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Child Maintenance and Other Payments Bill

I thank all noble Lords who have made some very interesting contributions to this short debate. The noble Lord, Lord Kirkwood, explained that the purpose of these amendments is to link the repeal of Sections 6 and 46 of the Child Support Act 1991 with a full disregard for maintenance payments in the main income-related benefits. In the Child Maintenance White Paper we said that we would extend the existing £10 per week disregard to cases on the old child support scheme, and we also made the commitment that from 2010-11, parents with care on benefit would be able to keep significantly more of the maintenance paid before their benefit was affected. Subsequently, as has been acknowledged—I thank both noble Lords for their support and congratulations on this—we have announced that the disregard will be increased to £20 a week by the end of 2008, together with a full disregard in housing benefit and council tax benefit from this point. The disregard will then double to £40 a week from April 2010. These changes will benefit some 350,000 children and will lift around 50,000 children out of poverty. The noble Lords, Lord Kirkwood and Lord Skelmersdale, both expressed the view in Grand Committee that the disregards will set an artificial cap on the level of maintenance, but as I pointed out, almost 90 per cent of the current caseload on benefit has a liability of less than £40, although I acknowledge what might happen in respect of the other 10 per cent. But removing compulsion by repealing Sections 6 and 46 is the first step in moving towards a new system of child maintenance that will go a long way towards delivering our aim to encourage parents to make their own arrangements for maintenance while maintaining a statutory maintenance service for those who cannot or do not wish to do that. Moreover, it will give parents with care on benefit the same options as those who are not, and we should not make the timing of this conditional upon having a full disregard. However, the noble Lord, Lord Kirkwood, acknowledged the Government’s focus on child poverty, as I acknowledged the important contribution that child maintenance can make towards achieving our objectives. On costs, the figures show that if we moved to a full disregard in 2008, the additional cost from the current proposed position would be around £55 million in 2008-09, £110 million in 2009-10 and £45 million a year thereafter. As the noble Lord, Lord Skelmersdale, said, that is a not insignificant cost. My noble friend Lady Hollis and the noble Lord, Lord Kirkwood, both spoke of disincentives to work and asked where we are on it. The initial research undertaken was pretty inconclusive, but I do not think that it looked at the effect of higher disregards in benefit without taking account of the impact of full disregards on housing benefit and council tax benefit, which can operate in the opposite direction because they are in-work benefits. But I can say that we are expecting to publish further research in this area quite shortly. My noble friend asked how it would work for Jobcentre Plus, and a point stressed by the noble Lord, Lord Kirkwood, was whether it would impose an administrative burden. Incidentally, my noble friend made a point about circumstances where both the non-resident parent and the parent with care were on benefit and the fact that the system does not deliver payments across that. With respect, I am not sure that that is absolutely right. There have certainly been challenges in delivery, I am aware of that, and when I looked at this a while ago, there was a backlog, but it was a backlog that was moving, so payments were being made across. However, it is an important issue. On the engagement of Jobcentre Plus in the process, declaring income is a standard part of a benefit claimant’s responsibility and child maintenance will be no different regardless of the amount received. The obligation will be to report the full child maintenance amount and not only the excess in respect of the disregard. Jobcentre Plus already has processes in place to deal with cases where a source of income is erratic—for example, where a client receives part-time earnings—and the same processes will apply to maintenance payments. We recognise that there will be an increase in reported changes of circumstances but this is offset by a reduction in the work as Jobcentre Plus will no longer be required to gather information for the CSA or carry out good cause interviews, decision making and the imposition and maintenance of produced benefit decisions. We believe the changes will be cost neutral overall and Jobcentre Plus is confident that it will have the capacity to manage the increase in reported changes of circumstances.