Negative Impact to new families (and children) by regulations “justified” say DWP

We wrote recently about the interaction between a backbench MP, Heidi Allen, DWP and the Child Maintenance Policy Department (headed by Julia Gault) as it pertained to the recent piece of Secondary Legislation passed relating to Child Maintenance in the UK. You can read that piece here.

We have now become aware of a number of other internal DWP documents that shed further light on the process and influence that Heidi Allen, Gingerbread and Families Need Fathers had on the formation of this piece of legislation. The DWP only released the data following an ICO complaint.

This item of Regulations did three things:

  1. Permitted the government to start writing off the historical arrears created under the 1993 and 2003 CSA systems
  2. Allowed the CMS to start making lump sum deduction and regular deduction Orders from unlimited partnership accounts and joint accounts of individuals
  3. Amended the variation regulations to re-introduce the “Asset grounds” for a variation by imputing an income from non income producing assets above £31,250
  4. Enacting a previously approved legislation to disqualify paying parents from holding a Passport in certain circumstances

We don’t propose to go through every single piece of information as readers can review the documentation at their leisure. We will however highlight a few pieces of information in the documentation which we thought were particularly interesting.

Arrears Write Off

Cost of arrears maintenance

 

Question: How much are the CSA arrears costing government?

Answer: If we are unable to proceed with the writeoff changes we will need to either continue to fund the CSA IT systems inevitably at a cost of around £25 to £30 million per year, or move all cases onto 2012 scheme IT system at a cost of c.£250m.

Cost of arrears collection

 

Question: How much would it cost the government to collect the alleged arrears and how much could they realistically be expected to collect?

To attempt to collect all of the outstanding CSA debt would cost around £1.5bn, and we would only be able to recover between £0.1bn and £0.6bn. The likely low levels of collection are due to out of date information making it hard to trace paying parents, as well as parents simply not having the resources to pay these debts .  (emphasis added)

Are the arrears balances on a per case basis large?

Much of the debt is made up of very small amounts. 3% of CSA historic arrears cases have debt of under £10. 14% have debt under £65.

Joint and unlimited business account deductions

Why haven’t they introduced this earlier?

We wanted to implement deductions from solely held accounts, and allow the basic process to become established before looking to extend it to joint accounts.

Isn’t there a risk to businesses if deductions are made from their accounts?

Safeguards have been put in place to ensure a minimum of £2000 is left in unlimited partnership business accounts to ensure the business has enough cash flow to continue running.

Editor Note: clearly this is a nonsense as the amount that a business would need to keep operating is variable and based on the independent working capital requirements of the business.

What about the effect on new families?

While this additional responsibility may impact negatively on the NRP’s ability to form a new family, we consider this to be justified.

Paragraph 52 of DWP Joint Account deduction Impact assessment

Assets

There is very little information on their thought process about the introduced asset variation. It appears to be a substitute for the previous “lifestyle variation” available under the CSA.

Why haven’t you reintroduced variations to the maintenance calculation on the basis that the nonresident parent’s lifestyle is inconsistent with their declared income?

This was a feature of the Child Support Agency schemes, and proved to be ineffective. It was therefore deliberately excluded from the Child Maintenance Service scheme. In many cases the non-resident parent’s lifestyle was supported by credit or by a new partner.

In circumstances where there is an identifiable income stream, this will already be taken into account under our existing powers.

Where a parent has assets, but is living off capital or has no identifiable income stream then determining a notional income based on those assets provides a more efficient way of calculating income than lifestyle inconsistent.

Passports

Removing passports is an infringement of a person’s human rights?

 

This measure will help target a group of non-residents for whom the existing available sanctions are ineffective in achieving compliance.

It will only be used as a last resort, where all other enforcement actions have been found to be inappropriate or ineffective.

We only anticipate using it in a small number of cases, but we expect it to have a deterrent effect, encouraging compliance in a larger number of cases.

This does not actually answer the question and is tantamount to saying “we know but we’re only going to do it to a few people so that’s ok”

 

Were there any external organisations that the DWP involved in this process?

The 2 organisations that DWP appears to speak to regularly (monthly meetings) are Gingerbread and Families Need Fathers.

Firstly, they say this:

We have had a number of meetings with our main stakeholders Gingerbread and Families Need Fathers which have been positive and have not resulted in them raising any major concerns about the content of the consultation.

But, that’s not quite true as further down (presumably after the author thought the reader would be too bored to continue) they say:

FNF are not so supportive of the compliance proposals in the consultation as these are not felt to encourage and improve shared parenting and active involvement of fathers in raising child. They felt that the consultation along with the narrative used in Parliament by Heidi Allen risks alienating fathers by branding them as “deadbeat”.

FNF claimed that the consultation places itself in the a wider context of a system biased in favour of mothers that alienates and isolates fathers who are reduced to simply paying maintenance and are not integrated in the lives of children. Officials met with FNF to discuss issues raised at the previous meeting.

FNF raised concerns around the affordability of maintenance and the current allowances within the statutory scheme for shared care – this is not related to anything in the consultation. We have work on-going on these issues and have a further meeting planned for 21 February 2018.

And on Gingerbread they say

Gingerbread understood our approach to historic debt built up on the CSA, and the rationale for this. They were also supportive of our proposals to improve the child maintenance assessment and introduce tougher collections measures.

Supporting Documentation

Please download and read the internal documentation for yourself. The various players who’s names you will see again and again are:

Heidi Allen MP – The MP for South Cambridgeshire

Justin Tomlinson – Junior Minister at the DWP responsible for Child Maintenance

Kit Malthouse – Junior Minister at the DWP responsible for Child Maintenance (prior to Justin Tomlinson)

Tom Mccormack – Head of the Child Maintenance Group

Download Links:

PARLIAMENTARY HANDLING STRATEGY DWP PBL PANEL CLEARANCE – Briefing note sent to the Parliamentary Business and Legislation Committee.

Summary of DWP position sent to PBL by DWP

18 Emails between various members of the DWP, Heidi Allen’s office Parliament

Letter to PBL from DWP

Opinion of DWP on Heidi Allen’s Private Members Bill

Impact assessment on joint and business bank account deductions by Julia Gault’s department

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