Mr. William O'BrienTo ask the Secretary of State for Social Security what assessment he has made of the report of the Society of Practitioners of Insolvency, a copy of which has been sent to him, on the impact of family breakdown in finances of Britain's absent parents. [6238]
§ Mr. Andrew MitchellThe report on personal insolvency issued by the Society of Practitioners of Insolvency in May was the first in that series to identify maintenance commitments as a separate cause of insolvency. The majority of the cases sampled—over 66 per cent.—specified business reasons as the cause of their insolvency while only around 3.5 per cent. cited divorce or maintenance commitments but the figures do not differentiate between spousal maintenance and child maintenance.
Responsibility for their children's maintenance applies as much to those who live apart from their children as to those who live with them. By implication, the figures in 499W the report suggest that some people living with their families have also found it difficult to balance family expenditure and other bills. Under the child support schemes, absent parents retain at least 70 per cent. of their net income as assessed under the formula after paying current maintenance, to give them sufficient flexibility to manage their remaining expenditure. In addition, child support debts are not provable in bankruptcy proceedings, which means that other debts actually caused the insolvency in cases which named maintenance debt as a reason. The report offered no analysis of these cases.