The Social Security Committee considered the reform plans in a series of public meetings in September, and published its report on 10 November 1999. In essence, the Committee gave its qualified approval to the Government's plans for a radically simplified formula and more penalties for those who seek to frustrate the system.

On the new formula, however, the Committee did signal some anxiety, and recommended further research on the effect of requiring maintenance to be paid even where there is a 'second' family on income support. It also said that the forthcoming Bill should provide for possible adjustments to the standard percentage rates in the formula. For better-off parents, the Committee endorsed the principle that children have a right to share in the wealth of their parents, and so rejected the notion of an upper limit of maintenance (as did the White Paper). But it also thought that the earnings of a parent with care, once above a threshold, should be taken into account when making the assessment.

The enhanced role of the system in alleviating child poverty was welcomed. The Committee recommended that all parents with care on income support or income-based jobseeker's allowance should benefit from the 'child maintenance premium' (or disregard) from the date the new system commenced, and welcomed the removal of the mandatory involvement of the Child Support Agency (CSA) where the parent with care receives tax credits. Further, it was recommended that the reduced benefit penalty should be suspended during the phasing-in of the new system in order to give the new incentives a chance to work. The Committee also expressed reservations about unlimited access to the CSA in non-benefit cases – it takes the view that the taxpayer has no interest in such cases. Finally, it recommended that the Government consider creating a Child Support Advisory Committee (an equivalent to the Social Security Advisory Committee) to allow scrutiny of secondary legislation.

The Child Support, Pensions and Social Security Bill was published on 1 December 1999 and seeks to amend the Child Support Act 1991 and various secondary child support legislation.

The Bill is faithful to the plans set out in the White Paper. There is no mention of suspending the reduced benefit penalty or an early introduction of the 'child support premium'. In fact, the Bill provides for the operation of the former to be extended to cases where the parent with care refuses to take a DNA test to establish paternity. Elsewhere, the simplified formula, a new system of 'variations' to replace the current departures scheme (and excluding travel to work costs), and the expected financial penalties for non-co-operation or deliberate misinformation are all provided for. The effect is that significant change to the White Paper will depend on amendment during the passage of the Bill through Parliament.

The detail in the Bill confirms that there will be a 'basic rate' of child support, which will be a fixed percentage (15 per cent, 20 per cent or 25 per cent) of the non-resident parent's net income. The only exceptions will be a 'reduced rate' for those with net incomes of over £100 but less than £200, and a 'flat rate' for those with £100 or less on a prescribed benefit. Parents will be able to apply for 'variation' in specified circumstances, but only if the non-resident parent is making 'regular payments' of child support. A few non-resident parents will continue to pay no child support. The explanatory notes indicate those will be full-time students in advanced education, prisoners, those with a net income of below £5, and those on a prescribed benefit and with shared care of the child of a least 57 nights a year.

The new penalties include the introduction of a new offence of making a false statement or knowingly providing or allowing to be provided false information, and failure to provide information, both carrying fines on conviction of up to £1,000. Also included is a discretionary financial penalty of up to 25 per cent of the outstanding arrears for parents in arrears with their payments. The penalty will not be applied automatically, and the notes say 'it is envisaged that the penalty will rarely need to be applied'. As is now the case, imprisonment is an option where the Secretary of State has tried distress or enforcement through the courts. But in the new scheme disqualification from driving will be an alternative to imprisonment where the parent has 'wilfully refused to pay' or is guilty of 'culpable neglect'. Confiscation of passports appears to have been rejected.

The Bill received its second reading on 11 January 2000 and is expected to receive Royal Assent by Spring 2000. The new child support system, however, is not expected to be implemented until late 2001.

For more information, contact Simon Osborne at CPAG

Simon Osborne
Poverty 105, Winter 2000