08 June 2007
Ministers were this week accused of trying to sneak 'through the back door' a controversial decision over their child maintenance reforms after omitting it from a new Bill.
Work and Pensions Secretary John Hutton has delayed a decision over the amount of maintenance income paid to parents with care responsibilities that can be disregarded before it counts against future benefit claims.
Experts said the omission could compromise the chances of the government getting back on track to achieve its interim target of halving child poverty by 2010.
There was no mention of an increase in the Child Maintenance and Other Payments Bill, published on June 6.
Yet Sir David Henshaw's review of child maintenance, the catalyst for this week's Bill, recommended that all maintenance income should be disregarded for benefit purposes. Such a provision, which would cost around £230m in reduced benefit clawback, would at a stroke lift around 90,000 extra children out of poverty.
A £50 weekly disregard would cost £170m and lift around 60,000 children above poverty thresholds.
Hutton recently extended the current £10 disregard to include more claimants, many of whom are single parents, but promised a 'significant increase' in the level to be discounted from 2011.
Kate Stanley, head of social policy at the Institute for Public Policy Research, said the omission of a new figure and the failure to implement it sooner was a 'missed opportunity'.
'As this Bill goes through Parliament it should be amended to allow lone parents to keep child support payments over £10 a week,' Stanley said.
The pressure group One Parent Families, which supports a full maintenance disregard, also urged Hutton to bring forward the introduction of the higher rate to 2008.
OPF policy adviser Kate Bell told Public Finance: 'Lifting children out of poverty through the maintenance disregard is cheaper than doing it through the tax credits system, which already disregards maintenance payments.'
The Joseph Rowntree Foundation estimates that the cost per child lifted out of poverty through tax credits is around £4,300, while using the maintenance disregard costs between £2,500 to £3,500.
A Department for Work and Pensions spokeswoman told PF that there was no obligation to include the level of the disregard in the new Bill. 'The secretary of state has provisions to set whatever level he likes, when he likes,' she said.
Opposition MPs accused Hutton of omitting the new figure because a significant hike could become controversial: it would improve incomes for parents on benefits but not for other households receiving child maintenance.
David Laws, Liberal Democrat work and pensions spokesman, told Public Finance: 'The government knows that the level at which the earnings disregard for child support is set will be highly controversial. Excluding it from the Bill to kill the debate only to try to sneak the details out later is entirely unacceptable. The government has seen fit to produce a Bill which is only half finished.'
Other welfare experts said Hutton could include a higher disregard when the Bill reaches the House of Lords, in order to prevent heavy flak from MPs.
Hutton's new Bill will abolish the troubled Child Support Agency – which currently has a £3.5bn backlog of payments – and replace it with the streamlined Child Maintenance and Enforcement Commission.
C-Mec will receive new powers to chase parents who refuse to pay maintenance by allowing access to bank accounts, the withdrawal of passports and the imposition of curfews. To reduce costs to taxpayers, absent parents will also be charged the cost of C-Mec's detection.
Hutton said: 'There are a small number of parents who seem to think that paying for their kids is something they can choose not to do. It isn't. These new powers… would bring real and lasting punishments.'
But Laws said that the government's oversight of the CSA had been a 'shambles'. Laws also attacked as a 'worthless gimmick' Hutton's plan to name and shame absent parents.
Hutton also plans to reduce demand on C-Mec by encouraging parents to settle maintenance privately.
But Kate Green, chief executive of the Child Poverty Action Group, warned: 'Access to free independent advice services is needed, particularly so that resident parents are not pressured into settling for less.'
PFjun2007
