Child Maintenance Act (Northern Ireland) 2008

	Explanatory Notes to Child Maintenance Act (Northern Ireland) 2008 2008 Chapter 10

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These Notes refer to the Child Maintenance Act (Northern Ireland) 2008 (c. 10) which received Royal Assent 2July 2008 CHILD MAINTENANCE ACT (NORTHERN IRELAND) 2008 ________________ EXPLANATORY NOTES INTRODUCTION 1. These explanatory notes relate to the Child Maintenance Act (Northern Ireland) 2008 which received Royal Assent on 2 July 2008. They have been prepared by the Department for Social Development in order to assist the reader in understanding the Act. They do not form part of the Act and have not been endorsed by the Assembly. 2. The notes need to be read in conjunction with the Act. They do not, and are not meant to be, a comprehensive description of the Act. So where a section or part of a section or Schedule does not seem to require an explanation or comment, none is given. BACKGROUND AND POLICY OBJECTIVES 3. This Act makes provision for Northern Ireland corresponding to provision contained in the Child Maintenance and Other Payments Act 2008 (c.6). 4. Part 1 of the Act makes provision for the Department to have responsibility for raising awareness among parents of the importance of taking responsibility for the maintenance of their children and making appropriate arrangements for the maintenance of children of theirs who live apart from them. The Department will have more flexibility to commission external providers to carry out its child support functions in order to deliver services in the most efficient and effective way. 5. Part 2 of the Act makes provision for: removing the power that parents with care who make a claim for benefit are to be treated as making an application for child support maintenance and with it the power to reduce the amount of benefit parents with care receive if they choose to opt out of the scheme without good cause for doing so; changes to maintenance calculations. This includes a move from using net to using gross weekly income to determine maintenance liability. Gross weekly income details will be based on information held by Revenue and Customs. As gross weekly income is higher than net income the percentage rates will be reduced and there will be an increase in flat rate maintenance. Annual reviews would take place to ensure that the calculation reflects any changes in income or circumstances and the income figure for the latest available tax year would be updated; a deduction from earnings order to be the initial method of collection unless there is good reason not to in a particular case; a regular deduction order to be applied to an account held by the non-resident parent with a deposit-taker such as a bank, which can be used to collect arrears of child maintenance; a lump sum deduction order to be applied to an account held by the non-resident parent with a deposit-taker, which would be used to collect arrears of child maintenance; liability orders to be administrative and would no longer require an application to the court; disqualifying a non-resident parent from holding a travel authorisation, which may be a UK passport and/or an ID card issued under the Identity Cards Act 2006; applying to the court for a curfew order to made against a non-resident parent who fails to pay maintenance; negotiating settlements where a lesser amount of money offered by a non-resident parent can be accepted as full and final settlement of a child maintenance debt; the ability to write off debt in specified circumstances; the recovery of child maintenance arrears from the estate of a deceased non-resident parent; to enable the disclosure of information relating to certain family proceedings to be given to the Department in relation to child support functions without the risk of the relevant parties being found in contempt of court; the Department to disclose certain information relating to non-resident parents to credit reference agencies for the purpose of providing information relevant to the financial standing of individuals; and information sharing gateways between the Departments for Social Development, and Employment and Learning and Revenue and Customs. CONSULTATION 6. Sir David Henhsaw's report 'Recovering child support: routes to responsibility' was published in July 2006 together with the Government's response 'A fresh start: child support redesign - the Government's response to Sir David Henshaw'. This was followed by a further consultation period in December 2006 when more detailed policy proposals were published in the White Paper "A new system of child maintenance". A summary of the responses to the consultation was published in May 2007. OPTIONS CONSIDERED 7. Full details of all of the options considered are detailed in the Regulatory Impact Assessment for the Act (see paragraphs 18 to 26). OVERVIEW 8. The Act contains 42 Sections and 5 Schedules: Part 1 - Additional functions of the Department Part 2 - Child Support etc. Removal of compulsion for benefit claimants Maintenance calculations Collection and enforcement Debt management powers Miscellaneous Part 3 - General COMMENTARY ON SECTIONS Part 1: Additional functions of the Department Section 1: Promotion of child maintenance This section places a duty on the Department to take such steps as it considers appropriate to raise awareness among parents of the importance of taking responsibility for the maintenance of their children and if they live apart, making appropriate maintenance arrangements. Section 2: Provision of information and guidance Section 2 places a duty on the Department to provide relevant information and guidance to help establish effective and appropriate maintenance arrangements for children who live apart from one or both of their parents. The section also enables the Department to provide information for other purposes in the course of providing such information and guidance which might include, for example, information on other matters relating to parental separation such as housing or employment. Section 3: Fees Section 3 gives regulation-making powers to the Department to enable it to charge fees in connection with the exercise of its functions relating to child support. Subsection (2) of the section gives a non-exhaustive list of provisions that may be included in regulations. This includes: when a fee may be charged; the amount of fee to be charged; the information required to determine the amount to be charged; who is liable to pay any fee charged; when a fee is payable; recovery of fees charged; and when a fee may be waived, reduced or repaid. Subsection (3) provides that the regulations may permit the Department to charge fees which are not related to the cost to it of carrying out its functions. Subsection (4) allows the Department to provide by regulations that the collection and enforcement measures in the Child Support (Northern Ireland) Order 1991 also apply to fees payable. Subsection (5) provides that the Department may by regulations make provision for a person affected by a decision under regulations under subsection (1) to have a right of appeal against the decision to an appeal tribunal. Subsection (6) provides that paragraphs (3) to (5), (7) and (8) of Article 22 of the Child Support (Northern Ireland) Order 1991 (appeals to appeal tribunals) will also apply to appeals against a decision of the Department concerning fees. Section 4: Agency arrangements and provision of services This section enables the Department to make arrangements with another Government Department or prescribed body (defined as a "relevant authority" in subsection (4), for the functions of one of them to be exercised on their behalf by the other, or for one to provide administrative, professional or technical services to the other. Subsection (2) makes clear that this does not include functions in relation to making, confirming or approving secondary legislation. Subsection (3) enables the Department to agree the terms and conditions that it considers appropriate for any arrangements under this section. Subsection (5) clarifies that the functions of the Department which are referred to in the section, are those specifically relating to child support. Section 5: Contracting out This section enables the Department to contract out any of its functions to another person or organisation. In doing so, the Department can authorise the extent to which the function is carried out, and the period of time the contract should last. Contracting out a function does not prevent the Department from exercising it. Where a contractor is carrying out a function on behalf of the Department, subsection (4) ensures that its acts or omissions will be treated as acts or omissions of the Department and the Department will be responsible. Subsection (5) sets out two exceptions to this: A contractor's act or omission will not be treated as being an act of the Department if it is relating to the contract between the Department and the contractor itself. This ensures that, for example, if a contractor breaches the contract by failing to do something, or doing something they should not, the contractor remains responsible and the Department will be able to sue for breach of contract. The contractor will remain liable if it commits a criminal act. Subsection (6) ensures that a person who is authorised to carry out a function on behalf of the Department has a right to claim damages or compensation for repudiation of the contract if the Department withdraws its authorisation, thereby making it impossible for the contractor to perform. Section 6: Supplementary provisions Section 6 sets out the definition of "child" for the purposes of Part 1 (the same as for the Order) and makes provision for the Department to make regulations about when children are to be regarded as living apart from a parent or not, to ensure, for example, that children are not regarded as living apart from a parent simply because they are at boarding school. It also defines the Department's "functions relating to child support". Part 2 - Child Support etc. Removal of compulsion for benefit claimants Section 7: Repeal of Articles 9 and 43 Section 7 repeals Articles 9 and 43 of the Child Support (Northern Ireland) Order 1991. Article 9 of the Child Support (Northern Ireland) Order 1991 provides that parents with care who make a claim for, or are in receipt of, prescribed benefits, may be treated as making an application for child support maintenance. Paragraph (a) of section 7 removes this power. Article 43 of the Child Support (Northern Ireland) Order 1991 gives power to the Department to reduce the amount of benefit parents with care receive where they are treated as having applied for a maintenance calculation under Article 9 of the Child Support (Northern Ireland) Order 1991, and they choose to opt out of the scheme without good cause for doing so. Paragraph (b) of section 7 removes this power, which will become redundant when Article 9 is repealed. Maintenance calculations Section 8: Changes to the calculation of maintenance This section introduces Schedule 1 which amends legislation regarding how maintenance calculations are performed. Changes to how maintenance is calculated include: A move from using net to using gross weekly income to determine maintenance liability. Information required to calculate maintenance will be taken directly from Revenue and Customs instead of the non-resident parent. Changes to the percentages used to calculate basic rate maintenance. Treating certain existing child maintenance obligations which fall outside of the statutory scheme, as though they were within the scheme, for the purposes of calculating liability. An increase in flat rate maintenance from £5 to £7 per week. Section 9: Power to regulate supersession This section replaces Articles 19(2) and 19(3) of the Child Support (Northern Ireland) Order 1991. Article 19 allows a maintenance decision to be superseded by a new decision, where, for example, there has been a change of circumstances. These changes provide a regulation-making power to the Department in relation to the supersession of decisions. New paragraph (3) sets out that regulations may include: Provision about the cases and circumstances in which a decision may be superseded, which may include a restriction on superseding a decision as a result of certain changes of circumstance. This change enables the introduction of fixed term annual awards, where a change in circumstance will only be actioned during the year if there has been a large change in income, or where the change is fundamental to the maintenance calculation. This will also enable regulations to contain provisions which set out the circumstances in which earlier changes of circumstances (which had not led to a supersession) can be taken into account. Procedural aspects of supersessions. Section 10: Determination of applications for a variation This section introduces two new paragraphs, (2A) and (2B), to Article 28D of the Child Support (Northern Ireland) Order 1991. Presently, either the parent with care or the non-resident parent may apply to the Department for a variation of maintenance. However, the Department may not necessarily proceed to make further enquiries to examine the circumstances surrounding the application. The new paragraphs will place a duty on the Department to carry out investigations where, on an application by the parent with care, it is clear that further enquiries would help the Department to decide if a variation should be given. Section 11: Transfer of cases to new rules This section introduces Schedule 2 which makes provision for the movement of existing cases onto the new calculation rules. The Department may require the parties in existing cases to choose whether to remain in the statutory scheme under the new calculation rules or to leave the scheme as far as future liability is concerned. Collection and enforcement Section 12: Use of deduction from earnings orders as basic method of payment Section 12 concerns Article 29 of the Child Support (Northern Ireland) Order 1991, which sets out provisions for the collection of child support maintenance. Paragraph (3)(b) of Article 29 provides the Department with the power to make regulations as to the method by which payments of child support maintenance should be made. This section inserts new paragraphs (4) and (5) into Article 29 of the Order to make it clear that such regulations can include deduction from earnings orders as an initial method of collection. The intention is to pilot the use of deduction from earnings orders as a primary method of collection for employed non-resident parents. New paragraph (4) requires that any regulations which allow deduction from earnings orders to be used as an initial method of collection also include provision that this method should not be used where there is good reason not to use it. The regulations must also include a right of appeal to a court of summary jurisdiction against a decision that there is no good reason not to use a deduction from earnings order to collect maintenance. New paragraph (5) prevents a court of summary jurisdiction, on an appeal made under regulations under paragraph (4), from questioning the maintenance calculation by reference to which the deduction from earnings order was made. New paragraph (6) provides that regulations may include provision with respect to the period within which an appeal must be made and the powers of the court of summary jurisdiction in relation to such an appeal. New paragraph (7) enables regulations to set out what matters should be considered (or not considered) in determining whether there is a good reason not to use a deduction from earnings order as an initial method to collect maintenance. For example, the regulations could provide that there would be a good reason not to use a deduction from earnings order if doing so could compromise the employment status of a non-resident parent, or raise privacy issues. It also enables regulations to prescribe circumstances in which a good reason not to use a deduction from earnings order does, or does not, exist. Section 13: Deduction from earnings orders: the liable person's earnings This section replaces paragraph (8) of Article 31 of the Order, and inserts a new paragraph (9). The intent of the change is to define what will be considered as 'earnings' for the purpose of deduction from earnings orders. Article 31 of the Order concerns deduction from earnings orders, and the existing paragraph (8) provides that 'earnings' has such meaning as may be prescribed. The definition in the new paragraph (8) will include the following as earnings: wages or salary; payments by way of pensions including any annuity payable for the purpose of providing a pension; periodical payments which are compensation for loss of employment or reduced remuneration; and statutory sick pay. The impact of this change is that all pension payments, whether as a result of a private or occupational pension scheme, will be included as earnings for the purposes of deduction from earnings orders. The new paragraph (9) sets out that for the purposes of Articles 31 and 32 of the Child Support (Northern Ireland) Order 1991, any person paying a sum covered by new paragraph (8) to a liable person should be treated as their 'employer'. Section 14: Orders for regular deductions from accounts This section inserts new Articles 32A, 32B, 32C and 32D which relate to orders for regular deductions from accounts, into the Child Support (Northern Ireland) Order 1991. Article 32A enables the Department to make an order to collect regular deductions of maintenance from an account held by a non-resident parent with a deposit-taker, where the non-resident parent has failed to pay child support maintenance. Paragraph (2) of Article 32A sets out that both arrears and maintenance payments which will become due under the calculation in place can be collected through deduction orders. Paragraph (3) allows a deduction order to be made on an account even where there is an ongoing appeal against the maintenance calculation. This can only happen, however, in cases where the Department concludes that the outcome of the outstanding appeal will not affect the amount of the liability covered by the order or, if the outcome of the appeal would have such an effect, the Department still considers making the order to be fair in all of the circumstances. Paragraph (4) prevents a deduction order being made against certain accounts, such as joint accounts. However, if it becomes clear that non-resident parents are moving monies into joint accounts to avoid their responsibilities, the Department may close this loop-hole by making regulations to include such accounts as accounts upon which deduction orders can be made. Paragraphs (5), (6) and (7) set out that the order will specify which account it is made against and the date it has effect. The order will operate as an instruction to the deposit-taker to make deductions from the specified account and pay them to the Department. Copies of the order shall be served on the deposit-taker, the non-resident parent against whom it is made, and, if the order is in respect of a joint account, the other account holders. Paragraph (8) provides that the deposit-taker is under a duty to comply with the order for regular deductions from accounts. However, it also protects the deposit-taker from any liability if they do not comply with the order during the seven day period beginning with the day the order is served on them. Paragraph (9) provides, for the avoidance of doubt, that where regulations have been made under Article 29(3)(a) of the Order, the person liable to pay child support maintenance (the non-resident parent) is taken to have failed to pay if they have not paid it to, or through, the person specified in, or by virtue of, the regulations. Article 32B provides that in the case of a deduction order against a joint account, the Department shall offer each account holder the opportunity to make representations about the proposal to make the order, and the amounts to be deducted under the order. The Department shall take account of such representations, and the amounts being contributed to the account by each account holder, before deciding what amount would be a fair deduction in the circumstances. Article 32C provides regulation-making powers to the Department with regard to the practicalities and procedure relating to account deduction orders. The following subsections give examples of provision that may be made by the regulations. Paragraphs (2)(a) to (2)(c) of Article 32C - the regulations may require that the order specifies the amount in respect of which it is made, the amounts to be deducted in order to meet liabilities, and the dates deductions are to be made. Paragraph (2)(d) - the regulations may limit the rate of deduction under a deduction order. It is envisaged that an order will be limited to an amount which is a percentage of the non-resident parent's income. If the circumstances of a non-resident parent change it will be their responsibility to inform the Department so that the amount in the order might be changed and the deposit-taker notified. Only amounts in credit will be deducted from an account. Paragraph (2)(e) - the regulations may allow for certain circumstances when amounts of money held in an account should be disregarded in respect of the deduction order. This could be if the money is being held on behalf of another person, for instance. Paragraph (2)(f) - the regulations may include provision concerning the payment of money deducted by a deposit-taker to the Department. Paragraph (2)(g) - the regulations may allow the deposit-taker to deduct an amount from the non-resident parent's account towards its administrative costs. Paragraph (2)(h) - the regulations may provide for notifications to be given to a non-resident parent against whom the deduction order is made regarding amounts deducted and paid under the order. Paragraph (2)(i) - the regulations may require the deposit-taker to notify the Department, within a specified period of time, if the account specified in the order does not exist, or if the non-resident parent who is the subject of the order has any other accounts. Paragraph (2)(j) - the regulations may require the deposit-taker to notify the Department, within a specified period of time, if a non-resident parent subject to a deduction order closes the account specified in the order, or opens a new account. Paragraph (2)(k) - the regulations may allow the deposit-taker, the person against whom the order is made and (in the case or an order made in respect of a joint account) the other account holders, to apply to the Department for a deduction order to be reviewed, in certain circumstances, and may provide for how the Department is to carry out such a review. Paragraph (2)(l) - the regulations may allow the Department to vary an order. Regulations will prescribe the circumstances when this might occur, for example, as a result of a review, or if some of the arrears have been settled. Paragraph (2)(m) - the regulations may provide powers similar to those in Article 32A(8) in relation to the variation of an order, whereby although the deposit-taker has a duty to comply with the order as varied, they will not be liable for non-compliance during the first seven days from being given notice of the variation. Paragraph (2)(n) - the regulations may provide that an order will lapse in prescribed circumstances. This might include, for example, provisions that an order will lapse if the non-resident parent no longer holds an account with the deposit-taker to whom the order was directed. Paragraph (2)(o) - the regulations may provide for an order to be revived in certain circumstances. This could be where it has lapsed because the non-resident parent has agreed to make payments but then defaults on those payments. Paragraph (2)(p) - the regulations may make provision allowing or requiring an order to be discharged. Paragraph (2)(q) - the regulations may require the Department to give notice to the deposit-taker in the case of an order lapsing or ceasing to have effect. Paragraph (3) provides regulation-making powers to the Department with regard to the priority of an account deduction order and: any other order in place; and any other type of order which makes deductions from the same account. Paragraphs (4), (5) and (6) allow the Department to provide by regulations that any person affected should have a right of appeal to a court against a deduction order, or against any decision made by the Department following an application for a review of the order. On such an appeal, the court is prevented from questioning the maintenance calculation by reference to which the deduction order was made. Regulations may include provision with respect to the period within which an appeal must be made and the powers of the court in relation to any such appeal. Article 32D sets out that it will be an offence for a person not to comply with the requirements of an account deduction order or any designated regulation under Article 32C. A person found guilty of such an offence may be liable for a fine. However there is a defence if the person can show that all reasonable steps were taken to comply with the order or regulation.




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