Clause 5 - Entitlement periods

Part of Childcare Payments Bill – in a Public Bill Committee at 11:00 am on 21 October 2014.

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Photo of Priti Patel Priti Patel The Exchequer Secretary 11:00, 21 October 2014

Clause 5 deals with entitlement periods, another fundamental building block of the new scheme, which are designed to ensure that it is simple for parents to use. Entitlement periods will deliver certainty and make parents safe in the knowledge that their entitlement will last until the end of the period, regardless of any changes in their circumstances.

The clause sets out that an entitlement period will be three months long, a key scheme design feature that takes into account both the views of parents and the need to learn lessons from tax credits—as we have touched on—about the risks of long entitlement periods. The three-month entitlement period also avoids both the additional errors and overpayments that an annual scheme entails and the excessive administrative burden that monthly reconfirmations would place on parents.

A three-month period strikes the right balance between simplicity and certainty for parents and not allowing entitlement to continue for too long without checking continuing eligibility. Furthermore, the requirement for parents to reconfirm their details regularly in order to access Government support will be an effective means of reducing the number of ineligible parents seeking to access the scheme, and it will be more effective than requiring parents to notify us immediately of every change in their personal circumstances. We know from tax credits that many simply would not do that.

The clause also allows regulations to vary the length of an entitlement period for a particular person in specified circumstances. We intend to make regulations to allow, for example, an entitlement period to end around the middle of the month, thus avoiding the potential confusion that might arise if a parent were required to reconfirm their eligibility at the same time as payments were made into and out of the account. We also intend to use the powers in the clause to allow for all child care accounts held by one parent to have the same entitlement period end date, so that they can reconfirm their eligibility for all their children at the same time.

The hon. Lady’s amendment appears to reflect a concern that the quarterly reconfirmation cycle will be onerous for parents. It would require the Chancellor to review the effectiveness of the three-month entitlement period 12 months after the first child care account is opened, then to publish a report and lay it before the House of Commons. The quarterly entitlement regime design was reached after extensive stakeholder engagement and has been welcomed by those we consulted and engaged. The Government currently have no intention of altering the entitlement period, for the reasons to which I have already alluded.

I want to emphasise that the entitlement period system, with the requirement for parents to actively reconfirm, is aimed at driving behaviour. It is reasonable to ask parents to take that small step every three months in order for them to secure continuing entitlement and for the Government to be certain that taxpayers’ money is not being paid to people who are not entitled to it. Once in the scheme, parents will receive reminders of the need to reconfirm their eligibility via their preferred communication channel—normally e-mail or text. I have touched on the walk-through of the scheme that I have had; it is straightforward and happens quickly. After that, parents will have a three-week window in which to reconfirm, allowing them the flexibility to do so at any time of their choosing.

When a parent reconfirms, all the forms will be pre-populated with their information provided at registration, so they will not have to re-upload data or personal information. That will save time and effort. We have had comments from parents when we have engaged them on the scheme, along the lines of, “If I am managing  an online account, I would expect to receive e-mails or text reminders”, because that is how many of us operate now, whether in online banking or purchasing goods online. We have also heard, “I would expect my eligibility to be checked first before I waste any time going back on the system.” In particular, parent groups welcomed the continued entitlement period for a number of reasons. They thought it would give parents the opportunity to get another job and therefore become eligible for the scheme in time for the beginning of the next fixed quarter. It was also felt that it would enable some parents to make changes to their child care arrangements, depending on their circumstances.

I remind members of the Committee that a review of the effectiveness of the scheme is already planned and is referred to in the published impact assessment. That review will take place two years after the new scheme is fully implemented and will consider the appropriateness of all aspects of the scheme rules. It is therefore wholly unnecessary to require an additional review in the Bill, as that is already covered. I therefore ask the hon. Lady to withdraw her amendment.