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Entries in welfare reform (2)

Tuesday
Apr022013

Universal credit not treated as income in child maintenance calculation

Scottish Labour MP Cathy Jamieson's asked a question in the Commons about what the child maintenance liabilities will be of a single, unemployed, non-resident parent who becomes a non-resident parent while in receipt of universal credit.

The Minister for Pensions, Steve Webb, confirmed that the universal credit award is not treated as income for child maintenance purposes.

A non-resident parent on universal credit and not earning; for example, because they are unemployed, may be liable to pay the flat rate of maintenance.

Thursday
Mar012012

Audit Office criticises child support changes

On the day that the Welfare Reform Bill finished its passage through the Westminster Parliament, a critical report from the National Audit office raised  doubts on whether the Child Maintenance Enforcement Commission can manage to make planned savings.

These planned cost reductions rely heavily on the introduction of a new child maintenance scheme and associated IT system, including changes made within the Welfare Reform Bill, such as charges to parents using the service. The report points out that IT costs have increased and the Commission risks repeating some of the mistakes made on the earlier child maintenance schemes.

There is already a £44 million shortfall in the £161 million reduction originally expected by 2014-15. The Commission is reliant on raising  £71 million in fee income from parents as part of its planned savings. These estimates are very uncertain, increasing the risk that additional cuts might be needed late on in the Spending Review that could have an adverse effect on services.

The existing child maintenance schemes were problematic from the start and large backlogs of work built up. Efficiency has improved since 2006 and the cost of administering child maintenance has reduced. There are strong indications that costs remain high. Comparisons with Australia are difficult, but the fact that the Commission spends approximately 56 pence for each £1 it collects for parents, while Australia spent 35 pence raises questions about the relative efficiency of the Commission.

The new child support scheme is due to be introduced this Autumn.