Clause 19 - Payments after death of child
Child Trust Funds Bill
10:30 am
Mr George Osborne (Tatton, Conservative)
I beg to move amendment No. 193, in
clause 19, page 10, line 15, after 'representatives', insert 'or executors'.
Mr Joe Benton (Bootle, Labour)
With this it will be convenient to discuss the following: Amendment No. 185, in
clause 19, page 10, line 18, at end insert
'or a child to whom subsection (2A) applies.
(2A) This subsection applies to a child if—
(a) the child was born after 31st August 2002,
(b) a person was eligible for child benefit in respect of the child, and
(c) the condition specified in subsection (2B) is met.
(2B) That condition is that the Inland Revenue is satisfied that the circumstances of the death of the child provide reasonable grounds for the failure of a person eligible for child benefit in respect of the child to establish his entitlement.
(2C) Subsections (3) to (6) of section 2 apply for the purposes of determining eligibility under subsection (2A)(b) of this section as they apply for the purposes of determining entitlement under that section.
(2D) Regulations made under section 2(7) may also amend subsection (2A) of this section by substituting for the reference to 31st August 2002 a reference to an earlier date specified in those regulations in respect of section 2(1).'.
Amendment No. 169, in
clause 19, page 10, line 33, at end add—
'(5) Regulations shall be made to set out how payments will be made under this section without giving offence to parents after the death of their child and these regulations shall specify whether a parental request will need to be received by the Inland Revenue before a payment under this section is made.'.
Amendment No. 170, in
clause 19, page 10, line 33, at end add—
'(5) Regulations shall be made in relation to making payments under this section where the relevant child has been unlawfully killed.'.
Clause stand part.
Mr George Osborne (Tatton, Conservative)
The clause deals with the extremely tragic circumstances in which a child dies before they have reached the age of 18. As I understand it, the child trust fund would usually pass to the child's parent or, if the child was married, to their spouse or their child if they had a child. That is because in England, Wales and Northern Ireland, children under the age of 18 cannot make a will and so normal intestacy rules apply. Curiously, in Scotland a child can make a will at the age of 12 or over.
My amendment is intended to prise out of the Government some answers. First, can any parent whose child dies receive this payment, whether or not they have managed to set up a child trust fund or to
apply for child benefit? It is possible to envisage situations in which a child who is sick at birth dies within the first few days or weeks. Obviously the parents do not get around to applying for child benefit because understandably they have other things on their mind. This sum of money will not make a huge amount of difference but there could be some fairly rough justice. Parents who have applied for child benefit and established a child trust fund a week or two after the child's birth will receive this money and those who have not and were not told that they needed to do so will not.
None of this will compensate such parents for the loss of the child, but we know as constituency MPs how people can become very focused and, frankly, obsessed with what they regard as small slights by the state in tragic situations. I would not want the Government to find themselves in a position where a parent can say, ''I have not received this money when I should have done and it shows that the Government do not care about the death of my child.'' I am trying to help the Government to ensure that they have considered all the permutations of the matter, and to ensure that parents who have not applied for the child benefit, but who would have done and would have been eligible, receive the child trust fund money.
I also have questions—not strictly related to my amendments—about children in care. Normally, I would imagine that a child in care would have no estate when he or she died. However, because of this proposal, many children who previously would have left nothing on their death, will leave something. What will happen in that situation? Does the fund revert to the parents, even if they had no part in the upbringing of the child? The child might be in care because the parents abused him or her, and in such a situation it would be extraordinary if they received a financial reward.
I do not wish to tread on the territory of my Liberal Democrat colleague, but his amendment No. 170 attempts to raise that question with regard to a child who is unlawfully killed. That raises the question of when a child could be lawfully killed, but I shall leave the hon. Gentleman to explain that to the Committee. However, the purpose of his amendment is clear: we need some discretion.
The matter is very current: I was on the GMTV sofa at 6.20 this morning discussing the Sally Clark case. There will, however, be cases in which a mother or father has killed their child. Is it right that in those circumstances the child trust fund should go to the parent? I am sure that that is the thinking behind amendment No. 170, and I support it.
I also support amendment No. 169, and will make a general observation on what I imagine is the purpose behind it. The matter that it addresses is one of great sensitivity, and one would assume that the Inland Revenue would tread carefully in dealing with grieving parents.
Mr David Laws (Yeovil, Liberal Democrat)
Amendments Nos. 169 and 170 are in the spirit of the probing amendments tabled by the hon. Member for Tatton. To some extent the hon. Gentleman has anticipated the comments that I intended to make. Both the amendments deal with sensitive issues, which we hope will affect only a small number of people. However, it seems sensible to consider them at this stage in the Bill, to ensure that we take every opportunity to avoid giving offence to people.
Amendment No. 169 seeks additional information and guidance from the Government on how the Inland Revenue will deal with a situation in which a child has died before a payment. We could be considering the initial contribution—a child may have died at an early age. In those circumstances, as the hon. Member for Tatton said, a family will be grief-stricken, and the way in which the Inland Revenue interacts with that family over the issue could give huge offence.
The issue is difficult for both the Inland Revenue and the Government. Some people might take offence at the idea that the Inland Revenue had not made a payment that was due to them when a child had died. However, other parents might identify the child trust fund entirely with the individual child, and when that child had died, they might therefore be extremely upset to receive communications from the Inland Revenue about a payment being made in those circumstances. Those of us who have known parents who have lost children at an early age will know what a difficult time that is, and how long-lasting it can be. I hope that the amendments will prompt the Inland Revenue, if it has not done so already, to consider how it should interact with parents under such circumstances, particularly where children have died very early in their lives. I hope that consideration will also be given to the appropriate communication by the Inland Revenue of the entitlements that will be established by the Bill. I am not questioning that those entitlements are the wrong ones, or that the Government should not make payments under those circumstances, but I can see scope for grave offence being given. Different parents will respond to communication from the Inland Revenue in different ways. The Government need to bear that in mind when considering that process.
As the hon. Member for Tatton may already have anticipated, amendment No. 170 deals with an even more sensitive situation, where a child has been killed by the parent. Is there a law that already deals with such circumstances and anticipates how the child trust fund revenues would be allocated? Is that something for the child trust fund regulations? If it is, will the Minister confirm that, under those circumstances, the Government would not make payments from the proceeds of the child trust fund account to the parent?
Ms Ruth Kelly (Financial Secretary, HM Treasury; Bolton West, Labour)
The clause deals with the tragic situation that hon. Members have outlined, where the child dies before the Inland Revenue has made a child trust fund payment that would otherwise be due. It also deals with cases where a child trust fund payment has been paid but has not been credited to a child trust fund before the death of a child.
Amendment No. 185 would enable the Inland Revenue to make payments to personal representatives of a child if the child has died and an entitlement to child benefit has never been established for the child. The Committee has already discussed the issue, during the debate on clause 2, which concerned reasons for basing eligibility for the child trust fund on entitlement to child benefit. Child benefit will act as a clear and secure pathway to the child trust fund payment. There will be a straightforward mechanism under which separate claims for the child trust fund will not be required. If a parent claims child benefit, eight weeks of benefit is awarded, even though the child has died. I took the decision that no separate payment or claim would be needed for the child trust fund in such circumstances. That would be the least intrusive approach as the parents would already have contacted the child benefit office. It seemed too bureaucratic to ask them to apply yet again for the child trust fund. If parents do not contact the child benefit office, I think that it is wise to assume that they would not wish to be contacted to have their eligibility assessed. On that basis, I ask hon. Members not to press that amendment.
Amendment No. 193, amending clause 19(1), says that
''the Inland Revenue may make a payment to the personal representatives''
after the death of a child. Payments made under this clause will go the deceased child's estate. ''Personal representatives'' covers both ''executors'' and ''administrators'', and that is applied throughout the UK. That point will be checked with parliamentary counsel, but I think that that amendment is also unnecessary.
I should like to deal with the other points that have been raised: first, what happens to children in care? Payments can be made to personal representatives of children in care who have died. The clause sets out the fact that the Inland Revenue has the ability to make such a payment: it says that the Inland Revenue ''may'' make a payment to parents. However, that would clearly not happen in cases such as that cited by the hon. Gentleman, where there has been an unlawful killing of the child by the parent. Clearly, payments by the Inland Revenue in such cases would not be appropriate, and that power would not be used.
Mr David Laws (Yeovil, Liberal Democrat)
On the earlier point about the circumstances in which a payment would be made when a child had died, particularly very early in its life, and where the child benefit claim had already been made, can the Minister anticipate that a parent receiving a payment relating to the child's CTF account could take great offence at that, even if the Government had the best intentions? Can she say something about that process? Will parents be given any choice, bizarre as that may seem, whether to receive that payment? Alternatively, will a parent receive a payment in the name of the child who died weeks or months before? I hope that the Minister understands that I am not trying to make an unhelpful point, but it is possible that even though the money
might be paid out with the best possible intentions, it could give offence to people in those difficult circumstances.
Ms Ruth Kelly (Financial Secretary, HM Treasury; Bolton West, Labour)
I understand the hon. Gentleman's point. We are firmly of the view that the approach that I have outlined is the most sensitive. The alternative is that the parent contacts the child benefit office, decides that they wish to receive the eight weeks' payment of the child benefit after the death of a child and then we contact them yet again to ask whether they wish to receive the child trust fund payment.
The clear link, on eligibility, between the child trust fund and the child benefit system, which we established in earlier debates, represents the most sensitive way of dealing with the problem. The parent should have to make contact with the system only once to receive money that should rightly be in the estate of their child. There are no easy answers to such questions, which are clearly very sensitive, but we are of the opinion that the approach that we have set out is the least intrusive available. On that basis, I ask the hon. Gentleman to withdraw the amendment.
Mr George Osborne (Tatton, Conservative)
This is a sensitive issue and the Minister demonstrated in her answer that she has thought about it carefully. She made the point, and it is the first time that I have heard it, although it is in the Bill, that there is a discretionary element to what the Inland Revenue does. Subsection (1) states that the
''Inland Revenue may make a payment''.
One would assume that it would exercise that discretion in horrific circumstances such as cases in which a child had been murdered by their parents or subjected to abuse by them and put into care as a result. It was good to hear the Minister's remarks on that.
In a way this is a new situation for the Government. Of course, some children do have large estates, but most do not, so it is unusual on the death of a child for there to be any money that needs to be formally allocated. Unfortunately, children die every day in our society and the Government and the Inland Revenue may find themselves involved in a sensitive area that has not normally concerned them in the past. However, I was reassured by the Minister's comment that the issue has been carefully considered, and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 19 ordered to stand part of the Bill.