Child Support (Miscellaneous Amendments) Regulations 2019

Lord McKenzie of Luton Excerpts

Tuesday 2nd July 2019 Lords Chamber

[Baroness Janke (LD)]

My Lords, clearly, we are in favour of all measures to ensure that children are getting the financial support they need. A large part of this is making sure that both parents contribute to the raising of a child, through official child support or otherwise. According to the charity Gingerbread, child maintenance alone lifts a fifth of low-income single parents out of poverty. Where parents are unequal in income, as is often the case after a separation, it is right that suitable payments for child maintenance are made. It is good to hear of the proposed changes to the Child Maintenance Service scheme, which has been a long, infamous project, causing disastrous circumstances for children and families and costing a great deal in time and resources for all involved, including the Government.

Although we are generally wary over giving powers of enforcement, we are in favour of the proposed changes to inspection. Requesting information from mortgage lenders will cut down on the number and intrusiveness of current inspections. It is important that both parents support their children; the cost of bringing up a child is considerable and generally falls on the mother, who is more likely to be in low-paid, insecure employment. Some 90% of single parents are women, and they are twice as likely to be in poverty as any other group.

However, in recognising and enforcing payments for child support, the Government need to recognise and act on the issues that drive child poverty. For example, the two-child limit, which restricts support to a family’s first two children, is one of the key factors of child poverty, as demonstrated by many recent reports. The benefit cap also hurts families and households with multiple children, or those who live in expensive areas.

I draw the Minister’s attention to the report published last week, All Kids Count: The Impact of the Two-Child Limit After Two Years, produced jointly by the Church of England and the Child Poverty Action Group. This presents detailed and disturbing evidence of this policy’s impact after two years. It is based on interviews with more than 430 families. I urge the Minister and all Members of your Lordships’ House to give the report careful consideration, and the Government to take action on its findings.

I would welcome a new approach by the Government towards child poverty, which is widely acknowledged to be growing. Having said that, I broadly support this statutory instrument.

[Lord McKenzie of Luton (Lab)]

My Lords, I have just two quick questions. First, where the recipient who is due to make payment is subject to a benefit sanction, what impact does that have on the amounts that are collectable, as proposed in this order? Secondly, the £8.40 can be an amalgam of the collection fee and the maintenance payment. So far as the government accounts are concerned, how is that split and dealt with?

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for her explanation of these regulations, and all noble Lords who have spoken, particularly my noble friend Lord McKenzie; he always comes up with questions I would never have thought to ask, and they are always excellent. I hope the Minister had thought further ahead than I did—although I see someone running to the Box so perhaps she had not.

I very much agree with the points made about child poverty and the role that child support plays in helping to provide a platform on which single parents can build an income which helps lift their children out of poverty. So we do not oppose these regulations. It is important, wherever possible, that both parents should contribute towards the cost of raising a child after a break-up. An adult may leave their partner but they do not get to leave responsibility for their children.

I accept that the regulations are designed to provide a series of changes and clarifications to make it easier to collect arrears and maintenance payments under the Child Maintenance Service scheme. I will concentrate on a few specific points: the proposal to allow deductions for child maintenance to be made from universal credit where a non-resident parent has earnings and meets the criteria to be eligible for the flat rate; the increase in the amount, plus collection charges, that can go towards paying arrears; extending the scope; and the enforcement points.

The proposal to allow deductions of £8.40 from benefits for arrears in cases where the non-resident parent is no longer paying ongoing maintenance seems sensible. I can understand that for someone on a low income, £8.40 is a lot of money, but it is entirely possible that the single parent on a low income could also be on benefits, and both parents may well have suffered from the cut in living standards brought about by the benefits freeze and the other cuts in benefits. That seems to be an element of fairness that has to be addressed.

It is also very important that non-resident parents are clear that they will be chased for any arrears they owe. I ask the Minister for a broader update on this. She mentioned that we debated some child maintenance regulations last November. At that point the key thing the Government did was to write off billions of pounds of arrears from the old CSA system, and the quid pro quo for that, because we pushed them at the time, was that they would promise to pursue enforcement. This really matters because otherwise there is a moral hazard question. If a message goes out to parents: “If you just hold off long enough and don’t pay, in the end the Government will give in and write it off”, clearly that creates a disincentive to pay the money that should be paid for your children. So it is really important that we do not get back into that question. Ministers made the case in those regulations for a clean break with the old system, but that places a huge onus on them to make sure that arrears do not build up again in the new system.

I looked at the latest statistics and I am a bit worried. Since the new Child Maintenance Service began, a total of £259.2 million of child maintenance is unpaid, which should now be paid through the collect and pay service. That is 11% of all child maintenance due to have been paid since the service began. In the last quarter of last year, only 66% of paying parents using that collect and pay system were compliant; and compliant does not mean that they pay all of it but that they are paying some of it. So only two-thirds who were using the actual statutory system of compliance were paying anything at all. I may have misread those figures, but can the Minister confirm whether that is right? If the figures are right, is she happy with them? If she is not happy with them, how much difference does she expect these regulations to make to that performance?