§ 7.27 p.m.
§ Baroness Andrews rose to move, That the draft regulations laid before the House on 5 July be approved [25th Report from the Joint Committee].
§ The noble Baroness said: My Lords, the regulations before us today make a number of amendments to eight of the many sets of regulations which provide the structure of the old and the new child support schemes.
§ The amendments cover a range of regulations, some affect the old child support scheme provisions and some the new scheme, and the rest, both schemes. Included are amendments to the transitional regulations, which provide for the transfer of cases from the old scheme to the new scheme. Some cases—linked to new cases—have already moved from the old to the new scheme.
§ I could not introduce these regulations without referring to the fact, as noble Lords will know, that there have been problems with the new IT system. I can reassure the House that the agency is working closely with EDS, the contractors, to correct the defects as a matter of urgency. We have made it clear that we will not make arrangements to transfer cases from the old scheme to the new until we are satisfied that it is working well. In the mean time, we need to ensure that the legislation for both schemes is kept up to date and is fit for the purpose. Hence this group of changes.
§ This package consists mainly of clarifying and technical amendments which support the policy intention. I shall give a brief explanation of each regulation. I shall group them according to the status of the scheme, starting with the amendments to the old scheme. I am always happy to provide more detail if noble Lords want it and to reiterate that some of the changes in this package, to make them fit for purpose, are being made as a consequence of changes elsewhere in other legislation; for example, the introduction of the educational maintenance allowances.
§ To help noble Lords—I hope that it has been a help—we have provided a schedule to allow noble Lords to see how the regulations, as amended, will look. That is for guidance only and has no legislative status. I hope that is helpful.
§ I turn now to the amendments and will concentrate on the old scheme. Regulation 4 amends Regulation 17 of the Child Support (Maintenance Assessment Procedure) Regulations 1992, which provides for the revision of child support decisions in the old child support scheme. The amendment introduces a new 976 subparagraph into paragraph (1) of Regulation 17. The subparagraph itself mirrors changes that have already been made to the Social Security and Child Support (Decisions and Appeals) Regulations 1999, for new scheme cases, so we are bringing that into line. It allows the agency to revise the decision appealed at any time between receipt of the appeal and determination at an appeal tribunal. Where the appeal is revised in the appellant's favour, the appeal will not go on to tribunal. Instead, the appellant will receive a new decision, with new appeal rights.
§ Regulation 5 amends the Child Support (Maintenance Assessment and Special Cases) Regulations 1992, which provides the basis for old scheme child support liabilities to be assessed. One amendment is made as a consequence of the introduction of a national scheme for the educational maintenance allowance, following, as noble Lords will know, a very successful pilot exercise. EMA payments are made to young people aged 16 or over who continue in education. In most cases the person receiving EMA will be the child of the Child Support Agency's client. But, in a very small number of cases, the beneficiary could be the client, or the partner of a client. The amendment ensures that in all cases EMAs do not count as income.
§ Other changes have also been made to allow for travel-to-work costs to be calculated in metric measurements instead of imperial ones. The calculation will be made by a small stand-alone computer system, and, to avoid any possible confusion, forms and leaflets will explain that 240 kilometres is broadly equivalent to 150 miles.
§ Noble Lords may ask why we are making that amendment now. The regulations as they stand can be interpreted as already compliant with the EU directive because there are generic regulations—DTI regulations—converting imperial measurements in existing legislation. However, the regulations apply in a fairly broad-brush manner. Therefore, in order to remove any prospect of uncertainty, we have introduced this amendment which puts the legal position beyond doubt.
§ A further amendment made by Regulation 5 reflects financial help recently introduced by the Government for employees who have become fathers or have adopted a child. In common with similar payments, statutory paternity pay and statutory adoption pay are included as earnings.
§ I turn now to the second group of the new scheme. Regulation 2 amends Regulation 6B of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 which, among other things, provide for decision making in child support. Regulation 2(2)(a) and 2(2)(b) make minor clarifying changes of a somewhat technical nature in relation to the operation of what we call the tolerance rule in child support. Briefly, this rule means that small changes in income are ignored and do not lead to changes in maintenance due. The importance of that to the parent and family is that it provides parents with some stability and certainty of the amounts of maintenance payable. We all know how important that is.
977§ Regulation 2(2)(a) covers cases where both income and non-income changes—for example, the arrival of another child—are notified together and the non-income change leads to recalculation of maintenance. In these circumstances the new liability will take account of both changes, irrespective of whether in itself the income change would breach the tolerance rule. As I said, this might be where there is a change in the number of qualifying children and a small change in net income of a non-resident parent of less than 5 per cent. In these circumstances the CSA would alter maintenance to take account of both changes.
§ Regulation 2(2)(b) makes clear how we deal with cases where an earlier reported change in income did not breach tolerance and so maintenance was unaltered. It ensures that any new liability resulting from a subsequent non-income change—for example, new shared care arrangements—will also reflect the earlier income change. Both changes will be effective from the date of the later change.
§ It is sensible to clarify these matters in legislation since, as maintenance is being recalculated because of non-income changes, the agency will also sweep up any small income changes.
§ Regulation 6 amends Regulation 29 of the Child Support (Maintenance Calculation Procedure) Regulations 2000. These provide for start dates for child support liability in specified cases. Some non-resident parents are liable to pay child support for children by different persons with care. Our term for these parents is "multiple parent with care cases". Existing legislation provides start dates for paying maintenance in these cases. The provisions assume that the first maintenance calculation, though in force when the application from the second parent with care was made, remains in force when liability for the second parent with care is calculated. However, this is not always the case.
§ Sometimes it will be the fact that maintenance for the first parent with care has come to an end after the second parent with care has made her application. This might be, for example, because the qualifying child in the first case has reached the age of 19 or found employment. The old scheme did not provide for this, or provided it in different ways, so the amendment provides new, initial start dates for these cases where liability in respect of the first parent with care has ceased before a maintenance calculation in respect of the new parent with care has been made. There will not be many of these cases, but, where they do occur, the current effective date provisions would be insufficient. That is why we need to make this change and remedy the gap that exists.
§ Regulation 7 amends the Child Support (Maintenance Calculations and Special Cases) Regulations 2000, which also provide for the calculation of child support maintenance in the new scheme. One amendment within this group mirrors the one which I have described in Regulation 5, providing for statutory adoption and statutory paternity pay to be treated as earnings. The remaining amendments in 978 this regulation are intended to clarify the legislation and to ensure that it reflects the policy intention. In the new child support scheme the maintenance due is calculated as a percentage of the non-resident parent's net weekly income. A parent with income of less than £5 a week is required to pay nothing. A non-resident parent on benefit is normally required to pay a flat rate of £5—but if their income, including benefit, is less than £5 a week, again a nil rate will apply. The amendments clarify that social security benefits are net weekly income for the purposes of establishing whether a non-resident parent can be assessed to pay nothing.
§ Regulation 9 contains two minor technical amendments to the Child Support (Variations) Regulations 2000, which allow for child support maintenance calculations to be varied in specified circumstances.
§ The final group of regulations applies to both schemes. Regulation 3 amends the Child Support (Information, Evidence and Disclosure) Regulations 1992. The amendment clarifies that when an appeal is made to an independent tribunal, the Secretary of State may disclose the relevant information to the non-resident person(s) with care and any other person with a right of appeal.
§ Regulation 8 makes several amendments to the transitional regulations. The transitional regulations ensure that there is a proper legal framework for the conversion of old scheme cases to the new child support scheme. They also allow changes in liability to be phased in over a period of up to five years in specified circumstances. I stress that the amendments ensure that the provisions in this area work as we intended them to. Some old scheme cases that are linked to a new application have converted or will convert early to the new scheme. The bulk of the old scheme cases will be transferred to the new scheme when, as I said, we are sure that it is working well.
§ Regulation 8(3) ensures that a conversion can happen on cases where there is an outstanding departure direction, revision or supersession which cannot be resolved until more information is provided. Here we will provide that the conversion decision will be based on the information used or considered to make the maintenance assessment being converted. When the full information becomes available, both the old and new scheme decisions will be corrected as necessary.
§ Amendments made by Regulations 8(4) and 8(7) allow the child support payable to a parent with care in the new scheme to be adjusted where a non-resident parent has overpaid maintenance under the old scheme. Regulation 8(7) also allows payments made by a non-resident parent in the new scheme to be attributed to arrears which accrued under a maintenance assessment in the old scheme. So these amendments essentially provide a bridge by which overpayments and underpayments of maintenance can be offset between the two schemes.
§ Those are perhaps the most significant changes in this package, which we readily acknowledge is very technical and very detailed. I intend to leave it there. If 979 noble Lords wish to raise other points of detail, I will do my best to respond or at least to reply in writing. The important point is that with these minor but important amendments we are trying to ensure that the new and old schemes operate as fairly and effectively as possible for the families and particularly for the children concerned. The regulations underpin our continuing commitment to ensuring that child support works for parents and children.
§ I am satisfied that the regulations are compatible with the European Convention on Human Rights, and I commend them to the House.
§ Moved, That the draft regulations laid before the House on 5 July be approved [25th Report from the Joint Committed].—(Baroness Andrews.)
§ Lord SkelmersdaleMy Lords, the House will be extremely grateful to the noble Baroness, Lady Andrews, for explaining these amendment regulations so clearly and so briefly. To summarise the changes that these regulations make to no fewer than eight existing pieces of legislation in such a way is indeed masterly. I applaud, too, the Explanatory Notes—provided originally, I understand, to the Joint Committee on Statutory Instruments.
I use the word "legislation" advisedly because one should never forget that much more law is made by statutory instrument than by Act of Parliament. That becomes especially important at a time in our history when so many Acts are framework ones, so that the devil is in the detail. Not that I have detected any devils tonight, though I do detect that amendments are being made to both child support schemes under the 1991 Act and the 2000 Act—what the noble Baroness described as the "old" and the "new" schemes.
As I understand it, the policy behind Regulation 2 covers a situation arising under both Acts and is to do with a change of circumstance; for example, the absent parent's income or a change to the number of children involved—which I would have thought would be a lot less likely. It must be very rare indeed that an absent parent of, say, two children would suddenly find that they are responsible for three living with their original partner. How many cases of that does the noble Baroness know of? Slightly more likely is a case where the absent parent has had more than one partner with children born to more than one partnership. Again, can the noble Baroness tell me how many maintenance payers—because that is what we are talking about that applies to?
The new recalculation rules make such perfect sense that I am surprised that they have not been in place since the commencement of the 2000 Act.
The clarifying Regulation 3 does not concern me. It is only fair that all parties to the appeal should have the information. However, like Regulation 4, which started under the 2000 Act, it corrects an omission, and now the revision or lapsing of an appeal against a child support decision will be the same as under the 1991 Act. Again one wonders quite how the omission occurred, but I shall leave that perhaps for another time.
980 Regulation 5 amends the two schemes by virtue of new legislation such as the statutory adoption and paternity pay and the educational maintenance allowance. I am not clear, however, who benefits when. Clearly, the educational allowance is person specific and should not affect maintenance. However, paternity pay given to an absent father should be included in the maintenance calculation, as should adoption pay.
It is all, in a sense, part of the maintenance calculation procedure, whose scheme is being amended by Regulation 6, which seems to tidy up a slight muddle in the definition of the date when an award is made. Circumstances change, such as when one child becomes 19—as the noble Baroness suggested in an example—maintenance is no longer payable and so a new calculation has to be made. As I understand it, the new regulation makes provision for a time overlap between the absent parent being contacted either before or after the change of circumstance.
I hope that I have that right. It is a complicated matter. Indeed, it is so complicated that I thought I heard the noble Baroness say that a change in income of 5 per cent would be tolerated. Did she in fact mean £5 a week, which I think is much more likely and is the figure given in the Explanatory Notes?
Finally, I observe, however much I regret it, that the word "partner" has now become established in English law. As far as child support is concerned, it is no longer necessary to specify what it means in each and every piece of legislation. I suspect that we will see a whole lot of social security orders where the definition of the word "partner" will be cited as that in paragraph (10)(c) of Schedule 1 to the 2000 Act.
For years after the setting up of the Child Support Agency there were complaints of its activities, both from the recipients of maintenance and from those from whom the agency collected the money. Those seem to have died down and I have not heard of any recent problems barring the introduction of the newish computer system to which the noble Baroness referred. With the large number of absentee parents—some 800,000, I believe—that is surprising. Can the noble Baroness confirm that the agency is now on an even keel and that the system is working well and will work even better once the new IT is up and running?
§ Baroness BarkerMy Lords, I too congratulate the noble Baroness on her introduction. She was given a job to do and it was perhaps one of the worst. In my experience, when the DWP announces that something is just "technical", it is time to run for cover. However, she stepped up to the plate and she did an extremely good job of introducing what I think her colleague the noble Baroness, Lady Hollis, would call "very techie" amendments. I thank her very much indeed.
I thank the noble Baroness also for providing the schedule of regulations. It was extremely helpful to see these provisions embedded within the clauses to which they relate. It helped to explain many points.
981 We on these Benches welcome quite a few of the provisions. We strongly welcome the provisions on the educational maintenance allowance exceptions. We also accept the overall proposition that minor changes in circumstances amounting to not much more than a small change in the non-resident parent's income should be within what the noble Baroness called the tolerance rules. We think that that is an example of effective administration. We welcome also the exemptions on statutory paternity pay and statutory adoption pay.
I noticed that the noble Lord, Lord Skelmersdale, resisted the temptation to deal with the regulations that recalculate distance in kilometres instead of miles. Why we do not make the rest of Europe multiply distances by eight and divide by five, I do not know—but it is a thought.
The point at which the noble Baroness started and the one on which the noble Lord ended is perhaps the key background to this—the two IT systems that the DWP is attempting to run, both containing roughly 1 million cases but neither working particularly effectively. As my honourable friend in another place, Paul Holmes, noted, and as my honourable friend Steve Webb noted over the summer, 76 per cent of cases are on the old system and 24 per cent are on the new, but neither of the systems is working very well. The noble Baroness rather glided over that. The payments perhaps do not involve substantial sums, but they are made to people who badly need them. The timing of payments is critical to their ability to balance their budgets and the bad performance has had a major effect on their lives.
One matter about which I am most exercised is in Regulation 8—the provision that seems to imply that people may be transferred from the existing system to the new system with incomplete information. The regulations refer to examples where assessments are made with incomplete information. Does the department have an estimate of how many people are likely to be transferred from the existing system to the new system with incomplete information, and, on average, how long it will take to find that missing information? Will assessments and payments start to be made on the new system based on incomplete information or will there be a pause or delay between the two?
The noble Baroness spoke with considerably more awareness than I have about cessation orders and continuation orders. From what she said, I take it that, if there had been an over-payment or under-payment on the old system, that would continue into the new system but, when payments were remedied, there would be a period of time under which the correction would take place. When those recalculations of payments are made, can the noble Baroness tell us—perhaps not now but in writing at a later stage—whether they are intended to be made over periods of time and whether they will be made in exact amounts or in bandings?
I think that the noble Baroness has been given an impossible job this evening—not in explaining the technical nature of the regulations but in defending the 982 department's computerisation. I have every sympathy for the people who have to use the system. It is clearly extremely difficult for them to do so with any sense of accuracy, but I have even more sympathy for those who are dependent on the system for the payment of small but necessary amounts, which impact on their household budgeting and their ability to keep their heads above water.
I thank the noble Baroness very much for the way in which she introduced the regulations. I hope that at some stage—perhaps not this evening—she may be able to answer some of the questions.
§ Baroness AndrewsMy Lords, I am very grateful for the welcome that noble Lords have given to the regulations and for the kind words that they have offered me. I appreciate that.
I start at the point at which the noble Lord, Lord Skelmersdale, and the noble Baroness, Lady Barker, finished—that is, matters relating to the future of the system. In evidence to Select Committees and in presentations to the House, no Minister has disguised the frustration that he or she has felt at the difficulties that we have had in implementing the scheme. Those frustrations are obviously shared in particular by the staff, who are desperate to make the scheme as good as possible, to make the payments as swiftly and accurately as possible and to ensure that the money reaches the children. We may be talking about small sums of money but they are critical sums.
I can tell the noble Lord that there is no doubt that the system is improving. A number of statistics now show that a steady increase in the number of cases is being dealt with and that there is growing capacity in the system. I shall give a few brief examples which indicate the volume of work with which the scheme is coping. The scheme started in March 2003 and, as of June 2004, the CSA received 404,616 applications of which 197,000 have been cleared and 117,000 have had maintenance calculations made on them. It is a huge undertaking involving a huge volume of work. Although the system did not prove as robust or as resilient as we had hoped, we are looking at a steady increase in capacity; we are dealing more readily and more speedily with the new cases that come in; and the cases which had become stuck are being freed up.
However, I reiterate—this goes to the heart of what the noble Baroness said about overpayments and underpayments and the timescale for ensuring that people receive the benefits of the schemes—that we cannot afford to transfer the old cases to the new scheme until we are absolutely sure that it is as good as it can be. That is where we stand in relation to that matter. But we are making progress and, in particular, claimants say that they prefer and appreciate the new simplified system. It is a huge bonus to them. But our prime concern is to protect their interests and to ensure that their maintenance is made, paid and maintained. I am grateful for what the noble Lord said about it.
Perhaps I may address the issues with which I am able to deal. In relation to the question raised by the noble Lord, Lord Skelmersdale, we do not know how 983 many non-resident parents become liable for an additional child with an original parent with care or another parent with care under Regulation 2. We know that people live very complex lives and sometimes additional children are born to the original mother, perhaps following a temporary reconciliation, or other children may be born to other, different mothers. We do not collect information on that, but more commonly the issue will arise when a new child is born into the non-resident parent's new household. I am afraid that that is as far as I am able to respond to the noble Lord.
The noble Lord asked about the tolerance rule and the figure of 5 per cent. I did mean 5 per cent. For the new child support scheme, we recalculate liability only when changes in net income exceed 5 per cent of the figure used in the current calculations. I probably did not make that clear. Therefore, under the old scheme, the tolerance rule ensures that payments of child support are adjusted in most cases only where the difference between the old and the new assessment is at least £10 per week. Therefore, it is slightly more complex.
The third point raised by the noble Lord related to Regulation 5. I can confirm that statutory paternity pay and adoption pay do count as earnings. I believe that that was the question that the noble Lord asked.
The noble Baroness asked me about the transfer to the new system. She raised the problem of incomplete information and asked whether we knew how long it would take to find the missing information. We do not know. We do not know many things about the length of time that matters are taking because the IT does not enable us to be certain of some of them. However, obviously we want as much complete information as possible to be used as the basis of the assessments and as soon as possible. Again, that is a reflection of how we need the scheme to be as robust as possible.
The noble Baroness asked about the process of overpayments and underpayments. Because this is quite a technical issue and good social security practice relates to both schemes, if the noble Baroness will allow me, I shall write to her on that point.
If I have not picked up any of the questions raised by the noble Lord or the noble Baroness, I shall read Hansard very carefully and follow up those points of detail. In the mean time, I again commend the regulations to the House.
§ On Question, Motion agreed to.