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Regime change

15 September 08

What will change, and what will not, as the Child Maintenance and Enforcement Commission takes over from the Child Support Agency

by John Fotheringham

After years of waiting, and after the optimism of the Henshaw Report last summer, and after a great deal of pretended public consultation, the reform of child support has finally arrived on the statute book. The Child Maintenance and Other Payments Act 2008 was granted royal assent on 5 June, and the proposed timetable is in place for full implementation of the 45 sections and 8 schedules which deal with the reform of child support rather than with lump sum payments for mesothelioma, etc – the “other payments” of the new Act.

The headline news is that the CSA is to be abolished and replaced with the Child Maintenance and Enforcement Commission – CMEC – which includes as its objectives, “To encourage and support the making and keeping by parents of appropriate voluntary maintenance arrangements for their children”.  Despite this, the 12 month rule is left intact. This will be discussed below.

Plus points

There is some good news in the Act.

By s 15 the old rule whereby a benefit claimant was automatically treated as being an applicant for child support will be abolished. So will the reduced benefit provision in s 46 of the principal Act, so that there will be no penalty for a mother who refuses to name the father of her child. This is probably more of an illusory benefit than a real one, because nowhere in the Act is there any provision for such a mother to obtain any aliment from the father of the child if she does not fully co-operate with CMEC – but at least the compulsitor is now functional and practical rather than administrative.

The new rules of calculation will start to apply, according to the government, in 2010 or 2011 and the present £10 per week disregard for applicants on benefit will be increased then to £40 in respect of all new applications. Existing cases at that point will be transferred to the CMEC system over a period of three years thereafter, and all clients should be on the CMEC rules by 2013 or 2014. This government timetable may be seen by some as being aspirational, and whereas we will all be keen to see the improvements brought in as soon as possible, we have experience of what happens when the government has tried to rush in child support reform when the systems have not been properly in place.

Orders without a court

Many solicitors are familiar with the sight of a brand new client who at the first meeting produces an application on behalf of the Secretary of State for a liability order in the sheriff court. There are things that can be done about an application and valid opposition which can be made – don’t let the CSA nor any sheriff tell you otherwise – but under CMEC the liability order will be granted administratively and not by the court at all. True, it will be possible to appeal against the order, but it may be that the average member of the public will be less likely to consult a solicitor in respect of an administrative order already made than they would have been in respect of an application to the sheriff. This of course may be one of the reasons why the law has been changed.

Enforcement options

The range of potential penalties and enforcement measures has been extended by the new Act, and the officers of CMEC will be authorised to remove your client’s passport administratively, without any application to the court. Again, there is an appeal, but under limited circumstances. CMEC may also seek curfew orders, commitment to prison and disqualification from driving.

Registered minutes of agreement

The registered minute of agreement is a very useful feature of Scots law. It does not really have an equivalent in England and this may be one of the reasons why the Secretary of State has chosen to ignore its special features in relation to the 12 month rule. The registered minute of agreement does make an appearance in the new Act in s 35, in which the agreement is declared to be a written agreement to which the 12 month rule applies. The Law Society of Scotland made strenuous efforts to persuade the government to address the problem of the 12 month rule, but DWP refused to listen.

Accordingly if your clients enter into a minute of agreement (after March 2003), either party may, after the expiry of one year from the date of the deed, insist that the CSA carry out a maintenance calculation if the children concerned are qualifying children. This is the case even if a sum of money has been paid in advance to the parent with care (PWC). As a matter of observation the officials of the CSA have been known to misinform clients (and their solicitors) by saying that the application for maintenance calculation at the instance of the non-resident parent (NRP) cannot proceed without the consent of the PWC. This is of course utterly wrong and any such comment from the Agency or from CMEC should be met with a demand to speak to someone more senior and better trained.

The upshot of this of course is that very few NRPs will be willing to sign any alimentary agreement on the basis of any capital payment to a PWC, even though that may be a very useful way of organising the parties’ division of assets.

The new calculation

When the new cases become live there will be a differential maintenance calculation. Those NRPs who have earnings of £800 per week gross or less will have to pay 12% of that gross income where there is one qualifying child, 16% where there are two and 19% where there are three or more.

If the NRP has gross earnings in excess of £800 per week, then he will pay 12%, 16% or 19%, depending on the number of children, on the first £800 of his gross earnings and then 9%, 12% or 15%, depending on the number of children, on the balance above £800 per week.

Note that the calculation will be on gross earnings rather than net, so that the self-employed NRP will have less scope for bending or massaging the income figures against tax in any given year.

The existing earnings cap for CSA purposes of £2,000 per week net will be replaced by a cap of £3,000 per week gross.

Whose benefit?

It remains to be seen how well or badly the new system of child support maintenance will work. The government intends to farm out many of the functions of CMEC to private contractors who, it may be argued, will run the system more efficiently but who will certainly have to try to run it at profit. If they are to be paid in respect of the amount of maintenance which they recover then we will all have to be especially vigilant to make sure that that profit motive does not spill over into an improper administration of the child support system, which should after all work for the benefit of children rather than for the state or for their hired contractors.

One disturbing feature of the CMEC system is that CMEC itself will be a non-departmental body – administratively analogous to one of the industry regulators – so that no politician will have parliamentary responsibility for the day-to-day running of the new body. If your client’s Member of Parliament should challenge the Secretary of State in the House of Commons in relation to any operational absurdity of CMEC, the Secretary of State will be able to say quite simply, “not my department”.

It will be up to the lawyers to test the new system of child support and the officials and private contractors who run it. Our clients have never been more in need of protection from any system designed (or declared to be designed) to protect the interests of children and families.

John Fotheringham is a consultant to Fyfe Ireland LLP, Edinburgh and Glasgow, and an accredited specialist in child and family law