Welfare Reform Bill

Lord McKenzie of Luton Excerpts

Monday 28th November 2011 Grand Committee

[Baroness Turner of Camden]

My Lords, I do not want to add much to what has been so well said already in support of the amendment. On the other hand, we have been talking about other Bills while discussing this one, and I note that some of the information that we have from, say, Citizens Advice, indicates that it gets a lot of applications from individuals who have no idea of their entitlement and need assistance with that. If people do not know what they are entitled to, it is easy for them to make mistakes in claiming. That may very well have happened in the cases that have been cited this afternoon.

Moreover, it does not say in the Bill exactly what the prescribed amount of penalty will be, so apparently in addition to giving back the overpayment a penalty would be involved. That would mean that somebody who is already very vulnerable and who has no money could be in difficulty on paying both the penalty and the overpayment. I suggest that the Minister looks at this part of the Bill as it could do with a bit of rewriting in line with what a number of Peers have had to say this afternoon.

[Lord McKenzie of Luton]

My Lords, my noble friend Lady Drake has opened an important probe on these provisions, and other noble Lords have emphasised some of the practical difficulties that they create. I hope that the Government will reflect on the intent, the wording, the timing and some of the practicalities that these provisions throw up.

I want to add to the questions in a modest way. The “appropriate authority” that can levy the penalties includes those that will administer council tax benefits. We know that in future several hundred authorities will be levying council tax benefits unless we can get some amendments to the Bill. There is a real issue of consistency and the systems themselves possibly being markedly different and administered in a different way. Precisely how is it proposed that consistency in council tax benefit will be achieved? What sort of value to engagement will there be with all those authorities? Indeed, is there capacity within the DWP to undertake that effectively?

I have two more questions. The briefing suggested that the penalty levy would be £50. What was that figure benchmarked against? Can I also have clarification of “due process” and whether rights of appeal are attached to this? It would be helpful to hear from the Minister. Subject to that, and to the many pertinent questions asked by my noble friends, I shall not raise further points. We have not heard the Minister’s amendments yet, so subject to that, those are my questions.

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[Lord Freud]

“Negligence” and “reasonable steps” are legally bound words. There is a huge case law about what they imply. One needs not to be negligent when filling in an application and to take reasonable steps to correct mistakes. If you do not know that you have made a mistake, you cannot expect to be able to correct it. That would not be a reasonable step. However, there is a legal framework around these words. I go back to the point I was trying to make about the incentives on the system as opposed to on the individual. On the penalty rates that I gave noble Lords, we expect that the amount collected in a year, for example 2014-15, will be roughly £9 million and the cost of delivering that system of civil penalties the same figure, £9 million, so there is no incentive in the structure to have unnecessary civil penalties. That is not the point. The point is to—

[Lord McKenzie of Luton]

Will the noble Lord help me? Do the penalties accrue to the department or to the consolidated fund?

[Lord Freud]

That is as I would expect from the noble Lord. It is such a wicked question that I am baffled as to the answer. I think everyone is baffled. It is a magnificent question. It has bowled me out on my middle stump. I will have to find out the answer. I will not even hypothesise about where the different funds go. The right analogy for this is when you go to the dentist, having made an appointment, and you fail to attend. The dentist will charge you an amount in many cases in order to discourage that behaviour. When you are giving out a free good, it is very easy for the recipient to abuse it. You counterbalance that by making that somewhat expensive. When you go beyond a free good and you are giving out a positive good, that is even more the case.

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[Lord Freud]

My Lords, I buy the point about the delicacy of the run-in. I have a tool with which to monitor it very carefully. However, we must have a system that tells people that they must take care with their application. This is an application on which tens or hundreds of thousands of pounds are riding. It is no good people just putting in slapdash figures and not caring; this is really important information and it must be put down carefully. That is what we are trying to ensure with this relatively modest civil penalty.

[Lord McKenzie of Luton]

My Lords, I am very happy for the Minister to write to us on this rather than to spend more time today, because we need to make progress. This is about the practicalities. He has already indicated that the system could cost £9 million a year to operate. If a local authority seeks to collect both an overpayment and a penalty, the overpayment presumably reverts to the local authority. We do not know whether the penalty reverts to the Consolidated Fund or the DWP, but I presume that it is not to the local authority. The Minister will see that, in those circumstances, which may be quite common, one needs rules about how what is collected in respect of the two components is allocated between them. That presumably creates some administrative costs as well.

[Lord Freud]

I will need to write.

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[Baroness Sherlock]

My Lords, I would like to add just one point for the Minister to think about in his response. The noble Lord, Lord Ramsbotham, made a very powerful case. If the Minister does not like this way of doing things, could he help the Committee to understand how he can guarantee that his officials will undertake what seem to me to be the eminently reasonable strictures contained within the clause? If this is not the way, then what is?

Amendments moved by the noble Lord, Lord Kirkwood, and others in Committee have drawn the attention of the Committee to the fact that many of the people who will be receiving this benefit are living on the breadline. They are living on incomes which are so tight that what may seem to be relatively small sanctions can tip somebody into misery, as the classics will tell us. Could the Minister therefore consider how we in this Committee and in the House can have the confidence that nobody in that situation will be plunged potentially into despair by having a sanction applied without due consideration being taken of the impact on their physical and mental health, and indeed on the well-being of any children in their family, as described by the noble Lord, Lord Ramsbotham?

[Lord McKenzie of Luton]

My Lords, as has been said by my noble friend Lady Sherlock, the noble Lord, Lord Ramsbotham, has made a powerful case in principle. Like the noble and learned Lord, Lord Mackay, I am not quite sure that the formulation set down here is quite right, as it lumps together sanctions, penalties and recovery of overpayments, and there might be arguments for unpicking those. It would be helpful, in any event, if, following this debate, we could have in writing a note as to what information decision-makers would routinely have in front of them when they make the decision with regard to each of those various categories. That would help us as we move to Report.

We debated issues around the claimant commitment earlier, as has been said. My noble friend Lady Lister made the important point again about that being more about co-production rather than something that is delivered and given to the claimant. That is an important point. As my noble friend Lady Sherlock said, we are dealing with people whose resources are, almost by definition, incredibly stretched. In many cases they are on the edge. If we are going to further reduce the means that they have, then we ought to be very clear that we do that in the knowledge of all of the circumstances and the impact on their well-being.

[Lord Freud]

My Lords, I agree that it is right and proper that a decision-maker gives full consideration to all the relevant facts provided by a claimant when deciding whether to impose a sanction or penalty. It is also important that claimants have appeal rights when sanctions and penalties are imposed. I believe that the amendments are unnecessary because we have adequate protections in place, but I am very happy to meet the noble Lord on this matter. Let us go through it, because it is important that we get it right.

The essential difference between us—although, as the noble Lord, Lord McKenzie pointed out, we need to tease out three different things here—is that the noble Lord, Lord Ramsbotham, is looking for a specific process, whereas we are aiming, in the legal framework as it stands, at a general process of cover. The noble Lord will be aware that, if you have a whole load of specific things, you have a problem when you get the special case that is not covered, whereas if you have a general protection you are covered. I think there is a fruitful discussion to be had around that, and I would welcome a discussion to see that we have the right protections because, again, I do not think there is a huge difference between us here. We want to have the right protections for a vulnerable group. We do not want arbitrary behaviour; we want common sense. It is just a question of looking through. I will circulate the note on this matter to the noble Lord, Lord McKenzie, as well.

We are training decision-makers on a number of areas: retaining impartiality; identifying what constitutes evidence and where the burden of proof lies; on the concept of the balance of probabilities; and on an understanding of social security law. It is vital that we do this.

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[Lord Freud]

The answer to the first question is that interest is not ticking.

On the second question, I share the noble Baroness’s concern about how the present childcare system works on reporting, which is why we are producing an entirely new system with a monthly report and a monthly payment system. Basically, how the system will work is that you put in the receipt for what you have paid, and then that payment is repaid on a monthly basis. The problem presented by a change of circumstances will go. Roughly 15 per cent of problems are caused at the initial stage of the original application. It does not seem sensible to privilege one set of mistakes against another when it is a reasonably substantial proportion.

I am very happy to meet the noble Lord, Lord Ramsbotham, to go through these issues in some detail, because I share his and other noble Lords’ concern that we get this right.

[Lord McKenzie of Luton]

My Lords, if the noble Lord, Lord Ramsbotham, agrees, might we join in with those discussions or reflections?

[Lord Freud]

I would be utterly delighted to invite noble Lords, but not too many. Perhaps the noble Lord, Lord Ramsbotham, will give permission for the Official Opposition team to join him. If he does, I would be delighted to see you all.

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I hope the Minister will agree to take a fresh look at this issue, particularly as it will affect this Bill.

[Lord McKenzie of Luton]

My Lords, we have a good deal of sympathy for the amendment of the noble Lord, Lord Kirkwood, and the noble Baroness, Lady Thomas. My understanding is that draft regulations—or proposals for regulations—have to be submitted to the SSAC except in certain circumstances. One of them, which has been mentioned, is that regulations made within six months of the enactment of primary powers do not have to be submitted.

This amendment seeks to say that the six-month clock should start when the Bill becomes an Act, not when the particular provisions are drawn down. That could widen the scope of what the SSAC should review. I support that. It is sometimes uncomfortable as a Minister being on the receiving end of a report from the SSAC, but in a sense that is part of the process that we need to engage in. Clearly there would be issues of capacity if this change were to happen overnight, particularly given the Bill that we are now considering. It seems that Bills of this nature will inevitably be framework Bills. Our Bills were. There is always tension between working on the basis of draft SIs, trusting to luck or assurances as to what eventually comes through, and having a degree of certainty.

It is not our official position but it seems to me that one way round this would be for Parliament to be able to amend SIs. It would take us away from some of the debates that we have about trying to get stuff into primary legislation, but that is probably a debate for another day. We should take seriously the prospect of the SSAC looking at SIs more widely and not being pre-empted by the six-month rule. There is clearly an issue not only about the capacity of the SSAC but about its expertise. It is very important that that is maintained.

[Lord Freud]

My Lords, I am not alone, I know, in acknowledging the vast knowledge of my noble friend Lord Kirkwood in this area. He was, of course, chair of both the Social Security Advisory Committee and the Work and Pensions Committee in the House of Commons—I think I can say that now, if I am not pre-empting. His involvement in this important subject stretches much further than that. I welcome the probe and hope that I will be able to persuade him that the amendment is unnecessary.

The SSAC provides a valuable function and goes about its work very effectively. From my perspective and that of my ministerial colleagues, the relationship between the department and the committee is productive. We enjoy a similar relationship to the one that the noble Lord, Lord McKenzie, had. More specifically, the SSAC is currently working on a major study of passport of benefits in the light of the impact of these reforms. As my noble friend acknowledged, this is really the most significant ad hoc study by the committee that Ministers have commissioned for many years. It is a wish to look at situations in the widest possible way.

The committee’s current remit does not include the scrutiny of draft regulations made under powers recently enacted by Parliament. As my noble friend pointed out, this is for a period of six months, beginning from the commencement of the relevant enabling power. The amendment would therefore set the clock ticking from Royal Assent in all cases rather than from the commencement of the relevant enabling power. It follows that if an enabling power was commenced at a point more than six months after Royal Assent, regulations under that power would automatically be referred to the committee. I believe that that would be unnecessary. Informal arrangements are already in place in this area. As I explained when we debated Clause 1, we will continue to talk to the SSAC as we move to the implementation stage of this Bill and use the arrangements that are currently in place and that allow us to provide it with information on new powers and regulations made within six months of the commencement of those powers.

Noble Lords are aware that when the Government implement major welfare reforms, the relevant primary powers are sometimes commenced at different times, reflecting the staggered implementation process that can apply in such circumstances. Under the amendment, some of the regulations brought forward in this scenario—those brought forward within six months of Royal Assent—would not be subject to the committee’s scrutiny, but others brought forward subsequently would be, even though Parliament would have approved the primary powers applicable to the reform as a whole. That inconsistency would be undesirable and we do not believe that adding to the committee’s former role in this way would be warranted. Implementing the reforms in this Bill is an enormous undertaking.

A huge number of officials in the department are working on it, and others are working on changes to a very challenging timetable. It follows that the weight of draft regulations following the reforms would place an unreasonable burden on the SSAC if the Secretary of State were required to refer all regulations to the committee made six months after Royal Assent. That point was touched on by the noble Lord, Lord McKenzie, and I need to confirm that this is an overwhelming process, particularly right now.

I have emphasised that we already have effective informal processes in place in this area. I also believe that the application of the affirmative procedure to, for example, the first core set of universal credit regulations is another safeguard, making it less necessary to consult the SSAC on a formalised basis in respect of those regulations in particular.

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[Baroness Howe of Idlicote]

I am sorry. I will wait.

[Lord McKenzie of Luton]

I thank the noble Lord, Lord Kirkwood, for introducing this group of amendments and acknowledge his long-standing interest and expertise in issues of child maintenance. Like him, I pay tribute to the staff of the CSA and CMEC who, over many years, have stuck with the various iterations of child maintenance that they have had to deal with and sometimes struggle with.

My noble friend Lady Hollis gave us a brief history of child maintenance. It is right that one of the problems and the reason why the first of these amendments in particular—I support them all—is so important is that along the way the CSA has sought to be different things and to achieve different objectives. In 1991, it was substantially focused on the clawback of benefit, so no benefit accrued to children. The 2004 amendments recast that and focused the CSA on child poverty in particular, but, as my noble friend said, it was stymied to a certain extent by not being able to make progress on the disregards. I defend the 2008 changes—noble Lords would not expect me to do otherwise—for a number of reasons. It potentially gets round the problem of those who do not want to pay by the assessment being on the gross income of the non-resident parent, which is obtainable from HMRC. That has not yet been implemented, but it was a key issue in stopping non-resident parents messing up the system, which is what happened to the two previous systems. Voluntary it might have been, but there was an absolute right for either parent to make use of the statutory system with charges, which we are going to come to, that did not deter people on low incomes.

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[Lord De Mauley]

No, my Lords. I shall come to that, if I may, in a moment.

The purpose of the “gateway” clause is to give all parents the opportunity fully to understand their range of choices and the support that is available to overcome barriers to family-based arrangements. It is in no way intended to prevent them accessing the statutory service if that is the best option for them. We simply want that to be a considered choice. Parents can come back to the statutory service at any time if a family- based arrangement does not work out.

The “gateway” will take the form of a telephone conversation with an agent who will simply explain the available maintenance choices to the prospective applicant and signpost them to any associated help they might need. At the end of that conversation, if the parent feels that the statutory service is the best option, they will be transferred to the statutory service to begin the application process. We will develop an analogous approach for parents wishing to apply online.

We are also aware that a variety of support services for separating families already exists in the voluntary and community sector. However, we all know that there is a multitude of complex issues to be addressed during separation and it can be difficult, especially at a time of distress, for parents to find the information and support that they need. The gateway will also help signpost parents to such support so that if, following the conversation with an agent, they decide that they want to try to establish a family-based arrangement, we can help them find the support they need to do so.

[Lord McKenzie of Luton]

Will the Minister explain the difference between what he has just described and the current options service, other than the related charges that come through? The charges will need to be explained before somebody can make an application but, apart from that, in terms of the support and information that are given, how does the new arrangement differ?

[Lord De Mauley]

I shall come back to that if I may.

With the right support in place to help parents collaborate better, more children will be able to benefit from effective family-based maintenance arrangements. Outcomes for children across a range of measures are almost always best when parents work together. We want to make it easier for parents to access support by ensuring that it is available in a more co-ordinated way.

We want the people who know families best to shape these plans. That is why we asked a steering group of academics and voluntary sector experts to help us develop proposals for better coordinating support at a local and national level and as to how most appropriately to measure success. I am pleased to be able to say that we will look to act on this advice and to commit increased funding as detailed proposals emerge. This could include, for example, a web portal or a helpline that would provide an entry point to the wide range of services which are already available but parents may not be aware of. The helpline might, for example, offer a “triage” conversation to help parents identify their priority issues and obstacles and then advise on how and where to get support on them. The web portal would provide a framework to help co-ordinate the wide variety of online services already available, ranging from interactive advice and support from experts to forums where parents can talk to others in the same situation to share learning and information. The steering group will also consider how best to co-ordinate face-to-face local services to offer help and support. We will also look to test which interventions are most effective in helping parents overcome any obstacles to collaboration. This will be critical in helping us to decide where best to direct funding.

Amendment 113D would appear to create a period within which the prospect of an application being made to the statutory service against the non-resident parent would act as a stimulus to the NRP to engage in conversation with the commission. The conversation would encourage the NRP to consider taking action towards a family-based arrangement. This is a welcome intention, but one drawback is that it would impose a delay on processing the application where there was no prospect of a family-based arrangement, which in turn would delay the flow of maintenance. The Government’s view is that it is preferable to get parents talking at an earlier stage in the separation process to maximise the chances of them acting collaboratively and to provide them with access to services that will help them overcome any barriers to doing this.

The commission also has the objective of promoting financial responsibility. It should not be only the threat of an application to the statutory service that forces non-resident parents to be mindful of their obligations. The commission will continue to work to produce the cultural change outlined in the Green Paper so that the statutory service is the last resort rather than the default option. This will not happen overnight but this rebalancing of approach away from state intervention to parental collaboration must be the right approach.

Amendment 113F would exempt existing CSA clients from the need to take reasonable steps before applying to the new statutory scheme. It is just as important that these parents consider the possibility of reaching a family-based arrangement as parents entering the child maintenance system for the first time, particularly as they will be treated as if they are making a fresh application. Research tells us that 51 per cent of CSA parents with care feel that they would be likely or very likely to make a family-based arrangement were they to receive the right help and support. In addition, many CSA clients were compelled to apply to the CSA as a condition of applying for benefit.

Therefore, it is surely right to give CSA client parents who feel that they can make an arrangement and who may have been required to use the CSA the scope to consider whether a family-based arrangement could work for them. I challenge the view that the only way to have an effective arrangement is to have the state manage it. That approach has been shown not to work. Our proposals will provide more support for family-based arrangements and more options for reaching effective arrangements.

My noble friend Lord Kirkwood asked about the costs of transition, which will be effected over a three-year period. Estimates of cost will accompany consultation on the regulations covering case closure and charging, which will set out the spending profiles. The policy has not been finalised, so costs have not yet been firmed up.

In the context of Amendment 113D, my noble friend Lady Tyler referred to there being no charge on the NRP, to which I will turn when we deal with the next group. The noble Lord, Lord McKenzie, asked how the gateway is different from options. The conversation is basically the same. The difference is that we would expect applicants to have the options conversation before applying to the statutory service. At present, they go straight to the CSA. Earlier, I mentioned that we want to make the statutory service more effective. He also asked whether there is capacity to cope with case closure and how support will be structured. Yes, there are no concerns about capacity and support will be structured along similar lines as CM options.

The noble Lord, Lord McKenzie, also asked whether the same fee structure would be applied generally and, if not, what it will be. There will be one application charge only. He asked whether there would be an appeals process, if I understood him correctly. I think there is no need for an appeals service because the gateway is simply a phone call. He asked whether, if access is denied, an individual can apply again. Yes, they can. He asked how soon they can get on the statutory scheme. The answer is immediately. He asked whether both parents need to interact with the gateway. No, it requires just one telephone call, which generally is from the parent with care but both parents are free to seek advice.

With that rather lengthy response, I hope that I can persuade the noble Lord not to press his amendment.

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[Baroness Tyler of Enfield]

My Lords, I would like briefly to add a few comments to those that have been made so powerfully around this Committee. We have heard some moving quotes today, but the one I want to give is not from someone who has been part of this process as an end user but from Sir David Henshaw who, back in 2006, came up with the report that is often cited as being the genesis of the idea of charging. We have heard his name referred to on a number of occasions as his policy has been explained. Sir David Henshaw himself recognised the limits to charging when he said:

“I do not want to create a disincentive to use the service for those parents who have no other option for agreeing maintenance”.

We know, because DWP estimates tell us, that about half of all eligible families have no child maintenance arrangements at all. The danger is that even more children in poorer families will go without child maintenance as a result of the proposal to charge the parent with care. This is my final point, which I want to link to the one I made on the previous group of amendments. Not only will the children be worse off—we have heard some graphic and moving accounts of the real hardship that some children could be in—but more will grow up without a role model of a father who contributes, however modestly, to the cost of raising his own children.

[Lord McKenzie of Luton]

My Lords, like all noble Lords, I am indebted to the noble and learned Lord, Lord Mackay, for tabling the amendment. His being in tandem with the noble Lord, Lord Newton, is an irresistible combination. I do not envy the Minister having to reply.

There have been some powerful and moving contributions. I should start by putting clearly on the record where we are in relation to charging. It has been suggested that what the Government are bringing forward is just based on the previous Government’s proposals, but that is not so. It is absolutely correct to say that charging is permitted under the 2008 legislation, which is supported by the noble and learned Lord, Lord Mackay. But that is enabling legislation like so much of this Bill. It certainly did not envisage proposals such as those advanced by the coalition Government. It should be recognised of course that there were charging arrangements under the original 1991 legislation, but I believe that that was stopped in 1995 because the CSA was not delivering.

Our position on charging is clear. It is reflected in the White Paper entitled, A New System of Child Maintenance, dated December 2006. It cites in part what the noble Baroness, Lady Tyler, has just said and makes reference to Sir David Henshaw.  Paragraph 5.48 states:

“We recognise the importance of having a charging regime that does not dissuade vulnerable and low-income parents with care from seeking maintenance in the first place. Therefore, the future charging regime will be based on three clear principles. First, that the charging structure should incentivise non-resident parents to meet their responsibilities. Second, that the clear burden of charging should fall on the non-resident parent and not the parent with care. Third, that cost recovery for C-MEC should never be prioritised above payment of outstanding debt for the parent with care”.

Those provisions were not debated particularly extensively when we considered the Bill in 2008, although there was some discussion. At that time, we made it clear that it was for CMEC to advise and recommend to Ministers the detail of any charging regime but that such advice would be subject to CMEC’s overarching objective of maximising the number of children benefiting from effective maintenance arrangements, a point made by my noble friend Lady Sherlock a short while ago.

Although the clear focus on any charging should be on the non-resident parent, CMEC was not precluded from considering a small application fee to both non-resident parents and parents with care where voluntary arrangements might be more effective for them. We also made it clear that any charging structure should not commence until the service was fit for purpose and that this would not be before the launch of the new scheme then planned for 2010, which I think is now planned for 2012.

The Government have proposed a range of charges, including an upfront application fee of £100, which would be reduced for parents on benefits, and an ongoing collection charge on both non-resident parents and parents with care. The latter would be avoided for each if maintenance direct were used. However, whether maintenance direct is a secure and sustainable method of payment is wholly dependent on the non-resident parent. The Government’s proposals for charging fall foul of our criteria in a number of respects. An upfront fee of £100 is bound to act as a deterrent for lower-income households. It is payable not only in circumstances where a voluntary arrangement might be possible but in circumstances where it is not, for whatever reasons. That seems highly likely to increase the prospect of circumstances where no maintenance arrangements are entered into. Penalising parents with care with a collection charge, which depends on the NRP acting responsibly, is wholly unjust. The proposals allow for a reduction in the case of those on benefits but there is no exemption. Neither is any relief proposed for the collection charge.

That is why we are fully supportive of the amendment in the name of the noble and learned Lord. In short, it states that there will be no fees charged to parents with care where they have taken all reasonable steps to enter into a maintenance arrangement and it is not possible or appropriate to do so. There may be a multiplicity of reasons why it is not possible or appropriate to do so, some of which are particularised in later amendments. My noble friend Lady Sherlock has just spoken to one, as indeed has the noble Lord, Lord Kirkwood. In such circumstances, the only prospect of obtaining arrangements is the statutory system. There should be no charge which precludes this, which is what the noble and learned Lord’s amendment seeks to secure.

Amendment 113E, in the name of the noble Lord, Lord Kirkwood, seeks to introduce a reduction or waiver of fees where the income of a parent falls below prescribed levels. We have already indicated why we consider an exemption to be appropriate, although we acknowledge that the scope of Clause 6 is already wide enough to accomplish this.

Amendment 113EA has been spoken to powerfully by my noble friend and sets down circumstances where voluntary arrangements would clearly be inappropriate. The Government, I am sure, will be sympathetic to this given that they already acknowledge that individuals experiencing domestic violence will by-pass their new gateway.

Government Amendment 114 prompts me to raise questions relating to issues of enforcement. Can the Minister give an update on the various measures contained in the 2008 Act, including the use of deduction-from-earnings orders; regular deductions from accounts; lump-sum deduction orders; orders preventing avoidance; administrative liability orders; disqualification for holding or obtaining travel authorisation; curfew orders; and disqualification from driving? Can he say which of these are in force? If it is about getting sensible arrangements, it is also about making sure that those people who are responsible non-resident parents meet their commitments. We put in place a raft of enforcement measures which should have facilitated that and I would be grateful for an update on their progress.

[Lord De Mauley]

My Lords, I start by addressing my noble and learned friend’s Amendment 113DA. This would exempt from any charges parents with care who have taken all reasonable steps to make an arrangement outside the statutory scheme. In the debate on the previous group of amendments I said that we are seeking to promote collaboration between parents and to encourage them to consider their child maintenance options instead of taking the statutory service as the default. Research shows that more than half of parents with care in the Child Support Agency say that it is likely that they could make a collaborative arrangement with the right advice and support. We believe that it is generally in people’s best interests to focus on developing family support services for separated parents to enable them to consider their options and access help in overcoming barriers to collaborating where this is possible.

The introduction of charging is fundamental to our reforms to encourage parents to consider their options. Of course, not every parent will be able to make a family-based arrangement and so some parents will need to use the new statutory scheme. We believe that it is reasonable to ask them to make a contribution to the cost of the service they receive. We have spent some time considering the issue of value for money in the context of an application and it is worth pointing out that the average yearly Child Support Agency maintenance award is around £1,800 and an average case can be expected to last nine years. This equates to more than £16,000 of child maintenance. It is also worth pointing out that, unlike the situation until quite recently—the noble Baroness, Lady Hollis, mentioned this in the debate on the last group of amendments and I pay tribute to the previous Government for changing it—the receipt of maintenance does not now result in a reduction in benefits. I can confirm that this will remain the case with universal credit. Every penny of maintenance received is on top of whatever benefits the recipient has qualified for.

Noble Lords will, I hope, be able to see that, in the long-term, making some contribution towards the cost of the application in order to expedite this will be a good deal for parents given the significant on going financial benefit of child maintenance and the support offered if there should be any cessation of payment.

The noble Baroness, Lady Sherlock, asked whether the application charge will be used to discourage people from using the service. No. Our aim is that where relationships break down, both parents continue to take responsibility for the welfare of their children. This includes collaboration on issues of finance and, where appropriate, on going involvement of both parents in their children’s lives. We feel that it is fair for those parents who use the statutory service to reprioritise some of their spending towards the cost of their application and ongoing maintenance collection.

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[Lord De Mauley]

I agree that that is a good question. The Government will accept that making a phone call to the gateway is taking reasonable steps.

I said earlier that I agreed with the last Government that it is acceptable to charge for the statutory system. I am, however, very sympathetic to the concerns that have been raised today and I have listened very carefully to noble Lords’ views. What is critical is the amount that the applicant is charged to access the service. Concerns have been raised about the figure that has been mentioned. The noble Baroness, Lady Lister of Burtersett, in the last debate, and the noble Lord, Lord McKenzie, in this debate, mentioned a figure of £100. Both of them suggested that that figure is too high. I sympathise with this view, so I undertake to the Committee to have discussions with my ministerial colleagues and to make that point very vigorously. I thank noble Lords for their contributions today because they will strengthen my hand in those discussions. I also remind noble Lords that we will also consult in due course on our charging levels and debate the regulations in Parliament.

Amendment 113E explores the idea of relating the waiver or reduction of fees to the level of a parent’s income. In a simple way, this is already built into the proposed application charges, with a different, lower rate for those applicants on benefit. Rather than attempt to build further complexity into the IT system, I would prefer, as I have said, to take another look at the overall level of the application charge.

I understand that the matter of an ongoing collection charge is also a concern. The right reverend Prelate the Bishop of Blackburn referred to this. I will take this opportunity to point out to noble Lords that such a charge will be incurred only if maintenance is actually being received; by definition, therefore, people will have to pay for a service only if it is working. I have explained some of the improvements that we plan to make to the service. I am sure noble Lords will agree that it badly needs improvement.

Furthermore, collection charges can be avoided at any time if maintenance direct is selected. The noble Baroness, Lady Sherlock, asked whether victims of domestic violence will pay collection charges. I will come back to victims of domestic violence in a moment, but in the context of collection charges I must say that I do not think it is unreasonable to levy a charge for a service. What is important is the quality of the service and the level of the charge. I hope that I have gone some way to demonstrating that the service will be an improvement on what it has been.

Turning to victims of domestic violence, I reiterate that, as outlined in the Green Paper, Strengthening Families, Promoting Parental Responsibility: the Future of Child Maintenance, we are committed to exempting victims of domestic violence from the application charge. I reiterate that we will honour this commitment. Victims of domestic violence will not have to pay an application charge and they will be fast tracked through the gateway. We accept that applicants who have been victims of domestic violence cannot be expected to make family-based arrangements and so should be exempt from the application charge. However, we do not think it is unreasonable that they should make a contribution, as I have just said, to the cost of the statutory service once they are in it.

To assist them wherever possible to move into maintenance direct and so avoid collection charges and recognising that applicants in these circumstances will not want to have direct dealings with their ex-partner, we are developing a payment support service so that payment can be made outside the collection service without the parent with care having to divulge any personal details to the non-resident parent.

The noble Baroness, Lady Sherlock, asked about the definition of domestic violence. The commission has been working with the Home Office, which has the lead on domestic violence across government. In 2004, the Home Office replaced the 14 previous definitions of domestic violence used across government with a single cross-government definition. We will, of course, be using that definition.

We are still considering how the parent with care can prove that they have been a victim of domestic violence, but I can assure noble Lords that what is designed will not be onerous or burdensome.

Finally, I turn to Amendment 114. In the current child maintenance schemes, the Government have the ability to collect child maintenance by deducting it directly from the benefits of non-resident parents, which is an effective method. The purpose of this amendment is to enable us to continue to do this upon the introduction of universal credit. The amendment will allow, where necessary, for deductions in respect of child maintenance to be made from a non-resident parent’s universal credit award.

We envisage allowing most non-resident parents in the new statutory scheme the opportunity to pay their child maintenance directly to the parent with care—that is maintenance direct, which most noble Lords are familiar with. This should mean that in most cases use of the collection service and deductions from universal credit will be necessary only if the non-resident parent fails to pay by this method. In the current scheme, the ability to make such deductions is limited to where the non-resident parent is liable for the flat rate of maintenance, which could potentially rule out this option for a significant proportion of universal credit claimants who could be liable to pay more. The amendment will remove that restriction.

The amendment also makes clear the position in relation to charging. In the new child maintenance scheme, it is proposed that ongoing collection charges are payable by non-resident parents on top of the maintenance due where it is necessary for the maintenance to be collected using the collection service. The amendment ensures that any charges payable by non-resident parents can also be deducted directly from their benefit payments or universal credit, where this is appropriate. It also allows arrears to be deducted.

My noble friend Lord Newton asked about the appeals system. I should clarify that when I said there was no appeal with the gateway, it is because no one will be stopped from applying to the statutory service, so there is nothing to appeal against. The parent with care just needs to make a phone call and will be granted access to the statutory service.

The noble Lord, Lord McKenzie, asked for an update on the powers taken in the 2008 Act. The Government remain committed to pursuing arrears and will continue to use all their expanded powers to this end while the Child Support Agency schemes remain open. We frequently use deductions from earnings orders, lump sum deductions and deductions from accounts. Parents who fail to pay now face tougher sanctions, including having money deducted directly from their bank account or having their home seized. Primary powers enable the Government administratively—without application to a court—to disqualify a non-resident parent from holding a driving licence or passport where we are of the opinion that the non-resident parent has wilfully refused or culpably neglected to pay child maintenance. These powers are not yet in force. Prior to any final decision being made to commence them, there would need to be public consultation on the detail of how they would work. If the noble Lord so wishes, I can write to him detailing exactly what powers we currently use and what we still plan to bring forward.

[Lord McKenzie of Luton]

That would be helpful, but could the Minister also indicate the extent to which those powers are going to be transferred to the Secretary of State?

[Lord De Mauley]

I shall include that in the letter I will send out. In the light of what I have said, I hope that I can persuade my noble and learned friend not to press his amendment.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, I will be brief in saying that we support the thrust of each of these amendments.

[Lord De Mauley]

My Lords, turning first to my noble friend’s Amendment 113G, the Government are determined to ensure that non-resident parents meet their child maintenance responsibilities. That is why we have already committed to bring cases into the collection service as soon as we have evidence that payment has not been made through maintenance direct. Where a parent with care informs us that payment has not been received and the non-resident parent is unable to provide evidence to the contrary, such as a bank statement showing credits to the parent with care’s account, we will swiftly move the case in to the collection service and act quickly to ensure payment is reinstated.

This could include the use of enforcement tools where necessary, such as deduction from earnings orders, where maintenance is deducted directly from an employed non-resident parent’s earnings, and deduction orders, which enable deductions to be made directly from a non-resident parent’s bank account. Where the parent with care alleges that further payments have been missed during the maintenance direct period and there is no evidence to the contrary, we will ensure that these arrears are also paid when we bring the case into the collection service. It is unacceptable for non-resident parents to neglect their child maintenance responsibilities and build up arrears, which the Government are determined to tackle. To that end we will take a more robust approach to collection and enforcement in the new scheme and will use all avenues available to us to ensure outstanding arrears are paid and new arrears are not allowed to accrue.

We will not give up on cases. Following the introduction of the new scheme, the commission will continue to pursue non-resident parents for any arrears of maintenance that they may owe, which will include arrears from the schemes currently in operation. Where arrears have been accrued prior to the introduction of charging, no charges will be payable by either party in relation to these amounts.

On victims of domestic violence, as raised under Amendment 113H, let me put it on the record that we are committed to ensuring that victims are protected. They will be fast tracked into the statutory scheme; they will not be expected to make a family-based arrangement; and will not be required pay an application charge. Clause 132 provides non-resident parents with the ability to choose to pay their child support maintenance by maintenance direct within the statutory scheme. When designing this provision we considered carefully how to protect victims of domestic violence. Therefore, we will provide a service to enable direct payments between the parties without the need for any direct contact to be made or any personal information to be disclosed. This will be known as the payment support service. We will also provide appropriate support to help clients to use this service effectively where necessary.

We believe that the provision of this service and the support we will provide to clients in using it will ensure that victims of domestic violence are able to use maintenance direct safely, without any risk of harm to the parent with care or the child. As I have explained, as soon as we have evidence that payment has not been received we will bring the case into the collection service and take appropriate action to re-establish payment. With that explanation, I hope that my noble friend will agree not to press his amendment.