Child Support (Miscellaneous Amendments) Regulations 2018
(5 years, 5 months ago)
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Baroness Buscombe
That the Grand Committee do consider the Child Support (Miscellaneous Amendments) Regulations 2018.
Relevant document: 41st Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, I begin by thanking noble Lords for bearing with me as I take these regulations through from a seated position. I want to say a particular thanks to the noble Baroness, Lady Sherlock, for giving me early notice of her response to the regulations, for which I am extremely grateful. The regulations were laid before both Houses on 12 September 2018. They enable the Government to make amendments to child maintenance legislation to deliver the new child maintenance compliance and arrears strategy. Let me give the Committee some context and background to the regulations.
The Government introduced a reformed child maintenance scheme in 2012. The reformed scheme provides stronger incentives for parents to work together following separation and, where possible, to make a family-based arrangement for maintenance, avoiding state intervention altogether. The Child Maintenance Service is there for families unable to make a private arrangement. It delivers a simpler scheme, avoiding the problems which beset the previous statutory child maintenance schemes. These draft regulations will strengthen the statutory scheme and introduce measures to prevent parents artificially minimising their child maintenance liability. They will also introduce new collection measures, close loopholes and broaden the sanctions that we can bring against the small number of parents who persistently fail to meet their obligations to their children.
Now that the majority of cases with ongoing maintenance have been closed on the CSA schemes, the Government want to draw a line under the regrettable legacy of the CSA and end the years of uncertainty that families who have historic CSA cases have experienced. For many years, these cases have been held in limbo. The debts outstanding are often small, and in some cases, when asked, parents have moved on with their lives and are not interested in pursuing the debt. These regulations will give parents in certain circumstances a final chance to tell the Government that they still want to consider taking action to collect their debt where it is likely to be possible at reasonable cost to the taxpayer. This will enable these cases to be closed finally in the next few years.
A small number of parents are currently able to lower their child maintenance liabilities artificially, or avoid them altogether, by drawing an undeclared income from assets. Whether this is via loans against the value of bullion or through the acquisition of virtual currency, the cultivation of a cash-poor but asset-rich lifestyle is a rare but growing method of evading child maintenance responsibilities. These regulations introduce new powers to address this problem. Where a client believes their ex-partner possesses the relevant assets, the Child Maintenance Service will investigate, escalating to its financial investigations unit if appropriate. If possession of a relevant asset is confirmed, and the value exceeds £31,250, a notional income will be calculated at 8% of the asset’s total value. This will be added to the total income used to calculate the maintenance due. It is recognised that assets can be acquired for legitimate reasons, which is why this power will be used in only a very small number of cases. The draft regulations protect assets in certain circumstances, including where the asset is used for business purposes or is the primary home of the parent or a child.
It has become evident that some parents are able to place all their funds in joint or unlimited partnership accounts, rendering them inaccessible to our current powers. These regulations extend the Government’s powers to enable the Child Maintenance Service to use regular and lump sum deduction orders in relation to joint and unlimited partnership bank accounts and to use lump sum deduction orders in relation to sole trader accounts. The introduction of this new power will mean that an additional £350,000 of maintenance per year may be collected for children.
To protect the rights of other joint account holders, a number of safeguards have been put in place to prevent deductions being taken from the other joint account holder’s funds. Joint or unlimited partnership accounts will be targeted only where there are insufficient funds in the parent’s solely held accounts. Before action is taken, the last six months’ account statements will be checked to establish the ownership of the funds. In a small number of cases where, despite investigation, it is not possible to establish how much of the funds within the account belong to the parent—for example, because no evidence is furnished as to ownership—a pro-rata approach will be adopted. This will assume that the parent’s share of the funds is equal to that of the other account holders. All account holders will be notified before a deduction order is made in respect of a joint account and given the opportunity to make representations in relation to the funds targeted. The standard representation periods will be 14 days for regular deduction orders and 28 days for lump sum deduction orders. All account holders will also have appeal rights. Further safeguards are in place to ensure businesses have sufficient cash flow to continue to trade. A deduction will not be taken if it would reduce the account balance below a reasonable amount; we suggest, for example, £2,000. There is also a requirement for the Government to review these provisions every five years.
Lord Kirkwood of Kirkhope (LD)
My Lords, I am very grateful to the Minister, who, in adversity, has done a splendid job in explaining these regulations. I cannot help but believe that somewhere on the premises there must be a parliamentary sedan chair, which I happily will take one end of until she is better, and I hope that that happens soon.
I am a member of the scrutiny committee, and its report is part of the discussion this evening. It was interesting scoping the report, and we got some really compelling evidence from both sides of the argument, from non-resident parents as well as parents with care. My track record on all this stuff is longer than I care to admit. I was around in 1991 when the original legislation was brought forward and produced the 1993 scheme. The economic environment within which these schemes were started is now different. In the past, I have always taken a Gingerbread approach to this. In 1991 and 2003, the thing that really exercised me was that there were people acting in bad faith as non-resident parents with considerable amounts of money, and, because of the bad blood between the parents, they were taking it out on the children. That is what set my measuring stick for working out how this happens. It is very difficult for the state to go behind the front door of any family and interfere in these circumstances, and we learned that the hard way. It is true to say that under both Governments—and I could not help either from the place I sat in in the House of Commons or in the House of Lords—the two legacy schemes have been really difficult for families. Misery is not too important a word because they exacerbated the relationship between the separated parents.
None of this is easy, and my heart goes out to the professionals who have been running these schemes. They have been dogged by IT difficulties, and the collection process has struggled. The honest truth is that the elements in these regulations, which largely I support, should have been carried out years ago. I was part of the 2008 Act that gave passport legislation authority to the department, and now in 2018 we are actually implementing some of that. In parentheses, there is an interesting question about why that is not happening in Northern Ireland. It may be that there are special provisions for Northern Ireland at the current political moment, for all I know, but I would be pleased to know why it is an exception, because I cannot think of any other reason than the fact that it is getting special treatment.
When the Secondary Legislation Scrutiny Committee looked at this statutory instrument, it looked at the fact that there is still only a 57% payment compliance rate. My colleagues on the committee, who have not been studying this legislation as long as I have, found it very hard to understand why a scheme of this duration was still getting only 57% payment compliance, and that is still an issue for me as well.
Concerns were expressed about the way in which assets are still being protected from actions in bad faith because of the difficulties of valuation. I understand that with physical assets such as works of art it is difficult to know how much they are worth, who owns them and so on, but we heard evidence in the committee’s investigation of this SI which demonstrated that yachts are being bought which, even under these regulations, cannot be attached to the liability due by the non-resident parent. That is too complacent. There must be some way of obtaining an independent valuation of an asset’s worth. I support the notional wealth which the regulations attach to assets but they do not go far enough, certainly in relation to some of the physical assets that the Secondary Legislation Scrutiny Committee heard about in evidence when considering these regulations. I will be interested in what the Minister has to say about that.
The evidence we received from non-resident parents led me to think again about the relatively different economic environment for child poverty that we are facing. Non-resident parents have that problem as well as parents with care. They do not get any credit within universal credit for making maintenance payments, which must be difficult for some non-resident parents. They made that point with some force in the course of the evidence they gave. The department made a fist of answering some of these points, but we were still left with real concerns.
People are nervous that we are closing down these schemes—no one will miss them when they go—but, when we move into the new child maintenance scheme, are we taking proper advantage of the opportunity to look at this in a slightly wider context than merely these regulations? They are welcome as far as they go. The weekly value of assets being considered is good, deduction orders, lump sums and additional write-off powers are understandable, and I have mentioned passports, but the communities which will be deprived of pursuing some of these liabilities in future deserve better legislative consideration of the impact that will be felt by them when all of these dramatic things happen.
It would help if there could be an update on how these schemes are proceeding towards closure—what the time frames are and whether there has been any slippage from the last time we discussed this in Parliament. I am still concerned about some of the issues that were raised by the National Audit Office report of March 2017. I am delighted that the Select Committee in the House of Commons is still interested in actively pursuing some of these issues. However, the NAO report did not make happy reading either.
There are a couple of issues I wish to ask questions about. The NAO made special reference to the fact that the department does not tell non-resident parents who have arrears that there is an opportunity available to them to renegotiate the debt on cause shown where hardship can be demonstrated. However, the department does not do that, I suppose for the obvious reason that it gives people an excuse to pay less, but in the situation that we facing in terms of child poverty and for the next couple of years, I think that some non-resident parents should be told about that. The claim they make for a reduction in their maintenance liabilities can be contested by the department and controlled in that way. The NAO was right to raise that. Keeping it secret is no longer defensible and I hope the department will think about that.
Baroness Sherlock (Lab)
My Lords, I, too, thank the Minister for her explanation of the regulations. I also wish that she is back to full ambulatory health soon. I was glad to have the opportunity to give her advance notice of the questions I will raise because some of them are quite technical. It would be great if she could answer them but if not, she should feel free to write to me.
Before I start, I want to pick on where the noble Lord, Lord Kirkwood, stopped. Most of the people in the House of Lords who have a passionate interest in this are in this room, apart from one or two who could not be here. We have been discussing these issues for a long time. The noble Lord, Lord Kirkwood, saying that he has moved on to a different perspective makes me want to rehearse briefly the fact that having an administrative system of child maintenance is incredibly important. Before it existed, the only way for single parents to get the money they needed to raise their kids was to go to court. It was expensive to get an order, to get it updated and to get it enforced, so the creation of an administrative system of child support really matters. It matters for those kids, the families and the country. It is a statement that you may separate from your partner but you do not cease to be responsible for your children, and the state will enforce that if necessary if the parents cannot afford to do so. I want to lay that on the record.
We should also note that, although the legacy schemes have had a range of problems, billions of pounds have changed hands and gone towards raising children. We should mark that. We should not say simply assume that the problems mean that we do not want to get this right going forward. The obligation to support your children is there, so I share the view that it would be good to have an opportunity to discuss more broadly the issues around child support policy. However, since Parliament has determined the amounts that should be paid by non-resident parents to parents with care, getting that enforced really matters and the regulations address that. In the light of that, I should flag up a historic and now rather distant remunerated interest as I was a non-executive director of CMEC for a time.
In essence, these regulations do two things. They allow the Government to write off significant debts arising from historic schemes and they introduce some new compliance measures to help with collecting future child maintenance. I want to look at each of those in turn to see whether it feels like a balanced package.
First, on the debt proposals, the Explanatory Memorandum says that there are uncollected arrears of £3.7 billion, with £2.5 billion owed to parents and £1.2 billion owed to the Government. DWP thinks that it would be too expensive to try to collect all this, so it proposes to separate the debt into two parts: that which it will make one last attempt to collect and that which it will simply write off. Where there has not been a payment in the last three months and, as the Minister explained, a CSA case started on or before 1 November 2008 and the debt is more than £1,000, or the case started after that date and the debt is more than £500, it will ask clients if they want it to try to collect the debt. If no representations are received, or collection of the debt is not possible, it may be written off. Can the Minister tell us how those representations will be sought? Will each parent to whom money is owed be written to individually?
Secondly, where there has been no payment in the last three months and the case started on or before 1 November 2008 and the debt is less than £1,000, or the case started after 1 November 2008 and the debt is less than £500, or the debt is less than £65, then the debt can be written off without asking the parents at all. Can the Minister tell us, if there had been a payment of some sort in the last three months, irrespective of how much was involved or when it started, would attempts carry on being made to collect the debt, even if it did not meet these criteria? If so, is there not a risk of what is known in the trade as moral hazard? In other words, does it not risk sending out a message to parents who have not paid to support their kids that if they simply do not pay for long enough, the Government will give up and they will benefit from having the debt written off?
To justify writing off historic debt while avoiding the moral hazard charge, it is incumbent on the Government to show that current child maintenance liabilities are being effectively enforced—a point made by the noble Lord, Lord Kirkwood. So is that the case? As the noble Lord mentioned, the current rate of compliance is 57% and it has been static for the last two years. Ministers are partly arguing that these regulations would add to the range of collection and enforcement powers the department has to drive up that statistic. Let us see whether we think they would.
There are basically three measures. First, the deductions from joint and unlimited partnership accounts, which is a welcome measure designed to prevent non-resident parents from evading their financial obligations by moving all their money into joint or unlimited partnership accounts. However, I would like to raise a point made in paragraph 11 of the 39th report from the Secondary Legislation Scrutiny Committee. It reports a concern—raised in a submission to the committee, on which the noble Lord, Lord Kirkwood sits—that the proposal to notify the other account holders of the intention to make regular or lump sum deductions and give them a set period to make representations could give the non-resident parent time to move the cash somewhere else.
The committee noted that the regulations provide that the interim order must include an instruction to the deposit-taker not to do anything that would reduce the amount standing to the credit of the account below the amount specified in the order. However, the Explanatory Memorandum also goes on to say that, in the absence of evidence to the contrary—the Minister reinforced this today—it will be assumed that the NRP has a share of the funds equal to that of any other account holder. So, if the deposit-taker is required only to keep in the account an amount equivalent to that specified in the order, is there not a risk that, in some cases, only a portion of that retained balance can be attributed to the non-resident parent, and therefore, when it comes to the attempt to reclaim it, there will not be enough left to meet the debt? What are the Government doing about that? I did say this was technical.
Secondly, I want to look at the effect of this measure. The self-certified impact assessment says that DWP expects that the use of this measure will result in 350 requested deduction orders from joint personal accounts in England and Wales per year and 170 from unlimited partnership business accounts. Based on the pattern of their use for sole accounts, DWP assumed 34% will be lump sum deduction orders and 66% regular deduction orders, and it expects a 60% success rate. When you crunch these numbers down—which I did because I am very sad—it means that, adding together personal joint accounts and unlimited partnership business joint accounts, you get a total of basically not very much. My sums suggested this meant that the department expected to issue only 100 successful lump-sum DOs and 200 successful regular DOs, which would have brought in about £350,000 a year in extra child maintenance.
However, about half an hour before I came into the Committee, I saw a letter—just published—from Justin Tomlinson to Frank Field, chair of the Work and Pensions Select Committee, in which he said that DWP analysis after the consultation estimated that these new powers would actually enable an extra 400 to 500 actions per year, yielding around £840,000 in additional maintenance. The letter said that the department thought the figure might be even higher still. Can the Minister tell the Grand Committee the current estimate of the number of cases in which these powers are likely to be used, and how much extra maintenance the department expects to collect?
Another question is on the confiscation of passports. The instrument also commences a power, set out in Sections 39B to 39G of the Child Support Act 1991, enabling the Secretary of State to apply to the court for an order to disqualify a non-resident parent who is wilfully refusing to pay from holding or obtaining a UK passport. This is again welcome but I wonder how well it would be used. The 39th report of the scrutiny committee quoted the department as saying:
“This measure will be used as a last resort, where all other enforcement actions have been found to be inappropriate or ineffective”.
When I went back to the methodology document that accompanied the consultation, it said that DWP expected approximately 20 cases per year where a court sanction would be applied. But then it became clear that that would be not 20 passports a year but 20 cases where court sanctions could be applied. Those sanctions might be passport removal but might be losing a driving licence or going to prison. That could mean this new power on passports might be in single-figure usage.
Again, the letter to Frank Field from Justin Tomlinson suggested that this power could be used in around 20 cases a year. Can the Minister explain whether that is 20 cases of passport confiscation a year or whether we are still talking about 20 cases of court sanctions a year, of which some may or may not be on passports? Either way, it is a very small number. Clearly, I realise that it is intended to be a deterrent as well but that was said of driving licences, yet we are still stuck at 57% enforcement. We have to ask: how effective is this likely to be?
The third and final category is on including major assets in the calculation of child maintenance liabilities. There has been lots of pressure on DWP for a long time to reinstate the lifestyle variation available under the previous regime, by which parents could request a variation to the calculation based on a disparity between the lifestyle of a non-resident parent and the income which they reported. Charities such as Gingerbread, along with the Work and Pensions Select Committee, have pressed DWP on this but to no avail. One of the presenting problems has been parents complaining that the NRP claims to have a low income, yet possesses considerable assets and a lifestyle that should be impossible on the income that he or she is declaring.
However, DWP decided not to do that. This is one of its proposals to deal with it instead by including major assets in the calculation of child maintenance liabilities. That is welcome but the scrutiny committee remains concerned about how it is to be done—a point alluded to by the noble Lord, Lord Kirkwood, who mentioned yachts. I do not often get to talk about yachts in my brief but it is the case that a specific submission was made to the committee of a parent who said that her former spouse had bought a yacht, yet nobody could make him pay over the amount of cash he was meant to do as support for the children.
It would seem from that case that there is a real situation out there. Yet in its 41st report, the committee managed to establish from DWP that the definition of asset does not include high-value items such as a yacht or a Rolls-Royce, because it is too hard to value them. In fact, the report said:
“This would seem to confirm our concern that the Non-Resident Parent can find ways of avoiding payment by buying goods with their cash assets and reinforces our view that the new formula for calculating income may make little actual difference”.
Given that that is the whole point of this power, can the Minister explain how the Government plan to deal with this issue and, again, how often DWP anticipates using these provisions?
In conclusion, we are in a position where compliance rates are stuck at 57%. I am doubtful that the package of powers we are discussing are likely to make all that much difference given that the biggest of them will, in the original calculations, affect only 450 children and bring in £350,000 a year. Alongside that, the Government are planning to write off debts of £3.7 billion, so basically we are talking about 0.01% of the amount that has been written off. Even if it is the higher £840,000 figure, my back-of-an-envelope calculations say that we are still talking about 0.02%. There is quite an imbalance.
I remain concerned about those who are slipping through the net—the noble Lord, Lord Kirkwood, raised this. In 2012, DWP estimated that 56% of CSA clients who chose not to apply to the statutory service would make a family-based arrangement. A survey by NatCen conducted between June 2015 and September 2016 found that three months after the CSA cases had been closed, only 18% had a family-based arrangement in place. A similar number had gone to the CMS but 56% had nothing in place.
Baroness Buscombe
I thank noble Lords for their contributions to this debate and for the constructive approach that they have taken towards today’s proceedings. I will now respond to some of the key issues raised. I will attempt to do this in order but I doubt whether I will succeed. I will do my best and if I fail to answer any questions, please be assured that we will write to the Committee following the debate.
I wish to put into context the justification for what we are doing. This has not been a quick or easy decision; it has involved exhausting other approaches to deal with the debt. We have also had numerous long debates and discussions within the department in trying to decide the best thing to do. We are talking about huge sums of money here. I say immediately that when considering resources and budgets, the truth is that we have to be proportionate—what is reasonable in the circumstances; what is more pressing; and what is more important. In our department we are already spending 25% of the entire government budget across Whitehall, so we have to think about resources and the degree to which we want to protect and support children going forward versus the difficulty of writing off such a considerable debt. We have to balance that against the fact that if we do not write it off and keep it on our books it would cost us approximately £30 million a year, which would not be money well spent. It has been a difficult balancing act.
Moving all the debt to the CMS IT systems would incur a one-off cost of at least £250 million, without the resources to action it. We have taken various actions to collect this debt, including using debt collection agencies to chase what is owed. More than 63,000 cases were passed to debt collection agencies for them to arrange collection, but after three years we took back 55,000 cases because the DCAs had not been able to make any debt collection arrangements.
This is our approach following exhaustive discussions, debates and thinking through what is fair to the taxpayer. As the noble Baroness, Lady Sherlock, said, the most important thing is to put the children at the forefront of our minds while seeking ways to send out the critical message that no one should cease to be responsible for their children. Enforcement matters.
I say to the noble Lord, Lord Kirkwood, that I absolutely respect his considerable and lengthy involvement on this really important subject. Of course, there have all along been compelling arguments on both sides. It is interesting what he said about the economic environment being different. Maybe there is also a sense that people are becoming more artful in how they seek to avoid their responsibilities, which is depressing. I am not sure what that says but the truth is that we must have the well-being of children at the forefront of our minds. In a sense, yes, these regulations are overdue, so it is important that we look forward. It is also important to say here that they form the first of two packages. We plan to lay a further set of regulations in 2019 to secure the remaining powers to deliver the 2018 compliance and arrears strategy. These will allow us to take a consistent approach to deduction from benefits.
I should explain that the regulations are being laid in two packages because the Social Security Advisory Committee needs to consider the regulations that make changes to deductions from benefits. But we would not wish to delay the rest of the regulations so that we may lay them all together. Those regulations are not yet drafted, so there is still time—I stress this—to take into account any thoughts on these provisions from noble Lords and honourable friends in another place. We welcome any input on that.
Lord Kirkwood of Kirkhope
That is an opportunity perhaps, under an SSAC consideration of the second package of regulations, for affected parents with care and non-resident parents to make submissions to the SSAC scheme later this year. If I understood what the Minister was saying, the Social Security Advisory Committee will undertake a normal consultation and will be looking for people to make submissions for consideration as the committee makes its recommendations. Am I right in thinking that?
Baroness Buscombe
I ask the noble Lord to bear with me, because I do not want to get this wrong. The answer is: only if the committee decides to report the regulations.
I will focus on some of the questions put to me, which are welcome. I start with the question from the noble Lord, Lord Kirkwood, on case closure timescales and the fact that there has been slippage. We are still on course to have ended all existing liabilities on CSA cases by the end of this year, 2018. The noble Lord referenced the NAO report. In that context, it is really important to say that we are continuing to consider the recommendations in the report. The department, in a broader context, has really taken on board that we need to be much better at listening. We thought that we were doing enough perhaps, but there is always more that we can do—within time and resource constraints, of course—but it is very important that we listen.
The noble Baroness, Lady Sherlock, asked how the representations will be sought. Will each parent to whom money is owed be written to individually? Depending on which category a case falls into, a client will receive a different letter or series of letters explaining what is happening and why, and, where appropriate, giving them the opportunity to ask us to try to collect their debt. These letters will be sensitively worded and will acknowledge that this may not be the outcome a client is hoping for. I was asked whether, if there has been a payment in the last three months, we will continue to collect. The answer is yes. If the case is in payment, we will continue to collect any arrears still outstanding for as long as the case remains in payment.
I was also asked whether our power to confiscate passports will be used only in a few cases. We will use this power in a targeted, proportionate way. I noted what the noble Baroness, Lady Sherlock, said about our having tried driving licences and asking whether that worked. The keyword here is “deterrent”. The vast majority of parents, we must stress, willingly pay towards their liabilities; we will seek to apply sanctions only in cases where parents wilfully refuse to pay. This happens only in limited circumstances. As with other enforcement powers, such as removing driving licences, the threat of exercising it can be very persuasive. The threat of denying people a passport is certainly something that stood out, when I first read the draft regulations, as something quite exceptional. I hope noble Lords will agree that it should send out a strong message to those who, frankly, are consistently refusing to take responsibility for their children.
The noble Baroness, Lady Sherlock, and the noble Lord, Lord Kirkwood, enquired about compliance rates for cases of collect and pay, asking what we are doing to improve the figure of 57%. The latest data, published in September, for collect and pay compliance shows it is going up; it is now 62%. Of the £1.85 billion due to be paid since the Child Maintenance Service began, £1.6 billion has been arranged through direct pay or collected through collect and pay while £290 million is currently unpaid—around 12% of the total. This percentage share continues to decline from 12.4% last year and 13.1% two years ago.
The CMS is not the only option available for separated parents to arrange child maintenance; it is there for people who cannot work together to make their own arrangements. The collect and pay service is in place for those parents unable to work together, who are less likely to be compliant. This means that the caseload is smaller but naturally more challenging than the CSA caseload.
The noble Baroness, Lady Sherlock, asked how many cases will be affected by the notional income power each year. We have not made projections on this point, but we anticipate the number to be small as, historically, only a small number of parents attempt to avoid their liabilities in this way. On the question of how many passports we expect to be disqualified every year, the figure referred to indicates that we project 20 applications for all types of sanctions will be made in the year. These include commitment to prison and disqualification from driving. Sanctions must only ever be a last resort; this is not just about how many we pursue but about targeting the right people. The threat often results in payments restarting.
The noble Lord, Lord Kirkwood, asked why the passport power is not being introduced for people in Northern Ireland. I can assure the noble Lord that this is not a particular sop to those resident in Northern Ireland who do not respect their responsibilities for their children. This is not being introduced in Northern Ireland simply because Northern Ireland citizens are entitled to an Irish passport; they have options for dual nationality, which would reduce the effectiveness of the power—they would simply find an easy way around it.
The noble Baroness, Lady Sherlock, asked whether giving periods of representation to account holders would mean that NRPs can move money to other accounts. This change is intended to close down a known loophole. If we intend to deduct a lump sum from a joint or business account, the funds will be frozen during the representation period. If parents move their funds to another type of account—for example, a sole account—we will target that account. If the funds are moved to an account we are unable deduct from, we will use our other strong enforcement measures to collect the debt.