Provisions) Regulations.
One of the more notable changes is an amendment to the time limit for appeals against a conversion decision—that is, the decision setting out someone's liability under the new scheme. Parents will be advised of their new scheme liability in good time before the new rules actually apply to them. It may be six months ahead or even longer. Normally the appeal time clock would start ticking from the time they are notified, even though that may be six or nine months ahead of when the conversion actually takes place. They may then find that by the time they are affected, the clock has run out on the time limit for appeals. That seemed to me to be unfair. They were notified well in advance of when it would come into effect and, particularly if self-employed, they may not realise the extent to which the clock is ticking and how they may have lost their ability to appeal. Therefore I sought and succeeded in extracting from the appeal system an amendment which provides that the deadline for appeals against a conversion decision will be extended from one month after the conversion is given—that is, notified—to one month after conversion actually takes place. In other words, parents will be able to retain the right to appeal from the time they first learn about their conversion decision right up until one month after it takes effect. That is simply because, unlike almost every other scheme, there is a long period of notification and people should not lose their right of appeal simply because they can assume they can appeal once it takes effect rather than once they have been notified.
Regulation 2—decisions and appeals—makes a number of amendments to the Social Security and Child Support (Decisions and Appeals) Regulations which set out the rules for revising and superseding child support decisions. This is about the information needed when a decision-maker is adjusting the liability. Among other things, the amendment provides for a maintenance calculation to be revised 594 back to the beginning in cases where a person who had been named as the non-resident parent turns out not to be the parent of the child, usually following DNA testing but not invariably so.
When a person with care applies for a maintenance calculation (maintenance assessment in the current scheme) the CSA will make one unless the nonresident parent denies parentage before the calculation is made. If the non-resident parent does so deny, then the agency can only go ahead with a maintenance calculation in certain prescribed circumstances; For example, where he has adopted the child. If the nonresident parent denies parentage after a calculation has been made, he may undertake CSA DNA testing or apply to the court for a declaration of non-parentage. If the outcome of either is that he is not the child's father, any maintenance calculation will be revised back to the beginning. Again, this is a benevolent change.
Those are the main changes. Most of the rest are tiny tidying up drafting changes. But I am sure your Lordships will agree that the disregard of disability payments, the disregard of vCJD payments, the extended period for appealing and the right for a person to have the maintenance calculation revised if he is found not to be the child's father are benevolent changes. As a result, I hope that the House will give the regulations full support.
Moved, That the draft regulations laid before the House on 13th March be approved [23rd Report from the Joint Committee].— (Baroness Hollis of Heigham.)
§ Baroness Noakes
My Lords, I thank the Minister for her explanation of the regulations. As usual, it was a model of lucidity, making everything seem extremely simple. However, those of us new to this area do not find these matters simple. We have nine substantive regulations amending nine sets of orders under the power of two Acts, one of which is amended by the other. They deal with the old scheme of child support and the new scheme of child support and the transitional provisions. If that is not complicated, I do not know what is. However, I am learning that complexity is a hallmark of work and pensions matters. I am hoping to acquire a fraction of the Minister's expertise one day.
Perhaps I may refer to the computer system. The Minister referred to the Statement last month by the Secretary of State for Work and Pensions in another place. We learned that there had been further delays in implementing the systems, which were due to come onstream first in October 2001, then this month. They have now been delayed sine die. When does the Minister expect the systems to become operational? That is an important issue for those waiting for the new child support system.
In addition to an estimate of timescale—I find it curious that no estimate has yet been given of when the system is expected to be fully operational—will the Minister say something about the reason for the delay? My noble friend Lord Higgins at Second Reading of the Child Support, Pensions and Social Security Act 595 2000 two years ago, warned of the problems of running two different systems and an inevitably complex transitional system. Is the problem in implementing the new system its complexity? If complexity is not the root cause, will the Minister explain what the problems are?
I turn to the regulations. I welcome the amendments in the regulations which implement disregards for payments under the variant CJD compensation scheme. They are highly desirable amendments. We congratulate the Government for proposing them.
I have two detailed questions. First, in Regulation 2 there is a provision—which the Minister explained a moment ago—for maintenance calculations to be revised from the beginning where a man turns out not to be the parent of a child. That seems sensible. Does that provision apply only to the new scheme of child support and not to the previous scheme? If so, will the Minister say why?
My second question relates to Regulation 5, which allows the enhanced disability premium in income support to be included in a parent's exempt income, to which the Minister referred. That is clearly to be welcomed, but does it apply only to the former child support scheme and not the new one? Again, if so, will the Minister say why? With those small technical queries we welcome the regulations.
§ Earl Russell
My Lords, Frederick the Great would ask his new recruits three questions. First, "How long have you been in the service?"; secondly, "How old are you?"; thirdly, "Are you content with your officers and your pay?". One of his recruits, being Silesian, spoke nothing but Polish, so he was taught the answers to the questions by heart.
But Frederick the Great chose to ask the questions in the wrong order. "How old are you?" "Eighteen months." "How long have you been in the service?" "Eighteen years." "One of us is mad!" "Both, your Majesty."
Approaching the regulations, I feel rather like that. I do not know whether I have discovered a hornets' nest or a wasps' nest. I do not know whether I am being extremely stupid or whether a cock-up has happened at the administrative end.
I have no objection to the contents of the regulations. They are benevolent in intention and many will be benevolent in effect. That is not the problem. My problem is what is being amended. We know that on 20th March the right honourable Mr Alistair Darling deferred the introduction of the new scheme because of a computer problem. Computer problems are far too common with government, but I am the last person in the world with any authority for saying how to deal with them, being completely computer-illiterate. I regret that I have no helpful suggestions.
As the noble Baroness, Lady Noakes, pointed out, it is clear that the right honourable Mr Darling is not at all certain when he intends to introduce the new scheme. He is clearly not satisfied with the service he is receiving from EDS. On 20th March, he said, 596the contract with EDS specified that the Department will not pay for the computer system until it meets the standard required, and that remains the position".—[Official Report, Commons, 20/3/02; col. 316.]One may say that the former Department of Social Security and the Department for Work and Pensions' faith in EDS has continued in the face of a remarkable amount of evidence to the contrary.
Be that as it may, we must consider what is being amended. The Explanatory Memorandum, for which I thank the Minister warmly, makes—as I thought—a clear distinction between the existing scheme and the new scheme introduced by the Social Security Act 2000, which, as I understood it, was to come into force next April, but now is not to. According to paragraph 3 of the Explanatory Memorandum:The draft Child Support (Miscellaneous Amendments) Regulations 2002 make amendments to a number of the sets of regulations which govern child support. Most of the provisions amend regulations governing the new child support scheme. Some amend the transitional provisions which provide for the conversion of cases from the existing to the new scheme. A small number amend existing scheme regulations".I should be grateful if the Minister would distinguish the small number which amend existing regulations—with which we have no problem—from those which amend transitional provisions and tell us how they are affected by the decision to postpone the transition, and those which amend rules not yet in force. I have trouble in interpreting the Explanatory Memorandum in that it is not dated. I do not know whether it was written before or after 20th March. That appears to make a considerable difference as to how it should be read.
§ 7.45 p.m.
§ Baroness Hollis of Heigham
My Lords, I understand the push of the noble Earl's original question about which provisions apply to the current scheme, the transitional scheme and so on, but why does he believe that the events of 20th March make any difference to his question?
§ Earl Russell
My Lords, I want to know which regulations and laws the provisions are intended to change; whether the intention was to change what is now not coming into effect or whether it was to change what is in effect and therefore can be changed.
I understand that one may make a change with reference to the future only. However, Regulation 1(3) specifies that,These Regulations shall come into force as follows—(a) subject to sub-paragraph(b), these Regulations shall come into force on the day after the day that they are made".Sub-paragraph (b) excepts Regulations 2 and 4(a), both of which the Minister helpfully explained. If the regulations are to come into force tomorrow, and the laws which they are to amend are not to come into effect until an undetermined time in the future, I do not see what is being attempted. One can provide that a law will be amended when introduced. I understand that; it is daily practice. One can amend a law already in force. I do not understand how one can amend with 597 effect from today a law which will not come into force until tomorrow. That is my problem. That is where I do not know whether I am being extremely stupid or whether there has been an administrative cock-up. I do not know whether I have discovered a hornets' nest or a wasps' nest.
While consideration is being given to that question, there are one or two provisions in the regulations to which I wish to draw attention. I hope that the Minister now understands why the question of the dating before or after 20th March is material in this respect. I am interested in the proposal to allow a correction where it turns out that a person is not the father of the child. That is very clearly equitable, not to say just. What really strikes me is the legislative universe into which we are moving whereby we have to invoke the full panoply of legislation in order to make it possible to cease charging a man for a child of whom he turns out not to be the father. This is a piling of Pelion upon Ossa in terms of regulation, which leads to a process that goes on and on.
When the Minister was doing this before, I remember describing the process as "piddling", as the garage man said to my father-in-law when he tried to top up his radiator when it was almost full. I believe that that term is in fact apt. As always, the wording of the regulations leaves a great deal to be desired. I am grateful to the Minister for her explanation of some of the regulations. However, although the Minister explained Regulation 4(a) perfectly well, she did so in English. I am not sure that I can say the same for what is written in the regulations. For example, it reads:(a) after sub-paragraph (a), there shall be inserted—'(aa) where regulation 8(1) of the Maintenance Calculations and Special Cases Regulations applies (persons treated as nonresident parents), a parent of or a person who provides day to day care for the child in respect of whom a maintenance calculation has been applied for or has been treated as applied for or is or has been in force, with respect to the matter listed in sub-paragraph (1) of regulation 3(1);' and".After reading that passage five times, it seemed to me that it probably meant what the Minister said it meant. I should like to thank her very much for the translation, but it should not have been necessary.
I wonder whether the Minister is now in a position to tell us what these regulations are amending; for example, whether it is existing law, future law, or transitional provisions. Alternatively, if it is a mixture, can the noble Baroness tell us what proportions apply?
§ Baroness Hollis of Heigham
My Lords, I thank both the noble Baroness and the noble Earl for their questions. I begin with the substantive point made by both speakers; namely, when the computer system will become operational. Perhaps I may remind the House that, at the end of April of this year, we proposed to take on the new cases that would filter through the system. Subsequently, around a year or so later when we were confident that the system was secure, we intended to take on the existing caseload. We are not confident that the proposed new system is secure for new cases, primarily because, in our judgment, it has not yet been sufficiently tested so that the risk of any 598 major problem arising is acceptably low. It is possible that the system will not face significant problems, hut it has not received the sustained testing required.
Crucially, as your Lordships will recall, one of the changes under the new system that has been broadly welcomed is that the parent with care will retain up to £10 of maintenance paid. This means an interface of the new computer with the IS/JSA systems. That interface does not currently exist. The IS/JSA computer is 20 to 25 years old. For the sake of all the parents on benefit—a substantial proportion of the caseload—we must be very sure that that interface is secure if such payments are to be made. We need to know that this type of detailed testing will survive when we throw a heavy caseload at the system. Therefore, the Secretary of State made it very clear that we shall go ahead with taking on the new cases when we are confident that the testing has shown that the risk is as low as we can make it and that the system will work. I am not in a position to tell the noble Baroness how long that process will take. Obviously, I hope that it will be carried out as quickly as possible. We must be sure that the system is robust to handle the proposed workload.
We consulted the voluntary organisations and discussed the matter with those concerned at the same time that the Secretary of State made his announcement to Parliament. They entirely support what we are seeking to achieve. They would prefer a system with the risks minimalised to one where we deliver to our original target time but where the risk might be unacceptably high. Indeed, in that case we might have particular problems with the interface of the IS/JSA system. Having said that, I should point out that that does not automatically mean that the existing caseload will come on stream a year afterwards. We may, or may not, be able to reduce that time. We must ensure that the system is robust. There is no automatic read across in this respect.
I am trying to be frank with the House. I must emphasise the very difficult decision with which the Secretary of State was faced—
§ Earl Russell
My Lords, perhaps I may be excused for making what may appear to be an irrelevant intervention at this point. I have just realised that I forgot to make an apology to the Minister for not giving her advance notice of the points that I intended to raise this evening. I should point out that I only worked out my queries in the 20 minutes before the matter came before the House. Nevertheless, I very much owe the noble Baroness that apology, which I beg her to accept; it is sincere.
§ Baroness Hollis of Heigham
My Lords, I am most grateful. As the noble Earl, Lord Russell, commented, I recognise that these regulations are extremely technical in their phraseology. He is quite right. When you have regulations to amend regulations under a Bill, it is very hard to decipher what is going on once you have delved back into the past. I wonder whether the House is now content with the explanation that I tried to offer on the substantive issue raised; namely, 599 the timing issue. One is trying all the time to make a judgment on meeting a proposed timetable that increasingly looks risky. Given the number of cases with which we shall deal on a month-by-month and day-by-day basis, I hope that noble Lords will understand that we cannot afford an unacceptably high risk to those clients. I give way to the noble Baroness.
§ Baroness Noakes
My Lords, I am much obliged to the Minister for giving way. We still have no idea of timing. Before going ahead with the system live, I assume that the department has had some detailed discussions with EDS over the nature of its concerns and that there is an agreed programme of testing, remedial work, and so on. Indeed, that is normal in such cases. However, can the noble Baroness tell us what timescale the department is working to with EDS? I fully accept that further problems may emerge; for example, the early results of testing may highlight more problems; and, indeed, there may be further issues to be unravelled. Nevertheless, I find it odd that there is no timetable to be shared with the House.
§ Baroness Hollis of Heigham
No, my Lords; I cannot give the noble Baroness the information that she requires. We are working very closely with EDS. I am sure that the noble Baroness will recognise that the contract we have with EDS means that no money is paid until the system is handed over in working order. Therefore, EDS has every incentive to work with us, not only closely—which is the case—but also as speedily as possible. I have no complaints about the resources that EDS is throwing at the system. It could be argued that the system has been sufficiently tested to assure us that the risk is as low as we can make it. However, at the end of the day, we are asking for quite complicated interfaces to be developed. As I said, we are not yet confident that that is the case.
I wish that I could be more helpful to the noble Baroness, but I genuinely have no further information to give her. We are not talking about commercially-sensitive issues. I am simply saying that neither I nor the Secretary of State know at what point we shall be sufficiently confident that the risk is minimal, and when we shall be ready to come to Parliament and give a date for what we call "A day"—namely, the take on of new cases.
The noble Baroness asked about the parentage revision and to what it applied. The revision applies only to the new scheme because the current scheme uses the cancellation provision to dispose of the maintenance assessment where a non-resident parent (an NRP) turns out not to be a parent. It is a new way under the new scheme of doing what we currently have a power to do, but, given the new structure of the scheme, this does not carry over. The noble Baroness also asked about the enhanced disability premium. She will understand that, in future, where the NRP—I use a gendered word, as this could apply also to the noble Baroness, though most NRPs will be male—has an income of £200 a week, he will be paying a percentage 600 slice of his income. Therefore, particular ingredients of this are not affected. Obviously, if the person is on benefit income, or in receipt of an income of less than £100 a week, he will be paying a flat rate £5—every penny of which, incidentally, will be going to the parent with care, not to the Treasury. Therefore, it is, indeed, child support.
Finally, the noble Earl, Lord Russell, asked two questions. The first concerned the regulations. He asked whether, as he put it, this was a major hornets' nest or an issue of drafting; no, it is not. Regulations 6, 7 and 8 come into force when the regulations are made, but they amend regulations which will come into force only when the new child support scheme begins. They are amendments with immediate effect to regulations which will come into effect only with the new scheme. The noble Earl is right to pick us up on that, but "it is OK", if I can put it in those words.
The noble Earl asked what Regulation 4(a) means. It concerns shared care. If both parents share equal care of a child, regulations provide that the nonresident parent is the person who is not in receipt of child benefit.
§ Earl Russell
My Lords, I thank the noble Baroness for giving way. I may be able to save her some trouble. I said that I did not understand that in the original draft but that I did understand perfectly the Minister's previous explanation.
§ Baroness Hollis of Heigham
My Lords, I would certainly say something different the next time around, which would only add to confusion. I shall seek to conclude here and hope that I have addressed your Lordships' queries.
§ Baroness Noakes
My Lords, I may have misunderstood the Minister's reply. The question I asked was in relation to Regulation 5, the enhanced disability premium and the disregard or the inclusion in exempt income. I asked whether that applied only to the old scheme and not the new scheme, and if so, why?
§ Baroness Hollis of Heigham
My Lords, perhaps I may explain to the noble Baroness that questions such as sources of income do not come into play under the new scheme because it is a simple slice of the formula. Under the existing scheme we have protected income, exempt income and so forth. As a result it does not matter about the income flows. I was trying, which possibly added to the confusion, to make a difference between levels of income and when those percentage slices kicked in. However, I believe I have addressed the question asked by the noble Baroness.
§ On Question, Motion agreed to.