5.The current system dates from 1993, established by the Child Support Act 1991 (the 1991 Act). In the preceding decade, while the number of children living in lone-parent families increased substantially, the proportion of children receiving maintenance fell – in 1989, 23% of lone parents claiming Income Support* were receiving maintenance, compared to around 50% in 1979. The new child support system was intended to reverse this decline, by providing consistent rules for assessing maintenance liability, and a readily accessible means for collecting and enforcing payment that was due.
6.The 1991 Act set out the structure of a maintenance formula for calculating child support liability. This formula, which took into account the income, housing costs and family responsibilities of both parents, replaced the largely discretionary decisions on maintenance taken by the courts. A system was built up around this formula, administered by the new Child Support Agency (CSA) to ensure the correct calculation of the liability, the collection of maintenance, and enforcement if payment was not forthcoming.
7.Further regulations and the Child Support Act 1995 (the 1995 Act) built upon the 1991 Act. In particular, the 1995 Act introduced the Child Maintenance Bonus, intended as an incentive to encourage parents with care into work, and also introduced the departures scheme which allowed for the assessment of child support liability to take account of exceptional circumstances not recognised in the formula-based assessment.
8.The Government’s plans for reform of the current system are set out in the White Paper A new contract for welfare: CHILDREN’S RIGHTS AND PARENTS’ RESPONSIBILITIES (Cm 4349) published on 1st July 1999. Proposals were first published in July 1998 in the consultation document CHILDREN FIRST: a new approach to child support (Cm 3992). Over 1500 written responses were received which have informed the current plans.
9.The White Paper identified a number of problems with the current system.
While the CSA has almost 1.5 million children on its books, only around 300,000 gain financially from child support payments. Of these 300,000, only around 100,000 see the benefit of all the maintenance that is due.
The complexity of the current formula leads to long delays in assessing liability. This in turn makes it difficult to ensure that child support is paid regularly. Because the assessment process is complex, the CSA has less time to help parents understand what they should pay or to chase up non-payment.
Families living on Income Support do not gain from the payment of maintenance as their benefit is reduced by an amount equal to the maintenance paid.
10.The key changes proposed in the White Paper to address these issues were:
simplification of the way in which child support liability is assessed by replacing the current complex assessment formula with a simple percentage of the non-resident parent’s net income;
the introduction of a child maintenance premium in Income Support and income-based Jobseeker’s Allowance* that will enable families receiving these benefits to keep up to £10 a week of the maintenance paid for their children. Under current rules, maintenance reduces these benefits pound for pound;
strengthening the sanctions regime by building on existing powers contained in the current scheme, and introducing new measures, to improve compliance;
reform of the CSA’s service to its customers by increasing use of the telephone and face-to-face contact, directing a greater proportion of its resources to making sure maintenance is paid on time and sorting out disputes about liability or payment arrangements as soon as possible and, wherever possible, without the need to refer the dispute to an appeal tribunal.
11.Not all of the proposed reforms require primary legislation. For example, the child maintenance premium can be introduced through amendments to the relevant secondary legislation. And, to implement the reforms, substantial changes to the way that the CSA operates will be necessary, including the introduction of new computer systems.
12.The provisions in the Act, which replace the existing formula with a simpler system of rates and clarify the responsibilities of parents, cover in particular:
the processes for applying for child support and the way in which child support liability will be decided;
the rates used for calculating maintenance liability, based on 15% of the non-resident parent’s income for one child, 20% for two and 25% for three or more;
what is to count as income;
clear penalties for parents who deliberately misrepresent their circumstances to the CSA - and for those who refuse to provide the information needed to calculate liability and collect maintenance;
the variation of the normal rate of maintenance liability to recognise certain exceptional costs and sources of income;
rights to dispute and appeal decisions on child support liability and the processes by which liability will be kept up to date;
financial and other penalties for late and non-payment;
improvements to the provisions for establishing paternity;
transitional provisions and phasing processes to allow movement from the existing scheme to the new scheme; and
other matters such as:
the relationship between court orders for child maintenance and the child support system;
liability for certain non-resident parents living abroad;
the introduction of fees for child support services when these reach an acceptable standard; and
benefit penalties when a parent with care on Income Support opts out of child support arrangements without good cause.