Child Support And Work Incentives

"In February 2006 Sir David Henshaw was asked to lead a redesign of the child support system. A key recommendation of the review was that child maintenance should be disregarded up to a high threshold in calculating Income Support (IS), and that child support should be disregarded entirely in calculating Housing Benefit (HB) and Council Tax Benefit (CTB). In the White Paper 'A new system of child maintenance' published in December 2006, it was announced that the Government will significantly increase the amount of maintenance that parents with care on benefit can keep before it affects the level of benefit they receive. The Department for Work and Pensions (DWP) commissioned Frontier Economics to carry out a short review of the economic literature examining whether increasing the amount of maintenance that parents with care (PWCs) on benefit can keep will affect their decision to work and subsequently have an impact on employment rates."--P. 1.

"The primary objective of this project has been to estimate the effect of a £10 a week child support (CS) disregard (known as the Child Maintenance Premium), that was introduced into the Income Support (IS) system in 2003, on the labour market participation rate of parents-with-care (PWCs), more than 90 per cent of whom are lone mothers. The secondary objective is to use the resulting estimated statistical model to investigate the likely effects of making the £10 a week disregard larger ? a change recently proposed by Sir David Henshaw in his recent review of the existing CS arrangements."--P. 1.

The Committee's report examines the Government's proposals to reform the child support system, as set out in the White Paper "A new system of child maintenance" (Cm. 6979, ISBN 9780101697927) published in December 2006, and following on from the report by Sir David Henshaw (Cm. 6894, ISBN 9780101689427) published in July 2006. The Committee welcomes the Government's reform proposals, including the eventual replacement of the Child Support Agency by a new body (Child Maintenance and Enforcement Commission (C-MEC)) in 2008 and the fundamental shift proposed towards maintenance agreements privately agreed between parents. However, concerns are raised over the lack of detail for proper scrutiny of how the new system will work, particularly in relation to the provision of advice and guidance services. The report also highlights a number of inherent contradictions between the principles and practicalities of the proposals, for example how the reforms will impact on child poverty targets in relation to parents on welfare benefits, as well as regarding the transition arrangements for the transfer of existing cases onto the new scheme run by C-MEC. Concerns are also raised that whatever the merit of joint birth registration, tagging this highly sensitive matter onto child maintenance legislation will have wider ramifications for the family law system.

This document sets out the Government's response to the report by the Work and Pensions Select Committee (HCP 219-I, session 2006-07; ISBN 9780215033109) on the Government's White Paper 'A new system of child maintenance' (Cm. 6979, ISBN 9780101697927) which was published in December 2006. An accompanying document (Cm. 7061, ISBN 9780101706124) which considers key issues that have been raised in response to the Government's White Paper, is available separately.

This document considers key issues that have been raised in response to the Government's White Paper, 'A new system of child maintenance' (Cm. 6979, ISBN 9780101697927) which was published in December 2006. The White Paper was based on the recommendations made by Sir David Henshaw in his report "Recovering child support: routes to responsibility" (Cm. 6984, ISBN 010168942X).