THE 13-year-old law that forces hundreds of thousands of lone parents on benefits to use the Child Support Agency (CSA) to get maintenance will be scrapped, The Times has learnt. Ministers will announce on Monday that the CSA will be closed and replaced with a new pared-down system focusing on the most hardened cases of absent fathers who refuse to pay for their children.

To cut the caseload of the new agency and allow it to concentrate on difficult family break-ups, and reduce the £400 million-a-year running costs, lone parents on benefits will no longer be obliged to use it.

Compulsion was the cornerstone of the original system designed by the Conservatives, who believed that the CSA would lead to huge cuts in spending on benefits to lone parents. The decision to end this legal requirement is an admission by the Government that the CSA has failed to meet its goal and is simply unable to deal with the scale of the problem of maintenance payments after family break-up. The move will be welcomed by charities and pressure groups who have been campaigning for compulsion to be scrapped.

Sir David Henshaw, former chief executive of Liverpool City Council and architect of the new system, believes that the move, along with other reforms, will slash by half the running costs of the system to £200 million a year. John Hutton, the Work and Pensions Secretary, is more cautious and has told officials not to factor those figures into the budget until they have been tested.

In addition to the end of compulsion, parents on benefits will be given huge incentives to sort out maintenance payments. Lone parents will no longer be obliged to surrender income support once child maintenance is paid.

Under the current system, single mothers are allowed to keep only £10 a week of their benefits when they begin to receive maintenance.

Mr Hutton believes that the move will act as an incentive for couples to reach a deal as well as to help the Government meet its ambitious target to cut child poverty.

One Whitehall official said: “At the moment fathers can reasonably argue there is no point in paying maintenance because the mother’s benefits will end up being cut and she’ll be no better off. Under the new system, much, much more money will go to the children, so that is no longer an excuse.”

Seventy per cent of all CSA cases are from benefit claimants, and of these only 36 per cent say that they would use the CSA voluntarily.

A new Bill will be published to create the new agency.

The CSA has struggled since its creation 13 years ago and is chasing £2 billion of outstanding debts owed to single parents, although much of this has been written off.

Half of all mothers who apply to the CSA have no contact with the father of their children. In one in five cases, the mother and father have never lived together, and in 15 per cent of cases the father is also being chased by other mothers.

Mr Hutton has decided to give extra powers to the new agency to use credit details to track down absent parents and discover how much money they have. Greater use will also be made of “deduction of earnings orders” to collect payments. These orders are now issued only in exceptional cases but will become routine, government sources say.

Private debt collectors will also be invited to bid for contracts to enforce payments.

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