Child Support (Miscellaneous Amendments No. 3) Regulations (Northern Ireland) 2019

Executive Committee Business – in the Northern Ireland Assembly at 2:15 pm on 1st June 2020.

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Photo of Roy Beggs Roy Beggs UUP 2:15 pm, 1st June 2020

Members, the next two motions are to approve statutory rules relating to child support. There will be a single debate on both motions. I will ask the Clerk to read the first motion, and then I will call on the Minister to move it. The Minister will then commence the debate on both motions. When all who wish to speak have done so, I shall put the Question on the first motion. The second motion will then be read into the record, and I will call the Minister to move it. The Question will then be put on that motion. If that is clear, we shall proceed.

Photo of Deirdre Hargey Deirdre Hargey Sinn Féin

I beg to move

That the Child Support (Miscellaneous Amendments No. 3) Regulations (Northern Ireland) 2019 be approved.

The following motion stood in the Order Paper:

That the Child Support (Miscellaneous Amendments No. 4) Regulations (Northern Ireland) 2019 be approved. — [Ms Hargey (The Minister for Communities).]

Photo of Roy Beggs Roy Beggs UUP

Thank you, Minister. The Business Committee has agreed that there will be no time limit on the debate. I call the Minister to open the debate on both motions.

Photo of Deirdre Hargey Deirdre Hargey Sinn Féin

The regulations have enabled my Department to amend the child maintenance legislation to deliver the child maintenance compliance and arrears strategy. I will begin by setting out the background to that strategy, and then I shall detail the regulations.

In November 2017, my Department was included in a consultation by the Department for Work and Pensions (DWP) on the proposed child maintenance compliance and arrears strategy, which also included England, Scotland and Wales The approach taken has been to ensure that people are treated equally across those areas. The objectives of the strategy were to continue to prioritise resources to benefit the children of today; to continue to encourage parents to collaborate over their child maintenance arrangements where they can and where that is in the best interests of their children; to continue to minimise the child maintenance arrears being incurred; to further improve compliance through changes to child maintenance calculations; to strengthen collection powers across the child maintenance schemes; and to address the historic arrears that have built up under the former child maintenance legacy schemes and avoid government funding of high-cost attempts to recover historic arrears, which would, in fact result in no additional money going to children.

Following the conclusion of the consultation and an analysis of the responses received, work began on taking forward the required legislative changes to successfully implement the compliance and arrears strategy. There are two packages of regulations, which I will outline separately.

The first package is the Child Support (Miscellaneous Amendments No. 3) Regulations, and these introduce a number of changes to child maintenance legislation. Changes include improving the way in which child maintenance liabilities are calculated, increasing the range of collection and enforcement powers to help collect more money for children and addressing historic arrears that built up under the 1993 and 2003 child support legacy schemes. These changes will also help to prevent non-resident parents with complex financial arrangements from artificially lowering their child maintenance liability.

The regulations also close existing loopholes by introducing new provisions for orders. The orders enable regular or lump sum deductions to be made from joint, sole trader and unlimited partnership accounts. Powers are introduced to allow the arrears that occurred under the 1993 and 2003 legacy schemes to be written off in certain circumstances. These powers allow my Department to give certainty over its approach to the arrears.

On the child maintenance calculation and amendments, the regulations introduce a power for child maintenance service to determine a notional income from assets held by a non-resident parent. This helps to ensure that child maintenance calculations result in non-resident parents paying an amount that more accurately reflects their means. The notional income shall be calculated at 8% of a confirmed asset's total value where the asset value exceeds £31,250. You may wish to note that protections have been included to ensure that the use of these powers is proportionate. That would include certain circumstances, such as when the asset is used for business purposes or is the primary home of the parent or a child.

The regulations extend existing powers to apply regular and lump sum deduction orders to joint and unlimited partnership bank accounts and use lump sum deduction orders on sole traders' accounts. Again, my Department has ensured that the adequate safeguards are in place to protect the interests of other account holders.

With regard to historic arrears from 1993 to 2003, the regulations extend my Department's write-off powers to enable the arrears of up to £57·9 million that had built up under the 1993 to 2003 legacy schemes to be addressed and set out the circumstances under which these powers can be exercised. Members may wish to note that the arrears relate to legacy child maintenance scheme cases that could be more than 20 years old and where the children are now adults. It is also likely that the arrears balance was inaccurate due to the penalty assessments and inaccurate or out-of-date calculations at that time. A high proportion of the arrears are now deemed to be uncollectible, and attempting to collect the arrears is now deemed not to be cost-effective.

It should also be noted that it was estimated that more than 50% of the arrears were due to the Department and, therefore, would not benefit families. Where the arrears value is £65, the regulations enable the arrears to be written off without notice to either parent. This is in line with the current threshold used in my Department for debts owed to government.

If a case has debts subject to Scottish insolvency, the regulations will enable the debt to be written off when that expires. A parent with care will be able to make representation to my Department if they would like an attempt to collect the arrears where the case started on or before 1 November 2008 and the arrears are more than £1,000; the case started after 1 November 2008 and the arrears are more than £500; or the arrears occurred under the 1993 to 2003 legacy schemes case, which was transferred to the 2012 child maintenance system, and the debt is more than £500. Where no representations are received or collection of the arrears is not possible, my Department may exercise the power to write off the debt.

The regulations enable legacy child maintenance arrears to be written off without seeking representations from parents with care where there has not been a payment in the past three months; the case started on or before November 2008 and the arrears are less than or equal to £1,000; the case started after 1 November and the arrears are less than or equal to £500; or the arrears occurred under the 1993 to 2003 schemes that have transferred to the child maintenance system and the debt arrears are less than or equal to £500.

Those amounts were selected as it was deemed not to be cost-effective to attempt the collection of individual arrears of less than £500 or of less than £1,000 where the case is more than 10 years old. It would, on average, cost between £500 and £1,000 to investigate such cases and take further action. Given the background and historical aspect of the legacy cases, it was deemed to be highly unlikely that the arrears would ever be recovered. To date, my Department has addressed almost 10,000 cases with an arrears value of £27 million through the process that I have outlined.

The second package of regulations are the Child Support (Miscellaneous Amendments No. 4) Regulations. The purpose of these regulations is to introduce changes to legislation, introducing remaining compliance powers: namely broadening the range of benefits from which arrears of child maintenance can be deducted; expanding the list of persons from whom relevant information can be requested by my Department; write-off powers to extinguish debt where a protected trust deed has been granted to a parent and has expired; and making a minor and technical change to the child maintenance calculation and fees regulations.

These regulations increase the amount of maintenance that can be deducted from benefits towards arrears to £8·40, that is £7 and a £1·40 collection fee. That is 20% of the overall amount. That now aligns with the amount that my Department can already deduct from benefits for ongoing maintenance. Extended deductions for arrears from all benefits from which my Department can deduct for ongoing maintenance prevent arrears from being deducted at the same time as deductions towards ongoing maintenance.

The maximum that can be deducted at any one time is always £8·40 to enable deductions for ongoing maintenance and arrears from universal credit where the non-resident parent has earnings and meets the criteria for the flat-rate maintenance calculation. My Department could already deduct for ongoing maintenance from universal credit where the non-resident parent had no earnings and met the criteria for the flat-rate maintenance calculation.

On protected trust deeds, the regulations extend the write-off powers to enable the Department to write-off related to the Scottish protected trust deed, which is legally uncollectible as a result of this process.

These regulations extend the list of organisations that must provide information to my Department to include mortgage lenders and occupational pension providers. Previously, those organisations had to comply with such a request but it had to be carried out by an inspector visiting the premises.

The regulations make further technical amendments to change the way that the Department will calculate child maintenance liabilities for a parent who is claiming expenses. They also change the wording of the Child Support Fees Regulations (NI) 2014 to clarify and maintain the policy intent and they go on to state that any arrears that occurred on collect-and-pay or direct pay, which will be moved into the collect-and-pay service, will include the collection of fees, and that those fees are enforceable.

The two packages of regulations build on previous work to widen enforcement powers and close down loopholes. They also commit to the Department tackling the historic arrears that represent the child maintenance legacy schemes in a way that best balances the interests of parents and public funding.

The Department will further develop collection measures and information-gathering powers. These measures will help to make child maintenance fairer for all parents and ensure that we fully deliver on the commitments of the compliance and arrears strategy.

Photo of Paula Bradley Paula Bradley DUP 2:30 pm, 1st June 2020

The Committee considered these regulations at its meeting on 6 February. The Child Support (Miscellaneous Amendment No. 3) Regulations (Northern Ireland) 2019 will revoke and re-enact the provisions of the Child Support (Miscellaneous Amendments) Regulations (Northern Ireland) 2018.

The regulations provide for the powers which were introduced in December 2018 to continue in force. Their main purpose is to improve how child maintenance liabilities are calculated, to increase the range of collection and enforcement powers, to help collect more money for children and to address historical arrears that have built-up under the legacy schemes.

I am glad to see this issue being brought forward as I understand that, for many parents, arrears in child maintenance can be damaging to relationships between resident and non-resident parents, which then has a knock-on effect on their children.

The Child Support (Miscellaneous Amendment No. 4) Regulations (Northern Ireland) 2019 introduce a number of changes to child maintenance legislation. They will change the range of benefits from which arrears of child maintenance can be taken, and they expand the list of persons to whom the Department can write to request that information be provided.

The regulations also provide for child maintenance debt that was subject to a protected trust deed and that has expired without being converted to bankruptcy, and make minor and technical changes to the child maintenance calculation and fees regulations.

The Committee recommends that both the regulations be approved by the Assembly.

Photo of Kellie Armstrong Kellie Armstrong Alliance

I absolutely agree with the Chair of the Committee, which has already seen and considered part of the regulations. I have absolutely no problem with arrears being dealt with in this way — it looks like common sense because arrears can create emotional difficulties between partners who are no longer together and can lead to years of problems.

Just for clarification, when we look at regulation No. 3 about the joint and unlimited partnership accounts, I have a slight concern about how the amount is calculated. Is any consideration given to the non-resident partner's own children and whether the deductions that are being taken from that non-resident partner's future or other children that they have, in a way that does not leave them living in poverty? I completely appreciate ensuring that the children of parents who are no longer together must have child maintenance payments made, but I have always been concerned about the second family, and whether that family is taken into consideration when the calculations are worked out.

Photo of Roy Beggs Roy Beggs UUP

No other Members have indicated that they wish to speak, so I call the Minister to conclude and wind up the debate on the motion.

Photo of Deirdre Hargey Deirdre Hargey Sinn Féin

I thank the Chair of the Committee for her words. Also, just to respond to Ms Armstrong, when those deductions are being looked at, those are considered. This is about dealing with legacy debt that is over 20 years old. As I said, part of the calculations were based on estimates, so they do not really reflect what the true income was at that time, and most of those will probably be written off.

Again, I thank Members for their consideration of this. I know that the regulations are quite technical and long and that they are dealing with legacy issues and debt. I commend them to the House.

Question put and agreed to. Resolved:

That the Child Support (Miscellaneous Amendments No. 3) Regulations (Northern Ireland) 2019 be approved.