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A number of points were raised about cost. The noble Lord, Lord Skelmersdale, asked what it would cost. There was an old figure of £230 million, but that has subsequently been adjusted and updated to £180 million. That is a tentative figure, but it gives the scale of the possible cost involved. The noble Lord, Lord Kirkwood, said that it is important to use all the levers that we can in tackling child poverty. That is right, and a lot of levers are being used, particularly with the focus on work, getting lone parents into work and supporting them in that, and the use of the tax credits system. Child maintenance has an important role to play, and the disregards that we are proposing to enter into the system will make a significant contribution. We should not hold up the introduction of these important changes until a full disregard may be available.
Lord Skelmersdale: Does the Minister accept the argument made by Gingerbread and others that the amount of disregard will limit the amount of maintenance money flowing from the non-resident parent to the parent with care? That is the crux of the matter.
Lord McKenzie of Luton: I think we should recognise that it may in some cases be seen as a limiting factor. It is a much higher ceiling than we have at the moment with the £10 disregard, so it is a substantial move. There is some risk that that will be seen as a target figure in some cases, but not necessarily in all cases.
Lord Skelmersdale: Is the Minister satisfied with that? Putting a limit, even in some cases, on the flow of maintenance is far from desirable.
Lord McKenzie of Luton: I shall share some current data with noble Lords: 87 per cent of the current case load—the total case load, just not the current scheme case load—has a maintenance liability of less than £40 a week. At the moment, without that £40 limit, the arrangements are overwhelmingly below £40. Seventy-five per cent of the case load has a maintenance liability of less than £20.
Lord Kirkwood of Kirkhope: The noble Lord, Lord Skelmersdale, asked the Minister the apposite question about the cost. It is true that the cost came down: it was over £200 million and fell to £180 million. I am not sure whether that is gross or net. It is important to know what the best modelling advice is because the figure for the totality of the cost and the savings is much more sellable to the Treasury than we would imagine. I would like to ensure that we can get the best handle on what figure is at stake, and that would be in the department’s interest as well. It is undoubtedly a big sum, but there would be a lot of benefit if it could be found.
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I am tempted to say that I shall withdraw the amendment only if the Minister promises to read Professor Alan Marsh’s paper The Disregard of Child Maintenance Payments. It is only 11 pages and will fit snugly in his ministerial box. I shall try to persuade him later. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 79 and 80 not moved.]
Lord Addington moved Amendment No. 82:
(1) The Secretary of State shall, within twelve months of the coming into force of this Act, publish a report—
The noble Lord said: The three amendments in this group tabled by my noble friend and me try to tackle the thorny issue of shared care and attempt to take a realistic view of it. Amendment No. 82 calls for a review of the shared care rules within 12 months of the Act coming into force. Amendment No. 89 is more of a probing amendment than many amendments and is about the process of the shared care decisions. Amendment No. 90 is effectively an attempt to define realistic shared care.
I know that there is a great danger that when a Minister sees a call for a review his eyes start to glaze over, but the aim of Amendment No. 82 is to try to value the shared care; that is, the support of the parent who does not have day-to-day care. What is that parent’s role and what should be given to encourage him or her to take a greater role in support? The unfortunate background to this is that people may use shared care simply as a way of making fewer payments; it is, generally speaking, fathers saying that because he takes the child for x amount of time, x number of days or x number of afternoons there should be a reduction. This is not a call for that. It is a call for a review about what should be required to encourage and support people in the sharing process. We have heard so many arguments stating that two parents are better than one. If those parents decide that they cannot or will not live together in the same household unit, having the two parents making input separately is surely better than having only one doing so. All the arguments in another part of the department about respite care surely reinforce that. There needs to be a real review about government intervention—for instance, providing support to enable the person who is not the main carer to have interaction.
Amendment No. 89 again is a probing amendment to seek clarification and answers to some unanswered questions. Will the interim shared-care provision apply to all parents who approach CMEC or just those who
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Amendment No. 90 probably is the most substantial amendment. The amendment would allow for a deduction in child maintenance and liability in respect of shared care only if the child in question stays overnight with a non-resident parent for at least three nights a week on average or at least 156 days in a 12-month period. Effectively, in a seven-day week, three nights a week probably is about as close as you can get for shared care. It is half the time and is a long-term commitment. How can we bring that in? When you take on the fact that this is split as close to down the middle as you can get in a seven-day week, what is the situation? Can we have more clarification? If a person takes on that degree of the upbringing of the child, there might be some concern about whether they are also providing things like half the clothing and school-runs, et cetera. There might need to be a declaration that a person is doing half the care or something very close to it. Should that be taken into account? I beg to move.
Lord McKenzie of Luton: I thank the noble Lord, Lord Addington, for moving this amendment and for the manner in which he did it. This group variously makes provisions to increase the threshold at which shared care is taken into account in the maintenance calculation; removes the new rules proposed by the Government to aid in the administration of shared care; and requires the Secretary of State to publish a report, within 12 months of this Bill coming into force, reviewing the current shared-care rules.
I am aware of the noble Lord’s concerns regarding the shared-care rules as they operate under the current schemes, and on the issue of the new shared-care provisions that this Bill will allow for. Therefore, I welcome this opportunity for debate, and recognise that the shared-care regime as it stands does not perfectly satisfy either parents with care or non-resident parents. However, I believe that the rules strike a reasonable balance between parents.
Amendment No. 82 requires the Secretary of State to publish a report reviewing shared-care rules with a view to their abolition. Shared care is an issue with no unanimous view about the right way forward. The consultation on the child maintenance White Paper revealed little common ground among stakeholders as to what the rules should be. As such, existing rules will be carried forward largely unchanged, and there are no plans to depart from the basic rule that any reduction should be based on the number of nights a non-resident parent has their child with them.
Obviously, as we have developed these and previous child maintenance proposals, we have fundamentally looked to uncouple issues of contact between parents and their children, recognising all the
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The rules that determine which parent should pay in a case of shared care are currently in regulations and will continue to be in the future scheme. If we decide to make any changes to the rules on shared care at the same time as we are introducing the first regulations for the new calculation rules, they will be made through the affirmative resolution procedure and therefore undergo scrutiny by Parliament. Such a report as suggested would therefore seem unnecessary. So there will be an opportunity to debate them.
We have introduced a number of minor changes to the shared-care regime to help parents reach an ongoing agreement, which Amendment No. 89 seeks to remove—I understand that it is a probing amendment. These changes allow regulations to be made which would allow the commission to proceed with a maintenance calculation for a certain period on the basis of an assumption about the level of shared care if parents have not yet agreed what the level should be.
In a range of discussions we had with stakeholders, it was represented to us that one problem in getting maintenance arrangements under way quickly was arguments about shared care. We looked administratively to see how we could cut through that problem. The proposal is that for the first six months of the case an interim decision will be made to give the parents the chance to reach a decision in their own time. At the end of the six-month period, if agreement has been reached, then that can be used as the basis for the adjustment of the maintenance calculation. If no agreement has been reached by that stage, then the reality of the existing shared-care arrangement can be used to determine the effect on liability. The aim is to help a pattern of shared care to be established that will provide a more accurate basis for the maintenance calculation. Removing those powers, as suggested by the amendment, would result in that not being possible.
Lord Skelmersdale: Before the Minister moves on, can he point to any place in the Bill where that interim arrangement is followed by a permanent arrangement?
Lord McKenzie of Luton: It would need to be covered in regulations. The Bill provides for regulations to be made to facilitate that.
Amendment No. 90 would mean that a reduction in maintenance liabilities for shared care would not occur unless care was shared for at least 150 nights per year. The noble Lord may wish to distinguish equal care from shared care. There are arguments about whether any maintenance should be paid in equal-care arrangements. That is not where the Government are on that; we are currently planning to carry forward the current arrangements. We are committed to recognising ongoing shared-care arrangements where they exist
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Where shared care does occur, in most cases it is for fewer than two nights a week. Only about 2 per cent of the agency’s caseload has overnight care of children for 156 nights or more per year. The reduction in maintenance recognises that shared care invariably involves non-resident parents in extra expense and that that can be substantial. The rules offer a simple and transparent incentive for non-resident parents to share care, both financially and in terms of legal recognition of the ongoing relationship. If the threshold for shared care to be taken into account is increased to 156 nights per year, more non-resident parents would be unable to meet the costs of their children staying overnight and shared-care arrangements would suffer as a result. I hope that on the basis of that explanation the noble Lord will feel able to withdraw his amendment. If he feels I have not covered all the points he raised, and if he lets me know, I shall try again.
Lord Addington: I thank the Minister for his response. On Amendment No. 82, his answer was, “Don’t worry. We’ll get back to it, probably in this Room, going through regulations at considerable length”. On reflection, I think that Amendment No. 90 might be too high a threshold. One of the reasons why it was designed as it is was to show that there should be an expectation that some contact—the odd overnight stay—should be regarded as perfectly normal. Is it part of the Government’s thinking that it should be quite normal to have some contact—for instance, the odd stay-over? Would that be regarded as normal, as nothing exceptional?
Lord McKenzie of Luton: Of course, we would encourage that sort of contact when it was appropriate—and there may be cases when it is not. At the moment the threshold at which adjustment to maintenance obligations kicks in with shared care is when it reaches 52 nights a year. Below that, if there are overnight stays, there would be no adjustment. So we already have a threshold. When overnight contact is between 52 or 103 nights, or further up the scale, and when it is appropriate, the Government would want to encourage it. It is for the parents and children involved to settle these matters. We do not want to have arrangements that would discourage that.
The problem with this issue, and the one that we face through a number of engagements with stakeholders, is that some say there should be no adjustment for shared care, while others say that there should be far greater adjustment. That is why we felt that there was no compelling reason to move away from the current scale, other than to seek administratively to ensure that the arrangements do not get in the way of allowing assessments to be made, not only in respect of the opening period and how you can identify what the starting point should be for shared-care adjustments but also to lock the arrangements in as part of the fixed-term awards. Another bugbear of the current system is that there are endless requests for changes of
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Lord Addington: I thank the Minister for that clarification—I had forgotten to ask the question initially. I hear what he says. It is probably a question of going away and having a think to see whether there is any mileage or new points to be brought out of this. The question is where we draw the line and how much encouragement should be given to regular but casual and normal contact. That is probably the underlying message, to try to get people involved. As that requires ongoing thought, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 16 [Changes to the calculation of maintenance]:
Lord Skelmersdale moved Amendment No. 84:
“( ) No application may be made at any time under this section with respect to a qualifying child or any qualifying children if there is in force a maintenance order in respect of that child or those children and the person who is, at that time, the non-resident parent.”
The noble Lord said: I begin with an apology to the Committee on this amendment, as not only is it in the wrong place but it is also in the wrong words, which does not help either advisers or participants in the Committee to understand what on earth I am on about. So I shall try again. A suggested place would be after Clause 16; in Section 4 of the Child Support Act 1991, subsection (10) should be deleted and substituted as follows:
“No application may be made at any time under this section with respect to a qualifying child or any qualifying children if there is in force a maintenance order in respect of that child or those children and the person who is, at that time, the non-resident parent”.
Would the Minister like me to repeat those details?
Lord McKenzie of Luton: Yes, although I think that I get the gist of it.
Lord Skelmersdale: Section 4 of the Child Support Act 1991, subsection (10) should be deleted and substituted as follows:
“No application may be made at any time under this section with respect to a qualifying child or any qualifying children if there is in force a maintenance order in respect of that child or those children and the person who is, at that time, the non-resident parent”.
The amendment is grouped with Amendments Nos. 194 and 195, both of which stand as printed in the Marshalled List, in the right place and in the right words! I tabled these three amendments to prompt a discussion on the 12-month rule, which features in Section 4(10) of the Child Support Act 1991. Amendment No. 84 is a proposed substitution of
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I shall provide a bit of background on the 12-month rule so that we are all singing from the same hymn sheet—or page of legislation. The rule applies where parents have a consent order or, in Scotland, minutes of agreement, made on or after 3 March 2003, dealing with the payment of child maintenance. The rule prevents parents from applying to the CSA for a maintenance calculation for the first 12 months that the order is in place. After that period, either parent may apply to the CSA, effectively terminating the original order.
The Solicitors Family Law Association—Resolution—provided me with a real case to explain the point. Resolution was acting for the parent with care in a divorce case, attempting to negotiate a financial agreement. The division of capital was actually agreed, but they failed to reach a settlement. The case had to go to a final two-day hearing, solely because of the issue of maintenance. While the non-resident parent offered a figure for child maintenance, they wanted it to be called a “school fees order” to ensure that after 12 months the parent with care could not refer the matter to the CSA with a result that the payment was reduced. The non-resident parent refused on that basis.
I have tried to anticipate the Minister’s retort. Perhaps he is about to say that if the 12-month rule was abolished, parents would be locked into agreements that were no longer working. However, that is not the case. An order for child maintenance invariably has an indexation clause providing for yearly increases. Applications back to court are therefore extremely unusual because, unless there has been a substantial change of circumstances—for example, one party has had a significant windfall—there is simply no need to return to court. The 12-month rule does not promote this “set and forget” concept, as it promotes future applications between the parties even if there has been no change.
The question then arises whether the 12-month rule becomes so crucial for all parents, because of the problems in the past, when parents transferred capital assets between them instead of future child maintenance. Again, that is a question that needs to be asked, as I have done, and answered—which has not yet happened. Surely the issue here is whether parents should have a choice as to how they deal with their own finances if they can reach agreement. Parents understand what they require and what is best for their children, and the 12-month rule undermines their ability to reach a voluntary agreement, as no parent will reach an agreement—especially when an element of capital is involved—if it can simply be undermined 12 months later. On what basis can the Government interfere in what parents believe between them to be fair?
The Government have said that they will consider this matter if a case could be made that it would result in,
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To me, such a comment only demonstrates that the refusal to abolish the 12-month rule has little to do with a concern about proper arrangements being made by parents for their children. I beg to move.
Baroness Hollis of Heigham: Could I explain my hesitations about the noble Lord’s amendment? As a probing amendment it is to be welcomed, because it will be interesting to see how the provisions have worked. But may I take him back a stage and explain about the 12-month rule? When we were looking at the CSA provisions for the 2000 Act, representations were made about the difficulty of having a sensible relationship between the CSA and the court system, and the degree of possible churning. Lawyers were sometimes altering the financial support between the parent with care and the children to minimise those obligations and, as the noble Lord rightly said, playing around with issues about capital and income.
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