Crown Copyright 2012


Question 4 Have we taken the right approach to enforcement charges within the payment hierarchy?



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Question 4

Have we taken the right approach to enforcement charges within the payment hierarchy?

Case closure regulations


  1. As part of the managed approach to the closure of existing Child Support Agency (CSA) scheme cases, we intend that CSA cases managed off the main system, also known as ‘clerical’ cases, should be closed first. These cases are more costly to the taxpayer to maintain, and the clients involved are likely to have experienced relatively poor levels of service. We believe it is therefore right that the clients involved with such cases are able to benefit from our reforms first.


  2. It is intended that the remainder of the existing scheme CSA cases will beclosed on an ‘oldest first’ basis. In these cases, a higher proportion of non-resident parents who remain liable to pay child maintenance have a ‘nil’ liability (meaning that they do not have a regular child maintenance obligation) than the CSA caseload as a whole, so we believe it is right that these cases are addressed sooner than more recent cases. There are three ways in which an existing CSA case may close, dependent on when it closes and the type of case.


Reactive Transition prior to the introduction of charging


  1. Prior to the beginning of the main, three-year period of ‘proactive’ case closure, it may be necessary to close some existing CSA cases and move them to the new scheme ‘reactively’. This occurs where an application to the new scheme names a non-resident parent who is already a non-resident parent on an existing CSA case. Where this happens, we
    have to close the existing CSA case because we can only calculate
    the non-resident parent’s liability for all their cases under one set of calculation rules.


  2. We will quickly move the ongoing liability to the new scheme, but we will not remove any associated arrears. Any arrears accumulated on the existing CSA schemes will remain outstanding and due unless the parent with care tells us they do not want any arrears owed to them collected.


  3. Collection fees and enforcement charges, will not apply to cases until such time as charging is introduced. Collection fees will not apply retrospectively
    to any debt transferred.


  4. Where parents are using the collection service, we will impose a service fee
    for maintenance liabilities generated once charging comes into effect. We
    will give clients notice of this at the time that we transfer their case onto the new service, and again before any fees become payable. Similarly, the
    non-resident parent will be liable for charges for relevant enforcement action taken once enforcement charging is introduced, other than where this is only concerned with recovering debt generated before the case moved to the new scheme.


Reactive case closure after the introduction of charging


  1. It will be necessary to close some existing CSA cases ‘reactively’. Similar to ‘reactive transition’, described above, this occurs where an application to the new scheme names a non-resident parent who is already a non-resident parent on an existing CSA case. However, the process needs to be different once the proactive closure of existing CSA cases is underway, in order to balance the existing parent with care’s need to consider whether to make a family-based arrangement or apply to the new scheme, with the new parent with care who will be waiting for a maintenance liability to be established.


  2. As charging will apply at this stage, it is right that parents should be given the choice between making their own family-based arrangements and applying to the new service, rather than their case simply being transitioned to the new scheme. Parents will be given 30 days to decide what course of action they wish to take in these cases.


  3. Over this 30-day period, the new applicant who has applied to the new
    service will effectively not have access to a statutory child maintenance scheme, and the non-resident parent will not be building up any liability in respect of the new case. We recognise that this puts the new applicant at a disadvantage, however the purpose of it is to allow 30 days for any existing parents with care, and the non-resident parent, to consider their options. It will give them time to explore the feasibility of making a family-based arrangement, and for the existing parent with care to decide whether they are content to pay the application fee required to make an application to the new service. It will also give both parents the opportunity to consider whether they are content to pay any possible future collection fees should they use the collection service.


  4. Existing CSA scheme clients will be contacted, in writing, 30 days before
    the maintenance liability is to be withdrawn, advising them that their case
    will be closed and the reasons for it. This letter will contain the Child Maintenance Options helpline and ‘support for separated families’ web application details to signpost support to make a family-based arrangement, together with information about outstanding arrears. A second letter will be sent nine days later if the client indicates they would like more information about their arrears. A final letter will be sent at the 30-day stage, confirming the CSA maintenance liability has ended. When clients have received the initial letter, they will be able to arrange further reminder notifications via SMS text messaging or e-mail. More generally, we will be working to raise awareness of the closure of the existing CSA scheme and what clients should do next, for example through websites that advise on consumer finance issues.




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