The child support system is in disrepair, and although the Government has not openly admitted it we can sense the weariness with which the system is defended by ministers. It is not certain how keen the Government would have been to reform it, had the spending cuts not made it necessary to run child support even more on the cheap than before.
At this point last year, CMEC had a caseload of 1,154,000, of which some 96,000 had to be managed clerically because the computer system could not handle them. £1.146 billion had been collected, including £137 million of arrears, leaving total arrears of £3.775 billion. At that rate the arrears should be cleared in about 27 years. CMEC costs £500 million per annum to run.
These figures clearly suggest that the system is not working well enough. Our clients tell us the same thing even more clearly.
In 2006 Sir David Henshaw, in (Recovering child support: routes to responsibility), reported on possible reforms. The legislative result of that report was the Child Maintenance and Other Payments Act 2008, which is slowly being brought into force. Then we saw a green paper, (Strengthening families, promoting parental responsibility: the future of child maintenance), to which many organisations responded, including the Law Society of Scotland which, for some reason, had not been invited to do so.
The Government's response to that consultation was published this July and showed little change from the original green paper. We can fairly confidently predict the general shape of the reforms, though there may still be some useful fighting to do around the edges.
The main features of the reforms are the provision of Gateway to encourage people to make private arrangements, a system of charging fees to applicants and, in some circumstances, to payers of maintenance, linked to a “maintenance direct” preference.
Entering the Gateway
The Government proposes that all applications for child support maintenance should be subject to the test of the Gateway, which will seek to prevent unnecessary applications being made. It is the hope of the Government that those cases which need not proceed to a state based enforceable regime can instead be diverted to some form of private ordering. Accordingly, if a person applying for child support maintenance cannot convince the Gateway team that a private agreement is impossible, then the application will at least in theory be barred at that point.
The Gateway is also supposed to provide, through a privatised provider, advice and guidance to potential applicants. The advice will not only be in relation to child support but in relation to the alternatives too, such as mediation. It is not yet certain how much Scottish legal training will be given to the people employed by Ventura Ltd at Doncaster, who will be charged with applying the Gateway test. The author has recently telephoned that organisation with three questions of child support law. Each question was answered wrongly although with great charm and conviction.
The Government's plan is that the only people who will be excused the Gateway are those who aver that they have been subject to physical violence. The theory is that these people should not have even to answer the question whether or not they should enter into a private arrangement. It is not certain at what level the decision will be taken that a given applicant has genuinely suffered domestic violence. We do not know whether or not it will be taken at face value without any investigation. Experience tells us that the police and courts find it difficult enough to establish with any degree of certainty whether or not an allegation of domestic violence is an honest one. It is difficult to see how a privatised C-MEC operative sitting in Doncaster is going to be able to come to any valuable concluded view without any system of investigation.
The Law Society of Scotland and Resolution have proposed that the Gateway should be kept permanently open, so that those who do not wish to use private ordering for whatever reason should not be compelled to do so. The Government is considering this proposal.
Even if the Gateway is restricted to providing information and signposting, one remains to be convinced that they will have proper training to do the job at all, and particularly to do the job in a Scottish legal context.
The 12 month rule etc
The Government's original proposal said that "Families themselves are best placed to determine what arrangement works best for them", and that a statutory child maintenance system could create "a potential adversarial process that is costly to parents and the taxpayer and can drive a wedge between the parents at the expense of both parents’ and children's wellbeing".
The phrase used in clause 129(2A) of the Welfare Reform Bill is that the Commission may, with a view to reducing the need for applications under ss 4 and 7:
"(a) take such steps as it considers appropriate to encourage the making and keeping of maintenance arrangements, and
(b) before accepting such an application under those sections require the applicant to take reasonable steps to establish whether it is possible or appropriate to make such an agreement".
The Government's intention is clear – to minimise the number of applications with which C-MEC will have to deal. While this may be seen as admirable, it fails to take into account the realities of an adversarial family situation, particularly in the context of the 12 month rule.
The disadvantage of the 12 month rule is well enough known to Scots family lawyers. A written agreement – even a minute of agreement registered in the Books of Council & Session – can be scrapped
The Law Society of Scotland has done its best to persuade the Government either to scrap the 12 month rule altogether, or to extend it to 48 or 60 months. The Government, it would appear, is still thinking about that. It may be reform will be achieved once English law manages to produce an equivalent institution. It seems inequitable that Scottish clients are unable to access such a document and such a facility just because it is not available in another part of the UK.
It appears that Resolution agrees, and it has proposed that England & Wales should have an enforceable maintenance agreement along the lines of our registered minute. We will have to wait and see whether or not the Government is prepared to accept the proposal. If so, I think we can be more optimistic about the abolition or extension of the 12 month rule.
The threat of charges
Part of the intention of the Government's new scheme is that parties will enter into private informal agreements which are not directly enforceable. The green paper is full of encouragement towards mediation, which is all very well, but mediation must exist in a context of enforceability of a solution if the mediation should fail.
It would appear that the drafters of the green paper have envisaged that many people will enter into private informal and enforceable agreements, thereby taking the burden of their work away from C-MEC. I think that that is highly unlikely and I cannot agree that it is any function of Government to try to discourage people from entering into an enforceable agreement in the interests of the children. Informal agreements in relation to other aspects of parenting are of course ideal, but if the Government is to set up a comprehensive system of child support maintenance, as it did in the 1991 Act, then potential users of the scheme should not be put off, especially by the sanction of charges.
It was the intention of the original Child Support Act in 1991 that charges would be levied against those who wished to use the system. It was accepted early on that charges should not be levied at all unless and until the system was shown to be working well, and this of course has never happened. We do not yet know who will have to pay the charges or the level of those charges.
In the Government's golden phrase it says: "Given that the administrative cost of processing an application to the new statutory scheme is expected to be on average £220, we believe it is fair to ask parents to reallocate a proportion of their spending to contribute to the cost of providing this service.”
This, according to the Government's response will "change the culture which has lead to an over reliance in the state system". It occurs to me that one of the most useful changes there has been to child support in recent years has been the benefit disregard, so that parents with care in receipt of income support will be allowed to keep all the child support maintenance collected on top of that state benefit. The imposition of charges will surely be a backward step.
Charges for what?
There is another issue in relation to charges which the Government appears to have missed. It is possible to charge fees in any commercial sector if one provides a service worth paying for. So far, I think, many would agree that C-MEC has failed to reach that standard or even to approach it. If one should have to pay fees then there must be a system whereby these fees can be repaid if the service is not up to scratch. It is at least possible that the cost of administering such repayments will outweigh any financial benefit to the Government from the fees themselves. When this has been put to C-MEC the possibility of repayment has been discounted, but I think that that is where solicitors will have to become involved, alongside MPs.
Is the Government's position cynical when it says: "Most importantly we believe that the introduction of charging… will create a point at which parents have to consider collaboration and that this will enable them to move away from costly adversarial state imposed solutions towards mutually agreed family based arrangements which we believe will deliver better outcomes for children"?
Perhaps. If the NRP were negotiating with the PWC he could force the agreed figure still lower if the PWC knew that she would have to pay a collection charge. It may be easier to justify a charge on the NRP, but only if there were some mechanism for recovering those fees, possibly also with compensation, if the service provided to him were inadequate. The administrative complications involved in all of this are unlikely to end up with a cheaper system from C-MEC's point of view.
The Government says that there will a period of at least six months of live running of the new system before charges are levied. It says that this “will ensure that we can make the case to clients that the new scheme is working well and provides a better service before we start to charge them for using it”.
It is silent as to the criteria which will be applied for deciding whether or not the scheme is better, and for whom.
The CMOPA reforms
The 2008 Act embodies some changes which have been delayed but which seem likely to be brought in around the end of next year in respect of new cases. The intention had been to introduce the changes in April 2012, but that seems to have slipped. The change which we will have to get used to quickly is the new set of percentages to be applied in the calculation of maintenance.
If the NRP has gross income of up to £800 per week, the percentages will be:
- 12% for one qualifying child,
- 16% for two qualifying children, and
- 19% for three or more.
If his income is more than £800 per week, then the first £800 per week will be calculated as above, then the slice of his income which exceeds that threshold will be subject instead to:
- 9% for one qualifying child,
- 12% for two qualifying children, and
- 15% for three or more.
If the NRP has relevant other children, then his whole gross income for calculation purposes will be reduced in accordance with the first set of percentages, even if his earnings are more than £800 per week gross.
All existing CSA cases will be closed in tranches over a two-year period. Parents will be advised about the Gateway process so that they may decide whether or not to register under the new scheme, or negotiate a private agreement instead. There will be consultation about the detail of the process of closure and about the order in which cases will be selected for closure. The extent to which the Government has heeded the responses to consultation so far cannot make us optimistic that the process will be handled with a view to the clients' best interests, as opposed to administrative convenience.
Those of us who choose to practise in this sphere – and our clients – are in for an interesting future.
If you would like to discuss any of the issues raised in this article please contact John Fotheringham, Director in the Family Law Team.
This article was published in the Novmeber 2011 Family Law Association Bulletin.
