Child Support Maintenance Calculation Regulations 2012

(Limited Text - Ministerial Extracts only)

Monday 2nd July 2012 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

Later today I will be publishing the Government’s response to the consultation on the regulations governing the calculation methodology for the new statutory child maintenance scheme. The consultation was held between 1 December 2011 and 23 February 2012.

The Government want to encourage and support parents to make their own family-based arrangements, but are committed to also providing a statutory service for those separated parents for whom this is not possible.

As part of the Government’s child maintenance reform programme, the existing two failing Child Support Agency statutory schemes will be replaced with a new, single scheme from October 2012 using a pathfinder approach.

The aim of the new scheme is to produce a faster, more accurate and transparent process for assessing child maintenance payments. This will be achieved with a new administrative framework which will include a single set of calculation rules, a single computer system and a link to information from HM Revenue and Customs (HMRC) tax systems.

We intend to lay the Child Support Maintenance Calculation Regulations 2012 later today, they complement existing primary legislation by establishing the amended statutory framework the new scheme will operate within. They cover the calculation of maintenance, including how income is determined and the circumstances in which calculations may be varied.

There were 36 responses to the consultation, all of which have been carefully considered. I maintain that the proposals outlined in the consultation provide a stable footing on which the new scheme can operate.

The Government consulted on increasing the flat rate paid by non-resident parents on certain prescribed benefits, or whose income is £100 or less, further than the £7 proposed by the previous Government. I am announcing today that we will increase the flat rate to £10 when we open the new scheme to all new applicants, in order better to reflect the costs of bringing up a child and reduce the gap between child maintenance paid by employed and unemployed non-resident parents.

The Government also consulted on reducing the percentage reduction from the non-resident parent’s income for those children who live in their household. This is to get closer to equalising the treatment in the calculation of those children living with and those living apart from the non-resident parent. I can confirm today that we will do that by changing these reductions to 11% for one child, 14% for two children and 16% for three or more.¹

I believe that these changes will help provide a fairer system for all of those parents who use the statutory child maintenance service in the future.

I will place copies of the consultation response and impact assessments in the House Library later today. The consultation response, impact assessments, regulations and explanatory memorandum will also be available on the Child Maintenance and Enforcement Commission (CMEC) and Department for Work and Pensions websites later today. See:

http://www.childmaintenance.org/en/publications/consultations.html.

¹A non-resident parent usually pays less maintenance if they are supporting a child living as a member of their household. The statutory calculation does this by reducing the amount of income used to set maintenance by one of three specified percentages.