Transitional Arrangements & Other Matters: Child Support 2012
As part of the spending cuts, as implemented by the Coalition Government, the Child Maintenance and Enforcement Commission was, without any particular interest or attention, abolished on 9 August 2012.
In essence, the functions of the Commission simply transfer back to the Secretary of State who will then exercise those functions via his delivery arms, namely the Child Support Agency and the Child Maintenance Option Service. This, ironically, reverts back to the pre 2008 position when the DWP, and the Agency, had control of and administered the system (although the Options Service was not in existence in those days).
The abolition of the Commission is, perhaps, a red herring in that this will have little or no impact on the way in which the child support system is operated.
What is of note though is that C-MEC, as a non departmental public body, was heralded in the White Paper of December 2006 (“A new system of child maintenance”) as being the most appropriate model to deliver child support. As such, it would have sufficient flexibility and independence so as to enable it to make a break from the considerable problems of the past, and succeed where the Agency failed. One of the principal reasons for the abolition appears to be that it will be more cost effective for the child support functions of the system to be fulfilled by the Secretary of State.
The contrast between the arrival of C-MEC and its departure could not be more stark!
It should be remembered, though, that the appearance of C-MEC in 2008 was largely a “rebranding” process. The Agency and C-MEC are, in reality, much of the same (ie operated by the same staff in the same buildings etc). It was never the case that there were two different and distinct organisations.
And just to add to the smoke and mirrors effect, the child support system is permitted to continue to send letters out on the headed notepaper of the Commission!
Child Maintenance Service
This term is now being used and is a reference to the statutory scheme as a whole and the new Gross Income scheme in particular.
In various of the documents which have been produced by the Department for Work and Pensions over the last six months it is stated that the new Gross Income scheme will be opened in October 2012. As at the time of writing there is no sign of the opening of the new scheme and a recent missive from the DWP suggests that the scheme will now be opened in “late 2012”.
Notwithstanding the earlier statements, there may be some logic behind the current uncertainty in that the DWP will, understandably, be very keen to ensure that the scheme is not open until the supporting computer programs, which have a link to HMRC, are up and effectively running. It must be remembered that it was, originally, intended that old scheme cases would, in 2003 and onwards, transfer into the then new scheme (which we now call the “current scheme”) but this proved to be highly problematic, with attempts to transfer being, eventually, abandoned. Clearly every effort will be made, at the current time, to prevent such a debacle being repeated.
When the new scheme is opened then there will be a strict admission criteria so as to reduce the number of new applicants entering. In the first instance, it is anticipated that the parent with care (PWC) must have four or more qualifying children, all from the same non-resident parent (NRP), in order to apply. This criteria will, of course, ensure a low volume of new cases. When the system, with these limited cases, is proven to be working well then the criteria will be relaxed such that PWCs with two or more qualifying children will be admitted. In due course, possibly in late 2013, the new scheme will be open to all new applicants.
In the meantime, a new applicant, who does not fulfil the relevant criteria, will simply be slotted into the current scheme with their case being dealt with pursuant to the rules, and formula, that have been used since 2003.
There are, approximately, 1.1 million existing cases already in the statutory system, both in the current scheme (i.e. those cases entered after 2003) and in the old scheme (i.e. those cases entered between 1993 – 2003).
After the new scheme is opened to new applicants (possibly in late 2013) the first wave of existing scheme cases will be given six months notice that their case will be closed. It is anticipated that the oldest cases in the system will be given notice of closure first and, on this basis, the migration will be run on the principle of “first in first out”. Those cases will then have this period of time to decide whether to enter into a family based arrangement (FBA) or to make a new application to the new Gross Income scheme. If they chose the latter then they will have to pass through the gateway and pay the necessary fees.
Importantly, if they take no action then their application for child support will be deemed to have been withdrawn and their case will be closed. They will be able to reapply but may, we anticipate, have to wait a period of time (13 weeks) before being able to do so, with the PWC missing out of the opportunity to receive child support during this period.
Furthermore, those cases that are handled clerically (i.e. by the staff of the Agency; as opposed to the computer system) will be given early notice of closure at the outset of the commencement of the case closure process.
On the basis of the above, it is not the case that the existing cases will “transfer” seamlessly in to the new scheme. They will have to follow the route that must be taken by new applicants. There is no option for existing cases to remain in the current and old schemes. The intention is that by 2016 / 2017 both the current, and old, schemes will have been emptied and closed.
An existing case cannot elect to apply to the new scheme early; they must wait their turn and until they are given notice of closure. Even if they make a successful application at the outset of the notice period, they will still have to wait the remaining notice period for the new liability to commence. It is anticipated that the case closure period / process will take 3 years to complete. For some, therefore, there could be a long wait.
It may, potentially, be possible for an existing case to “queue barge” by withdrawing their application for child support, waiting the requisite 13 weeks to circumvent the linking rules, and then applying as a new applicant. This may be preferable, for some, notwithstanding the loss of child support. Clearly, where a PWC knows that they will obtain a higher award in the new scheme then it may be worth their while taking this step.
It is not clear, at present, whether a well informed NRP will be able to stymie this tactic by making an application for child support themselves within the 13 week period and, in doing so, be able to force the case back into the current scheme. This may be possible. However, we understand that it is specifically proposed that a NRP will be prevented from doing so where the case is excluded from the case closure process by virtue of the child reaching the upper age limit for child support, during the case closure period, and the case concluding naturally.
It must be remembered though that the new formula in the Gross Income scheme has been devised in such a way so as to attempt to smooth out any bumps in the liability in the event that a migration is made. It is not intended, therefore, that NRPs in the new scheme should pay more, or less, than in the current scheme.
Conversion (or “reactive case closure” as now described)
What happens if an application to the new Gross Income scheme names a NRP who is already a NRP in an existing case? The general rule is that all of the child support liabilities of a NRP should be dealt with by the same scheme. Therefore, in these circumstances, an application to the new scheme will force the transfer of an existing case in the current or old scheme to the new scheme.
Any arrears of child support will be unaffected by a migration from an existing scheme to the new scheme.
There will be further updating articles on this website about this subject in due course.
Stop Press : The Gross Income scheme opened on 10 December 2012
Reviewed in 2015