Regular readers of this blog may recall that there is already (at least) one private members’ bill relating to child maintenance making its (slow) progress through parliament. As explained here, Heidi Allen MP’s Child Maintenance (Assessment of Parents’ Income) Bill 2017-19 aims to target those non-resident parents (‘NRP’s) who seek to evade their child maintenance liability by hiding behind self-employed status.
Last week another private members’ bill relating to child maintenance had its first reading on the House of Commons. Sponsored by Marion Fellows, Scottish Nationalist MP for Motherwell and Wishaw, the Child Maintenance Bill 2017-19 aims “to remove certain fees for child maintenance services; to make provision about the calculation of child maintenance payments; and for connected purposes.”
Unfortunately, the text of the Bill has not yet been published but in the first reading debate Ms Fellows explained exactly what the Bill sets out to do:
“There are four specific ways in which the CMS [Child maintenance service] could be improved in order to fulfil its intended purpose, and the aim of my Bill is to enact them. The 4% maintenance levy on parents requiring the collect-and-pay service should be abolished, as should the £20 application fee. There should be a reduction from 25% to 10% in the change-in-income threshold that must be breached for maintenance payments to be recalculated. Finally, the value of any equity in the non-resident parent’s primary residence should be included in maintenance calculations when it exceeds £500,000.”
Let us look at each of these four points.
I will deal with the first two together, as they are obviously connected.
When the current child incarnation of the child maintenance system was set up it attracted widespread criticism for the fees involved, which were seen by many not so much as an incentive to parents to agree child maintenance arrangements (as was the government’s intention), but rather a tax upon those parents with care (‘PWCs’) who were not able to agree, as the NRP would not cooperate. As Ms Fellows said:
“The maintenance levy is not a tax on parents; it is a tax on children. It takes food from their table, clothes from their back, and money from their pockets that would allow them to enjoy the upbringing that every child should have.”
She went on:
“…the collection of 4% charges is a pittance to the UK Government, but it could make a massive difference to children’s lives.
“Likewise, the £20 application fee takes more money from families. It is most likely to be a parent with care who starts an application with the CMS because they have not been able to reach an agreement with their ex-partner. Again, they are being penalised for needing help in securing for their children the support they have a right to.”
I can’t argue with that.
Moving on to the third point, Ms Fellows explains that the Bill is not just about PWCs. The change-in-income threshold is unfair to NRPs (as well as PWCs):
“A paying parent can amend their income, and therefore their calculations, only if their income changes by more than 25%. That is a huge threshold to meet. It can disproportionately affect parents on low incomes if their income decreases, while disproportionately benefiting those on higher incomes.”
She went on to describe a case in which a constituent of hers had a low income that decreased by 24.9% exactly, leaving him struggling to make ends meet. She considers that a 10% threshold “would ensure that maintenance payments more accurately reflected what a parent earned”. I agree, but of course the problem is that this could impose a huge additional burden upon the CMS, having to make far more re-calculations than at present.
Lastly there is perhaps the most interesting provision of the Bill. Ms Fellows explains:
“A £500,000 threshold will ensure that those who live in smaller homes do not face unreasonable additions to maintenance that may require them to sell their home. Only those who live in more expensive homes who can afford to pay will pay. The Conservative Government make a big deal about personal responsibility and families being self-reliant; now is their opportunity to show that they mean it with action, and to ensure that parents meet their responsibilities to their children.”
An attractive idea, reminiscent of the issue of NRPs who avoid liability by ‘converting’ their income into capital (child maintenance is generally calculated by reference to income). Certainly, it seems wrong that an NRP with a huge equity in their home should pay little or no child maintenance, and I think that this is therefore an idea that merits further consideration.
Both this Bill and Heidi Allen’s Bill are due for a second reading on the 23rd of November.