We will be carrying out detailed work in order to work out how best to measure the success of the redesigned child maintenance system against the objectives detailed in the White Paper; “A new system of child maintenance”.
We will use the Family Resources Survey to assess the poverty status of parents with care. Poverty is defined here as living in a household which has income below 60 per cent. of equivalised median income before housing costs; this is the internationally recognised threshold of low income.
Non-resident parents cannot currently be identified directly on the Family Resources Survey so we will carefully consider how the proposed system of simplifying and improving the child maintenance assessment process will impact upon them.
The Child Maintenance and Enforcement Commission will replace the Child Support Agency when it is established and the funding of the costs of establishing and running the new organisation will be a matter for departmental planning in the usual manner. The combined effect of the reforms is, however, expected to lead to a dramatically reduced inflow of new cases. That will in turn lead to a reduced need for investment from taxpayers’ resources but the resources needed to provide a high-quality service will be available.
Under the current new child support scheme, any change in income of 5 per cent. will give rise to a recalculation in the liability for child support maintenance. This has led to the Child Support Agency facing a substantial workload of such reported changes. Therefore, as part of the redesign, it was decided that this threshold of 5 per cent. needed to be substantially increased. The issue was what the new figure should be.
Two main factors affect that decision, but they push in opposite directions. The first is the need to avoid too many recalculations of liability at the outset of an application as these slow up the progress of cases from application to first payment, which argues for the figure to be high.
The second is the need to be fair to the parties, not making the figure either too high or too low, compared to current income which argues for the figure to be low. Using plus or minus 25 per cent. in the Government’s view takes appropriate account of both these factors.