Child Support Agency open to abuse by business-owning absent parents

“Children that are losing out now should not be made to wait for years for wholesale CSA reform” – Jo

The failing Child Support Agency (CSA) is working against the interests of children while protecting absent parents who own their own businesses, according to Jo Swinson.

Jo raised the issue with Secretary of State for Work and Pensions, the Rt Hon John Hutton MP today of business-owning absent parents exploiting CSA rules to avoid paying maintenance to children. Jo has consistently called for the CSA to be scrapped and its functions transferred to HM Revenue & Customs.

Speaking in the House of Commons today, Jo said:

“Is the Minister aware of the problem of absent parents who own a business avoiding maintenance payments by paying themselves small salaries, then using the business account to pay living expenses, and give their partner a salary?

“Does he think the current provisions for variations on diversion of income are working well to tackle this problem, or does he think these also need reform?”

Commenting further, she said:

“CSA rules currently allow unscrupulous business-owning absent parents to structure their finances in a way that greatly reduces the child support they must pay. In one of the worst cases I have dealt with, two children are missing out on over £300 per month because of the CSA’s inability to make the absent father pay his share.

“The Secretary of State gave an admission that current CSA rules are not currently working well, and need reform. It is in fact the case that new rules were introduced in 2005 to deal with this problem, but disappointingly, the agency seems unable to implement them properly

“The children that are losing out now should not be made to wait for years for wholesale CSA reform, when the agency already has the powers – but apparently not the will – to rectify this situation.”

Quarterly figures published in October 2006 show:

• The average time it takes to deal with a case is now 494 days, a month longer than at the end of last quarter

• The CSA now has £3.5 billion of uncollected debts; £1.9 billion of which it believes is probably uncollectable

• The cost of administering the CSA was published for the first time this month; the cost was £465.2 million, £39.8 million more than last year

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