• Abstract and Figures
• Public Full-text

BRIEFING PAPER Number 7776, 27 January 2021 Child maintenance: The By David Foster, Philip write-off of arrears on Child Loft Support Agency cases (UK) Contents: 1. Introduction 2. Policy development 3. Procedure: parent with care 4. Procedure: Government 5. How is the write-off progressing? 6. Northern Ireland www.parliament.uk/commons-library | intranet.parliament.uk/commons-library | [email protected] | @commonslibrary 2 Child maintenance: The write-off of arrears on Child Support Agency cases (UK) Contents Summary 3 1. Introduction 4 1.1 The child support schemes 4 1.2 The 2018 write-off programme 4 2. Policy development 5 2.1 2012-2017 Strategy 5 2.2 2018 strategy 6 2.3 2018 regulations 7 3. Procedure: parent with care 8 3.1 Which cases are involved? 8 3.2 Informing the parent with care of a decision to write-off arrears 9 3.3 Representations by parents with care & non-resident parent 9 What is the timescale for responding? 10 3.4 What happens if the parent with care asks the CSA/CMS to collect a debt? 11 3.5 How does the CSA/CMS evaluate “collectability?” 11 3.6 Can part-payments be accepted? 12 3.7 What if a case involved arrears owed to both the Government and a parent with care? 13 3.8 Complaints 13 3.9 DWP flowchart of the write-off process 14 4. Procedure: Government 15 4.1 Why are there arrears owed to the DWP? 15 4.2 How are the arrears being written off? 15 5. How is the write-off progressing? 16 5.1 Parent with care representation 16 5.2 Non-resident parent representation 17 5.3 CSA debt written off 17 5.4 National Audit Office commentary 18 Complaints 19 6. Northern Ireland 20 6.1 Arrears 20 6.2 Policy background 20 6.3 Process 21 Cover page image copyright: Pixabay website; photographer Pezibear – Free for commercial use, no attribution required 3 Commons Library Briefing, 27 January 2021 Summary This briefing describes the UK Government’s policy to write-off arrears The separate arising from the 1993 and 2003 child maintenance schemes. These scheme in Northern schemes are closed to new applicants and ongoing maintenance cases Ireland is described have been transferred to the 2012 scheme. in section 6. Post-2018 Write-off policy Following a consultation, in 2018 the UK Government announced a new policy to bring the estimated £3.7 billion of child maintenance arrears accumulated under the 1993 and 2003 schemes within scope of a write-off programme. Of the estimated £3.7 billion, the Government calculated £2.5 billion was owed to parents with care (c. 970,000 cases) and £1.2 billion was owed to the Government (c. 320,000 cases). In deciding to take this approach, the Government said arrears had accumulated due to the “significant policy, operational and IT issues” of the 1993 and 2003 schemes. The consultation document also highlighted the costs associated with collecting the arrears and maintaining them on Child Support Agency (CSA) IT systems,, and the relatively low level of collection expected (around £0.1 to £0.6 billion). The resulting Strategy said that the Government would-write off in full the £1.2 billion owed to the Government. Between 18 December 2018 and 30 September 2020, around 579,500 cases with non-paying historical debt have had the debt adjusted or written off. System records showed these had a total debt value of £1,935.5 million, of which £853 million was owed to government only (DWP, CSA: September 2020, January 2021). Writing off arrears owed to Parents with care In December 2018, the CSA/CMS began writing to eligible parents with care to ask them if they wanted a last attempt to be made to try and collect the debt owed to them. The DWP said that by September 2020 all eligible persons on the CSA computer system had completed the care with representation process and 89% of contacted parents with care either did not respond to the letter or told the CSA that they did not want them to collect the debt. By the end of September 2020, 112,100 parents with a case on the CMS system have also been contacted (DWP, CSA: September 2020, January 2021). Where the parent with care requests the CSA/CMS collects the debt, the service conducts checks to establish whether there is a realistic chance of its collection. If there is, the service contacts the non-resident parent. By March 2020, all 13,700 cases on CSA systems had completed the non-resident parent representation process and 98% of these cases were transferred to the CMS to collect the debt. These figures do not include cases which were already on the CMS system before December 2018. At September 2020, 17,800 CSA cases already held on CMS systems had started the non-resident parent representation process and 82% of these cases have been transferred for on-going attempts to collect the debt (DWP, CSA: September 2020, January 2021). 4 Child maintenance: The write-off of arrears on Child Support Agency cases (UK) 1. Introduction 1.1 The child support schemes There are currently three statutory child support schemes operating in Great Britain under the Child Support Act 1991: • 2012 scheme (also known as CS3) is the current scheme and open to new applicants. It is administered by the Child Maintenance Service (CMS); • 1993 and 2003 schemes – these are closed to new applicants. All cases with ongoing maintenance liabilities have been transferred to the 2012 scheme. Only “arrears-only” cases continue to operate on the legacy scheme although, as this briefing explains in more detail, the Department for Work and Pensions (DWP) is implementing a large-scale write-off of arrears that accrued under these schemes. These legacy schemes are administered by the Child Support Agency (CSA). Box 1: Child maintenance terminology Below is a list of common terminology on child maintenance employed under the Child Support Act 1991 (the 1991 Act) and in CMS literature: • Non-resident parent (“Paying parent”): a parent of the child who does not live with the child. • Parent with care (“Receiving parent”): the person with whom the child has their home and who usually provides day-to-day care of the child. The parent with care does not have to be a parent of the child or have parental responsibility for them • Qualifying child: the child for whom child maintenance is payable. • Relevant child (or “relevant other child”): a child other than a Qualifying Child for whom Child Benefit is payable to the non-resident parent (or their partner). • Child in Scotland/Child Applicant: in Scotland, a child aged 12-19 may apply for maintenance if they are in full-time, non-advanced education or approved training; • Duty to Maintain: Section 1 of the 1991 Act states that “each parent of the Qualifying Child is responsible for maintaining [them]” and “where a maintenance assessment made under this Act requires the making of periodical payments, it shall be the duty of the absent parent with respect to whom the assessment was made to make those payments”. • Gross weekly income: the non-resident parent’s income calculated as a weekly amount before any deductions for tax but after any contributions to approved personal or occupational pension schemes have been made. • Direct Pay: where the CMS calculates the rate of maintenance, and payments are made directly between parents. • “Collect and Pay”: where the CMS calculates, collects and passes on payments between parents. • Child Maintenance Group (CMG): the post-2012 successor to the Child Maintenance and Enforcement Commission. 1.2 The 2018 write-off programme Following a consultation, in 2018 the UK Government published a new Compliance and Arrears strategy, which set out plans to write-off arrears arising from the 1993 and 2003 child maintenance schemes, organised through the CSA. Child maintenance cases with ongoing maintenance claims previously collected by the CSA have been transferred to the CMS. This briefing provides information on this policy, including its development and implementation to date. 5 Commons Library Briefing, 27 January 2021 2. Policy development 2.1 2012-2017 Strategy In 2013, the DWP document, Preparing the future, tackling the past, set out the child maintenance arrears and compliance strategy for 2012- 2017. The Strategy included an estimate that around £3.8 billion was owed in arrears on CSA cases by 2012.1 The Department said its “aim [was] to collect as much as we can”. It added, however, that that older debt was “harder and more expensive” to collect and the collection of money owed to children with ongoing maintenance arrangements would be its priority.2 The 2012 Strategy was criticised by several organisations, including the single-parents charity Gingerbread and the National Audit Office (NAO), who both said the Government had not allocated sufficient resources to recover arrears accumulated under the 1993 and 2003 schemes.3 Limited powers to write-off arrears Before 2012, the DWP has no power to write-off child maintenance arrears; the only option was to “suspend” their collection indefinitely. Legislative changes that came into force in October 2012, through amendments of the Child Support Act 1991 , introduced the power to write-off debts but only in certain prescribed circumstances.4 As the DWP explained, these were that: • the receiving parent (or child in Scotland, who can apply for maintenance in their own right) has requested that they no longer wish the arrears to be collected. • the receiving parent (or child in Scotland) has died. • the paying parent died before 25 January 2010, or there is no further action that can be taken to recover arrears from their estate.

Load more

  23

Copy Link