Reform of the Child Support Agency

Analysis by the Lib Dems shows that 4 out of 5 absent parents paid no cild support in the three months to October 2005. I believe that the Child Support Agency has lost the confidence of the public, its basic structural problems remain and it is not properly suited to cary out its task

Only 297,000 non-resident parents out of 1,449,000 cases with the CSA had made one or more payments towards the upkeep of their children in the three months to the end of September 2005. Even the Prime Minister admitted on 16th November 2005 that: "The truth is that the agency is not properly suited to carry out that task

The CSA lost the public's trust long ago. It has also lost the Prime Minister's. The CSA has been failing children for far too long and radical action is now required. If the Government is serious about helping parents honour their moral responsiblity to maintain their own children, then they must replace the CSA with an organisation which can deliver the child support which families need.

The Liberal Democrats would reform the CSA in the following way

1. We believe that the existing agency should be scrapped, and its functions transferred to HM Revenue and Customs. There will need to be a transitional period. During the transitional period, automatic access to information on families with children and income details for all taxpayers held by the Revenue must be made available to the existing CSA. The Government must make clear that the main aim of the CSA is to get extra financial help to children.

2. The CSA must retain a simple, tax like, formula for assessing maintenance. Simplicity is vital if maintenance calculations are to be made quickly and reliably.

3. The ability to make orders in line with the child support formula should be returned to the courts where they are already making other orders, for example in relation to the family home, pensions, savings or spousal maintenance. This could reduce the need for the CSA to get involved in complex cases, which are already being looked at by the courts.

4. Information gathering powers for the new organisation must be improved so that access to information held by other arms of Government and other organisations, such as banks and credit agencies, can be made easier.

5. There should be a new statutory requirement on non-resident parents to report a change of address or change of job, as recommended by the Select Committee. It is absurd that this is not already the case. Deduction made directly from earnings should automatically transfer to new employers, as recommended by the Select Committee.

6. Payments of maintenance at the determined rate must commence within, say, 28 days. For those who miss the maintenance payment deadlines, or who miss more than one payment, maintenance will be deducted at source from income – in the same way as for PAYE. Deduction from earnings at source is likely to be far more widely used under this new regime. HMRC should also look at whether new powers are needed to secure maintenance which is owed – including interception of income tax refunds and collection of monies held in savings accounts. There will continue to need to be close cooperation with Jobcentre Plus to ensure that Parents With Care on income support receive the £10 maintenance premium, and to liaise about child maintenance deductions from the benefit of NRPs.

7. Staff numbers must not be cut while the agency is in such a state of crisis.

8. An effective enforcement arm should be established which begins action by first discussing the debts with both parents and negotiating an affordable payment arrangement, before appropriate enforcement action is taken. The new organization needs a much stronger culture of enforcement.

9. There should be a new Child Support Arbitrator, able to bring together different generations of application and impose a solution that reflects the particular circumstances of the family and so bring complex and long-running cases to a close. This arbitrator would not, however, be allowed to cut across the standard formula, introducing excessive complexity into the system. Compensation should be paid by the CSA when its actions have been negligent, and this should be proportionate to the losses incurred.

10. New Legislation on the CSA and/or its successor must be carefully scrutinized both by Parliament and by an expert Child Support Advisory Committee.