245.Liability to pay child support usually begins on the day that the non-resident parent is told about the application for a maintenance calculation. However, there will usually be some delay between this date and the date that a maintenance calculation is completed. This means that arrears of maintenance build before parents know how much they should be paying. Voluntary payments made during this period can reduce the debt and provide financial support for the children while child maintenance is being worked out.
246.However, at present voluntary payments are not defined and have no statutory status. The CSA follows policy guidelines in determining which payments can be set off against arrears of maintenance. The Government considers that the use of the discretion is not providing sufficient reassurance to parents that all cases are being treated in the same way. This in turn provides a disincentive to make payments for the children before the maintenance calculation is completed. The Government therefore proposes to give statutory recognition to voluntary payments.
247.This section gives statutory recognition to voluntary payments by inserting a new section in the 1991 Act which establishes clearly the range of payments to be covered and allowing such payments to be offset against child support arrears and current maintenance. Subsections (2) and (3) of this section amend the provision for repayments of overpaid child support to cover the voluntary payments that exceed any child maintenance due.
248.Subsection (1) inserts a new section 28J in the 1991 Act.
249.New section 28J(1) provides that this section applies where: a person has made an application for a maintenance calculation, or is treated as having made an application, under section 6 of the 1991 Act; the application has not yet been determined; and the non-resident parent actually makes a voluntary payment.
250.Section 6 of the 1991 Act is substituted by section 3 of this Act. It provides that a parent with care who claims or receives Income Support or income-based Jobseeker’s Allowance can be treated as having applied for a maintenance calculation.
251.New section 28J(2) defines the term “voluntary payment” as:
subsection (2)(a): a payment on account of child maintenance which the non-resident parent expects to pay. The payment may be based on an estimate provided to him by the Secretary of State or based on an amount he has worked out for himself as being due; and
subsection (2)(b): a payment which is made before the actual calculation has been notified, or the application for maintenance determined.
252.New section 28J(3) provides for regulations that will set out circumstances in which voluntary payments can be taken into account.
Subsection (3)(a) provides for voluntary payments to be offset against the arrears which have built up before the non-resident parent was notified of the calculation.
Subsection (3)(b) provides for the balance to be offset against future liability, to the extent that the voluntary payments exceed any outstanding debt.
253.New section 28J(4) provides for conditions to be set regarding payments and to whom they can be paid. It allows for voluntary payments to be made via the CSA, direct to the parent with care, or another specified party.
254.New section 28J(5) provides a general power for regulations about voluntary payments and, in particular, about the type of payment that can be accepted.
Subsection (5)(a) provides for regulations to specify which payments are, and which are not, to be treated as a voluntary payment. This will relate to all payments whether they are paid to the parent with care or any other party. It is intended that as well as cash payments, any payment that is made for food, shelter and warmth will normally be taken into account. However, payments in kind, that is, where the non-resident parent spends money on other items for the child, will not be taken into account.
Subsection (5)(b) provides for regulations to specify the extent and the circumstances in which these payments can be taken into account once it is accepted that the payment is of the right type to be counted as a voluntary payment.
255.Subsections (2) to (4) of section 20 amend section 41B of the 1991 Act which provides for the lump-sum repayment to the non-resident parent of maintenance that he has overpaid. This provision takes effect when the overpayment cannot be repaid in a reasonable time by offsetting it against future child support liability. The intention of this amendment is to treat overpayments of voluntary payments in the same way as overpayments of child support maintenance.
256.Subsection (3) provides for a new subsection to be inserted after subsection (1) of section 41B, which allows the provisions of section 41B to apply where a voluntary payment has been made, and:
it subsequently turns out that there is no maintenance liability due at all; or
the non-resident parent has paid more, in voluntary payments, than the total of arrears.
257.Subsection (4) substitutes subsection (7) of section 41B. The substituted subsection (7) will provide that a payment is to be treated as being an overpayment of child support maintenance made by a non-resident parent where:
a payment was made but the maintenance calculation turns out not to be valid (for example where a person who believes himself to be the non-resident parent turns out not to be the non-resident parent or where the CSA do not have jurisdiction over a case); and
a voluntary payment has been made but there is no liability to pay child maintenance.
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