Following is the speech by the Secretary for Home Affairs, Mr David Lan, in the motion debate on intermediary body to collect and enforce maintenance payments in the Legislative Council today (Wednesday):
First of all, I would like to thank the Honourable Choy So-yuk, the Honourable Mrs Miriam Lau, the Honourable Law Chi-kwong and other Honourable Members for their valuable suggestions on how to address the difficulties encountered by divorcees and their children when collecting and enforcing maintenance payments.
The Government is concerned about the problem and has introduced numerous measures to address it in the past few years. On 26 February 1997, during a motion debate on the question of setting up an intermediary body, the then Secretary for Home Affairs outlined the measures which had been and would be introduced. He went on to say that we would evaluate the effectiveness of the measures after they had been implemented. Before such an evaluation had been conducted, he said, we should not contemplate any fundamental change to our existing administrative machinery.
The improvement measures mentioned by him included legislative amendments to require maintenance payers to notify maintenance payees of changes in address and also, to empower the court to issue Attachment of Income Orders. The legislative amendments were enacted in June 1997. All of them took effect in July 1997, except the provisions concerning Attachment of Income Orders, which came into operation in April 1998.
We have been conducting a review of the law and administrative measures affecting persons eligible for maintenance. The review includes the court procedures to recover arrears and also, the question whether or not to set up an intermediary body to collect and enforce payments. Divorcees of low income who fail to receive maintenance may apply for legal aid in order to take legal actions to enforce payments. Those who suffer genuine financial difficulties may apply for Comprehensive Social Security Assistance (CSSA) to meet their basic and essential needs. We shall examine in our review how to synchronise and streamline the procedures in applying for CSSA and legal aid. In order to obtain more information for the review, we have commissioned a research firm to conduct a survey on single-parent families receiving CSSA.
As the matters covered by the review are extensive and complex, we need more time to work on it. We shall complete the review as soon as practicable. After we have formulated our conclusions, we shall present them to the relevant Panel of this Council. We shall take a view, then, on whether or not to establish an intermediary body to collect and enforce maintenance payments. Today, I wish to share with Members some of the information and opinions we have collected.
In conducting the review, we wrote to about thirty social service organisations and professional bodies. About twenty of them have responded. In addition, at the invitation of the committees of six Provisional District Boards, we attended their meetings to discuss the subject. On the question whether to set up an intermediary body, the opinions given to us are mixed.
In general, those who support such an intermediary body are of the view that the problem of maintenance arrears is serious. The legal procedures to enforce payments are cumbersome and time-consuming. The divorcees who do not receive payments are subject to physical and mental stress. Their children are exposed to financial hardship and witness the predicament faced by their caring parents. This adversely affects the children's development. Those in favour of setting up an intermediary body hold the view that the problem cannot be solved by simply amending the existing legal procedures. They suggest that the Government should set up an intermediary body to collect maintenance on behalf of the divorcees. This not only would address the difficulties faced by the divorcees. But also, it would avoid the situation whereby some divorcees rely on CSSA and refrain from applying for maintenance or from taking legal actions to recover arrears. In the circumstances, those who advocate the establishment of an intermediary body consider that it would relieve the burden on CSSA.
Those who have reservations about the proposal for an intermediary body also urge the Government to address the difficulties encountered by the divorcees in enforcing payments. They, however, question whether such an intermediary body is the only or the best solution. They are concerned about cost-effectiveness and the resources required to establish such a body. They suggest that the Government should concentrate its efforts on improving the existing law and administrative measures, including streamlining the procedures in applying for CSSA and legal aid. They consider it inappropriate, at the present stage, to create a new executive body to intervene directly in the collection and enforcement of maintenance payments.
The Honourable Choy So-yuk urges the Government to draw on overseas experience. As several Members have said, child support agencies have been set up in USA, New Zealand, Australia and United Kingdom. The available information suggests that child support agencies were set up in these countries because there was inconsistency in the amounts of maintenance assessed by the courts, the courts' assessments were on the low side and the collection rate was also low. As a result, many divorcees in these countries did not apply for maintenance and instead, relied on social security payments. In view of the low level of maintenance assessed by the courts, many of those who did receive maintenance still had to apply for social security payments to maintain their living. In order to reduce expenditure on social security payments and alleviate the divorcees' difficulties in collecting payments, the governments of these countries set up child support agencies. The functions of the agencies are to assess the amounts of maintenance, to collect payments on behalf of the divorcees and to take enforcement actions to recover arrears.
In Hong Kong, the views we have collected so far do not show that there is dissatisfaction in the community with the present system whereby the power to assess maintenance payments is vested in the Judiciary. Even those who strongly support the establishment of an intermediary body have not proposed that the power of assessment should be transferred from the Judiciary to an executive body.
In the countries mentioned earlier, the establishment of child support agencies did achieve the aim of reducing the expenditure on social security payments. However, it is impossible to tell, from the available information, whether the reduction was due to a rise in the general level of maintenance awarded or to an increase in the collection rates of maintenance.
We have heard the view that overseas experience shows that the establishment of an intermediary body would raise the collection rates of maintenance. I am afraid we have not been able to find any fact to substantiate such a view.
The Legislative Council Secretariat has prepared two research reports on the child support agencies in the four countries. The first report was published in December last year. Paragraph 6.3 of the Report states, and I quote :-
" .... official information on how the collection rate was calculated before the establishment of the child support agencies in the US, Australia and the UK was not available. It is therefore not possible to say whether it is useful to have a dedicated body for collecting child support for these three countries." (Unquote)
As regards the fourth country, i.e. New Zealand, its collection rate of maintenance was 91% after the establishment of the child support agency. Paragraph 13.18 of the LegCo Secretariat's Report says, and I quote:-
" .... it seems that the collection rate has increased from about 40% to a much higher rate after the child support agency was established. However, it is not known whether the collection rates before and after the establishment of the child support agency are calculated in the same manner." (Unquote)
The collection rate of 91% in New Zealand is the highest among the lot. The LegCo Secretariat's Report shows that the collection rate of the child support agencies is 81% in Australia, 53% in UK and only 21% in US.
Also, paragraph 13.19 of the Report states, and I quote:-
"Child support debts are building up in all four countries. A lot of the debts have been outstanding for a long time and are difficult to collect. New Zealand is conducting a trial to sub-contract collection of old debts to the private sector. About 20 states in the US have contracted private sector firms to collect some of the child support debts." (Unquote)
The LegCo Secretariat published another research report in April this year. According to paragraph 6.35 of this second report, a parliamentary committee in Australia has, I quote -
"suggested that the government refer difficult cases to private collection agencies as a means of improving the efficiency of the child support agency. The child support agency would monitor the privatisation of child support activities in the United States and New Zealand before making decision on the proposal." (Unquote)
UK is the only country which does not intend to privatise debt collection. The reason, according to paragraph 6.36 of the LegCo Secretariat's second report, is that - and I quote :
" ... the debt of the child support agency was very rarely clean debt since there was often a genuine dispute over what amount should be paid due to problems related to assessment." (Unquote)
The Honourable Mrs. Miriam Lau proposes that the Government should draw up measures to enable those people who have financial difficulties due to defaulted alimony and are eligible for CSSA to receive assistance payment immediately. Like all other cash assistance from the public funds, applications for CSSA have to go through the necessary verification and authorisation procedures. The Social Welfare Department deals with each case in the light of its particular circumstances. For urgent cases where there is a genuine need, the Department may provide cash assistance as early as within the same day when the application is made.
Finally, I wish to thank Members again for their views on the subject, which we shall consider carefully in the context of our review. As I said earlier, our review is a comprehensive one and we shall present our conclusions to the relevant Panel of this Council as soon as practicable.
Thank you, Madam President.
End/Wednesday, December 8, 1999