§ Mr. WebbTo ask the Secretary of State for Social Security under her proposals for reform of the child support system, what the combined loss would be through higher taxes, lower means-tested benefits and higher maintenance of an absent parent with earning of(a) £90 per week, (b) £150 per week and (c) £210 per week with two children from a first relationship and one subsequent child, who is awarded a pay rise of £10 per week, assuming that the proposed working families tax credit has been implemented. [50004]
§ Mr. Denham[holding answer 10 July 1998]: All children are entitled to the financial and emotional support of both their parents wherever they live. It is not right that so many non-resident parents should seek to avoid paying the maintenance which their children are due. An extra £15 million is being invested in the Child Support Agency this year and next, specifically aimed at increasing the amounts of maintenance which are paid.
The information set out in the table is based on the current provisions for Housing Benefit and Council Tax Benefit, which are themselves under review. The impact of the new child support arrangements would, therefore, need to be considered in the light of any proposals for changes to those benefits.
Also, an increase in income will not necessarily result in an immediate change in the child support assessment. As with the current arrangements, we propose that most 183W cases would normally fall to be reassessed every two years, with interim changes of circumstance taking effect only if maintenance were to increase or decrease by more than a specified amount, for example, £10 per week.
Changes in income (£ per week) Gross earnings Assessable income Impact on net income (+ = gain, - = loss) From To From To No rent LA rent PRS rent £90 £100 158.07 164.25 +2.95 -1.07 -1.07 £150 £160 180.73 183.88 +2.15 +2.15 +0.10 £210 £220 199.00 202.02 +3.02 +3.02 +1.06 Notes:
1. Based on April 1998–99 benefit rates but assumes that the Working Families Tax Credit (WFTC) taper is 55 per cent. and the threshold is £90
2. The assessable income in the second column is the sum of earnings (after tax and national insurance) and WFTC entitlement and, as with the current scheme, is the amount to be used in the calculation of maintenance under the new child support arrangements. Assessable income for Housing Benefit and Council Tax Benefit also includes WFTC as well as some other forms of income
3. Average Rent is assumed to be £41.70 for local authority cases and £66.40 for Private Rented Sector cases
4. Based on average Council Tax of £11.70 per week
5. Non-resident parent's new child assumed to be 8 years old
6. No child care costs
7. The fall in income includes the effect of increased taxes and employee national insurance; reduced WFTC, Housing Benefit and Council Tax Benefit; and increased maintenance assessments
8. Figures rounded to the nearest penny
9. PRS = Public Rented Sector; LA = Local Authority
§ Mr. BurnsTo ask the Secretary of State for Social Security on what basis child maintenance assessments will be reduced for those earning between £100 and £200 per week under the new Child Support Agency system. [53127]
§ Mr. DenhamOur proposals for a new child support system are set out in the Green Paper "Children First: a new approach to child support" (Cm3992). Where net income is £200 or more a week, maintenance will be assessed at 15 per cent. for one child, 20 per cent. for two children and 25 per cent. for 3 or more children, with allowances for any children in the non-resident parent's second family.
However, we recognise that a simple percentage approach does not adequately reflect the difficulties faced by non-residents parents on very low incomes. Those with a net income of £100 or less would, therefore, pay a flat-rate minimum amount of around £5. Those with net incomes between £100 and £200 a week would pay the flat rate on their first £100 with a percentage deduction from the balance, using a straight linear progression so that at £200 or more the standard deductions are applied to the whole of the income. The sample tables in the Green Paper illustrate the overall effects, which ensure that levels of maintenance payable on income between £100 and £200 will be lower than would apply using the standard deduction rates.
§ Mr. BurnsTo ask the Secretary of State for Social Security what exceptional circumstances are being considered by the Government in determining which cases should be referred to the new tribunal under the new Child Support Agency system. [53126]
184W
§ Mr. DenhamOur Green Paper "Children First: a new approach to child support" (Cm 3992) proposes that, where a non-resident parent is already contributing in some way to the cost of supporting his child, for example by meeting housing costs, he would be able to apply for a lower level of maintenance. Other child-related expenses, such as high costs of maintaining contact, will also be considered. The Green Paper specifically invites views on this aspect of the new scheme. However, there is a balance to be struck between making appropriate allowance for exceptional circumstances and simply re-inventing all the complexities of the current scheme by a different route.