Commentary on Sections Debt management powers Section 34: Transfer of arrears
340.Section 34 inserts new section 49A into the Child Support Act 1991, which provides regulation-making power to the Secretary of State, to enable the Commission to enter into arrangements with other persons or organisations under which liability in respect of arrears of child support maintenance becomes debt due to such a person or organisation.
341.Subsection (2) of new section 49A prevents the Commission from using its enforcing powers in relation to collecting any debt that has been transferred, and also ensures that only the transferee will have title to the debt.
342.Subsection (3)provides that the regulations must prevent the Commission from entering into arrangements to transfer child maintenance debt without the consent stipulated in subsections (6) to (8), unless one of the conditions in subsection (4) is met.
343.The conditions set out in subsection (4) relate to arrears which may be retained by the Commission because a person with care was in receipt of prescribed benefits at the time the arrears accrued. Where the person with care is in receipt of such benefits, they are paid their full benefit entitlement, but the Commission may retain child maintenance payments to offset the benefit expenditure. Subsection (4)(a) sets out that the Commission would not require consent to transfer arrears if all the arrears may be retained by the Commission if recovered.
344.Subsection (4)(b) relates to arrears some of which are owed to the person with care and some of which may be retained by the Commission because the person with care was in receipt of prescribed benefits for some of the time when the arrears were accruing. In this situation the Commission would not require consent to transfer arrears if the amount of arrears which would be due to the person with care is equal to or less than the transfer payment.
345.Subsection (5) defines, for the purposes of this section, that “transfer payment” means:
	the payment that the Commission would receive from transferee once the arrears have been transferred; and
	such other payments under the transfer arrangements as may be prescribed.
346.Subsection (6) stipulates that written consent is required from the person with care unless an application for a maintenance calculation is made by a child of 12 or over in Scotland.
347.Subsections (7) and (8) set out that where an application for a maintenance calculation has been made by a child in Scotland their written consent is required and the consent of the person with case where:
	the maintenance calculation takes account of any other qualifying children of the non-resident parent who are in the care of the same person with care as the child who made the application; or,
	a maintenance calculation has been made following the application by a child and the person with care subsequently applies to have the child support maintenance to be collected and/or enforced.
348.Subsection (9) provides that regulations made by the Secretary of State under this power may:
	Specify when arrears would be considered for transfer. The regulations could specify, for example, that arrears could be transferred only if the consent of the person with care has been obtained.
	Specify the type of transferee to which arrears can be transferred. The regulations could, for example, include safeguards to ensure that the transferee is reputable and abides by a professional code of conduct.
	Specify the terms and conditions which the transfer arrangements must include. The regulations may require, for example, that the transfer agreement must provide that the debt can not be sold on further.
	Provide that a payment made to the Commission under transfer arrangements may be treated for prescribed purposes as if it were a payment of child support maintenance.
349.Subsection (10)sets out further that the regulations may include:
	provision as to the means of recovery the transferee is able to use;
	provision that the Commission may, in certain circumstances, prevent a transferee from taking steps to recover it. The circumstances could be, for example, that the steps being taken are inappropriate; and
	provision regarding the type of information which the Commission may supply to a transferee, for the purposes of recovering the debt.