Reforming child support - media briefing

04 Jul 2007

A guide to the Child Maintenance and Other Payments Bill

Thousands of children and their parents have been failed by the Child Support Agency to date. MPs will debate the Child Maintenance and Other Payments Bill for the first time on Wednesday 4th July.

Although the Government consulted widely on its proposals, it failed to take on board any of the concerns raised by a number of different agencies and looks set to repeat many of the mistakes of the past.

Five key areas are addressed within the new Bill:

1. Private agreements between parents
2. Maintenance calculation
3. Shared care and maintenance
4. Enforcing payment
5. Historic debt, compensation

This document takes each area in turn and outlines the Government’s proposed approach, followed by Resolution’s concerns and recommendations for reform.

1. Private agreements
The Government is hoping to significantly reduce the administrative burden for the new agency by encouraging more parents to make private arrangements for child maintenance. However, there is no clarity on how the Government will ensure that there is access to advice and help for those parents.

Private arrangements will not be enforceable making it difficult to see what incentive there could be for large numbers of parents to go down this route. Similarly, many parents may well take the view that ‘anything is better than nothing’ and settle for inadequate payments.

Resolution is calling for:
Rights for parents to register and enforce private agreements through the courts or via the new agency
Courts allowed to apply the child maintenance formula where they are dealing with other financial matters, for example in divorce
The ‘Twelve Month Rule’ abolished. This rule allows parents to ask the CSA to review agreements for child maintenance registered at court 12 months after the agreement was reached. It is used primarily by non-resident parents to lower their maintenance payments, and acts as a disincentive to parents reaching agreement.

2. Maintenance calculation
With a reported historic error rate of over 50% in maintenance calculation, improving the accuracy and transparency of the maintenance calculation process needs to be a high priority for the new system. But current proposals are rough and ready and are likely to lead to inaccurate and out of date assessments. In particular:

Gross income:
The use of gross income from historic tax year information may mean that assessments are based on information that could be one or two years out of date. For a parent with care to be told that they may be paid less now but will get more in a year or two’s time will be of little help when they are struggling to make ends meet. A non-resident parent whose income has fallen by 24% (insufficient to ask for a review of payments) could have real difficulty making payments.

Under the Government’s proposals, the level of maintenance paid will differ depending upon the level of income receive/tax rate paid. It is not fair that a higher level taxpayer will pay a higher percentage of their ‘net income’ in child maintenance than a basic taxpayer.

25% income change:
A 25% change in circumstances before you can apply for a case review is likely to lead to real hardship. The figure is far too high and will make it virtually impossible for a parent to request a review. The aim may have been to remove the possibility of repeated applications where small changes exist, but these proposals go considerably further than this.

Periodic reviews:
Proposals for periodic review of cases will create a considerable administrative burden for the new agency and will prove to be an unrealistic target.

Resolution is calling for:
The ability to request a review where there has been a 15% alteration in income
Both parents to receive full information on which maintenance assessments are based
The ability to request a review where out of date income information is used, or where there is a significant difference between income and lifestyle
Removal of periodic reviews.

3. Shared care
The Government plans to continue the present arrangements, which create an incentive for parents with care to restrict contact for non-resident parents.

The present system encourages ‘day counting’ which means that many parents with care can be faced with a decision not to allow contact over and above a certain number of days because they cannot afford the reduction in the level of maintenance they receive.

Conversely, many non-resident parents do not pursue their right to a discount for fear that it might lead the parent with care to reduce the number of days they have with their children. Many parents are having to work outside the system in order to make arrangements that are in the best interests of their children.

There are cases where considerable sums hinge on one night’s stay in the year and others where children are caught in the crossfire. These cases are increasing and so the problem will proliferate. Continuing the existing system is likely to perpetuate the considerable number of appeals we see on this issue.

Resolution is calling for:
A system that allows the application of common sense
No adjustment except for overnight stays of three nights or more each week
Flexibility so that solutions can be shaped to a family’s circumstances rather than a ‘one size fits all’ approach.

4. Enforcement
Much has been made of proposals for stringent new enforcement measures - but these headline grabbing measures will do little to tackle the underlying issues.

The real problem is not that the existing agency lacks the necessary enforcement powers, but that it does not use them often or early enough.

There needs to be a strong enforcement much earlier but, with mistakes being made in more than 65% of cases where a liability order has been sought, any enforcement process must include the right to appeal. The system must be fair to both parents.

Resolution is calling for:
Greater and earlier use of appropriate enforcement mechanisms, such as the deduction from earnings order
Full appeal rights where a deductions from earnings order is obtained in respect of historic arrears
A right to appeal and an effective and speedy system for processing appeals where each parent has the right to be heard
Parents with care permitted to take their own enforcement action through the courts should they so choose
Retention of the requirement to apply for a liability order through the court system
Power to obtain a freezing injunction if the non-resident parent is likely to abscond.

5. Historic debt, compensation
There are many non-resident parents who face substantial arrears, which, in reality, are far beyond their ability to pay. Where enforcement comes late, it is often for large sums for which the non-resident parent had no provision and no ability to settle.

It is not uncommon for the CSA to accept unrealistic repayment schedules that continue long after the children have grown up. Whilst delays this long are unusual, less dramatic delays are commonplace and cause enormous hardship to families and children.

Negotiated settlements with the consent of the parent with care should be central to the recovery of historic debt.

With 3.5 billion uncollected arrears including 760 million of debts so old they are no longer legally enforceable, it is clear that many children have been badly let down by the CSA.

Resolution is calling for:
Compensation for those cases which have been mishandled and where the debt can no longer be legally enforced
Compensation to the parents with care where debts have been written off
A clear independent process for parents to make a claim against the agency for maladministration.

For more information, or to arrange an interview with a member of the Resolution CSA team on any of the issues raised in this briefing, please contact:

Teresa Richardson
Head of Communications
T - 0207 357 9215
M - 07894 981 020
E -