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Select committee inquiry

Child Maintenance Service inquiry

Closed

Work and Pensions Committee · Opened 20 July 2016 · Closed 3 October 2019

13 recommendations · 3 conclusions
Inquiry on parliament.uk ↗

What the inquiry looked at

“The new Child Maintenance Service (CMS) must be prepared and resourced to automatically take-over the more difficult or complicated child support non-payment cases from the CSA, and be toothier in enforcing payment.”

The committee's words, from the inquiry page on parliament.uk ↗.

What it found

In the committee's words, from the summary of 14th Report - Child Maintenance Service ↗

Child maintenance is support for a child’s everyday living costs provided by one separated parent to the other. Children in single parent families are at greater risk of poverty than their counterparts living with both parents. Child maintenance is a vital source of income for many such families and can be important in the life chances of the children concerned.

The Government introduced a new system of child support in 2012. This aimed to encourage parents to come to collaborative family-based arrangements wherever possible. The statutory Child Maintenance System (CMS) is intended to act as a safety net, calculating and, where necessary, administering payments and taking enforcement action when required. The principles behind this approach are correct: parents should take responsibility for supporting their children. As with any new scheme, however, its early years of operation have uncovered problems that need to be addressed, and some with urgency.

Transition to the new scheme

The legacy Child Support Agency (CSA) system is gradually being closed. CSA child maintenance cases are not moved directly into the CMS and case histories are not routinely transferred. Instead the CSA case is closed and parents are given the opportunity to make a fresh start before, if necessary, applying for statutory support.

There is a balance, however, between starting afresh and ensuring payments are made to support children. We recommend that case histories of prolonged under-payment of child maintenance be transferred automatically from CSA to CMS. In instances where the CSA case included ongoing enforcement action, we recommend parents with care be permitted to opt to be placed immediately in the Collect and Pay scheme, which administers payments, on joining the CMS.

Fees for use of the CMS

The 2012 scheme introduced fees designed to encourage parents to collaborate rather than necessarily relying on assistance from the CMS. Some parents who need support cannot, however, afford the £20 CMS application fee and may instead give up on pursuing maintenance payments altogether. We recommend that CMS applicants on means tested benefits be exempt from the £20 application fee. Furthermore, we find it difficult to justify charging an application fee to parents with care to transition legacy cases with a prolonged history of non-payment, especially as such cases appear a low priority for enforcement. Separate fees charged to both parents for using Collect and Pay are discouraging some parents who require the service. It is far from evident that the charges as configured are acting in the best interests of children and we recommend a review of whether they are increasing the number of more collaborative arrangements.

What the government said

The government responded on 22 September 2017.

Summary written by Accountability Index from the government's response.

The government agrees with several of the Committee's recommendations, including on training for frontline staff and a new arrears strategy, but has "no plans" to adopt others, such as exempting benefit recipients from the application fee.

  • On arrears, the government "agrees that it needs to review this issue" and is developing a new Arrears and Compliance Strategy. It will "consult later this year" on the approach, including criteria for prioritising cases.
  • On domestic abuse, it agrees that all frontline CMS staff should receive training, with a national rollout "from September 2017", but does not agree that victims should be moved directly into Collect and Pay without charge.
  • On the £20 application fee, it has "no plans" to extend the exemption to those on means tested benefits. It says it has no evidence that the fee is preventing parents from applying, and will continue to monitor the impact on those with low incomes.
  • It has "no plans" to reintroduce lifestyle-based challenges to assessments, to place HMRC staff within the Financial Investigations Unit, or to establish a new stakeholder group, citing existing arrangements such as Voice of the Client.

Read the government's response ↗ Read the report ↗ Report an error

How the inquiry ran

Each dot is a dated item listed on this page, from the inquiry's opening on 20 July 2016 to its close on 3 October 2019.

  1. Oral evidence 2 sessions
  2. Report 2 May 2017
  3. Government response 22 Sep 2017
  4. Correspondence 7 letters

What it recommended 13 recommendations · 3 conclusions

1Parents should take responsibility for supporting their children and the Government is right to prefer...
Recommended (the committee's words)
Parents should take responsibility for supporting their children and the Government is right to prefer that parents organise maintenance with as little statutory involvement as possible. The transition of cases into the new system offers an opportunity for a fresh start and many parents with existing CSA cases have opted not to enter the CMS. There is a balance, however, between starting afresh in a new system and ensuring payments to support children are made. In cases where the non-resident parent has a long history of non-compliance it is not fair or constructive to force parents with care to start the process from scratch. This currently happens even when there is an active CSA investigation or enforcement action. We recommend that case histories of prolonged under-payment of child maintenance be transferred automatically from CSA to CMS. In instances where the CSA case includes ongoing investigatory or enforcement action, we recommend parents with care be permitted to opt to be placed immediately in the Collect and Pay scheme on joining the CMS.
2The Government state that the statutory scheme is available to those who genuinely need it.
Recommended (the committee's words)
The Government state that the statutory scheme is available to those who genuinely need it. Some parents who clearly need the system are, however, unable to afford the application fee. This is leading some parents to give up on pursuing maintenance payments altogether. We recommend that CMS applicants on means tested benefits be exempt from the £20 application fee.
3We find it difficult to justify charging an upfront CMS application fee to parents with...
Concluded (the committee's words)
We find it difficult to justify charging an upfront CMS application fee to parents with care to transition legacy cases with a prolonged history of non-payment, especially as such cases appear a low priority for enforcement. These parents, and their children, have been failed by their ex-partners and failed by the system.
4Charges for using Collect and Pay are discouraging some parents who require the service.
Recommended (the committee's words)
Charges for using Collect and Pay are discouraging some parents who require the service. In many cases a parent with care has no choice yet 4% is deducted from their payments. In addition, parents report a reluctance by CMS staff to allow them to move onto the scheme and a readiness to move cases out of Collect and Pay even when non-resident parents have failed to make regular payments in full. It is far from evident that the charges and criteria used for determining whether Collect and Pay can be used are acting in the best interests of children. The Government should conduct a review of whether Collect and Pay charges and access criteria are achieving the intended outcome of increasing the number of more collaborative arrangements.
5The Department’s own survey of CSA clients found high levels of domestic abuse.
Concluded (the committee's words)
The Department’s own survey of CSA clients found high levels of domestic abuse. The evidence we received shows that abuse, control and coercion can continue even when a relationship has ended, and can be exerted by either parent. We welcome the waiver of the £20 fee for domestic abuse survivors but further changes are required to make the system safe and effective for survivors of domestic abuse and, ultimately, their children. A system that leaves victims with the choice of re-engaging with their abuser and risking further coercion and control, or declining money owed to them for their children, is clearly not working.
6All frontline CMS staff should receive training on domestic abuse, including understanding abusive behaviour and...
Concluded (the committee's words)
All frontline CMS staff should receive training on domestic abuse, including understanding abusive behaviour and demonstrating sensitivity in dealing with its 34 Child Maintenance Service victims. Those victims are often reluctant to admit to having been abused, so CMS staff should also be trained in identifying abuse. In registered cases of domestic violence, or where CMS staff have identified it themselves, parents with care should be able to proceed directly to the Collect and Pay service and should not be charged. As part of its review of Collect and Pay charges, the Department should consider the impact of charges for the non-resident parent in cases of domestic abuse.
7The foundation of the Government’s approach to child maintenance is to encourage separated parents to...
Recommended (the committee's words)
The foundation of the Government’s approach to child maintenance is to encourage separated parents to come to voluntary agreements where possible and, where such agreements are not possible, provide a statutory system as a safety net. It is apparent, however, that many families may be slipping through that net. Such families are disproportionately likely to be in the most vulnerable groups. The Government’s existing means of monitoring the quantity and success of family-based arrangements are, however, inadequate to properly understand the causes and consequences of the trend. In seeking to encourage separated parents to take more responsibility for their children, the Government must not abdicate its own duties to them. Monitoring must be improved to establish the extent to which parents are adequately supported in making child maintenance choices and whether incentives intended to result in better support for children are in fact having the opposite effect. Only then can it have confidence in meeting its commitment to increase the number of children receiving maintenance.
8We recommend the Department establish a CMS stakeholder group, including parents with care, non-resident parents,...
Recommended (the committee's words)
We recommend the Department establish a CMS stakeholder group, including parents with care, non-resident parents, charities such as Gingerbread and Families Need Fathers, and advisory organisations such as Citizen’s Advice. This group should review the effectiveness of the CMS, recommend improvements to its operation and consider its response to wider social and economic trends such as the increase in self- employment.
9We deplore the non-payment of child maintenance, which can cause financial difficulty and immense stress...
Recommended (the committee's words)
We deplore the non-payment of child maintenance, which can cause financial difficulty and immense stress to the parent with care, ultimately to the detriment of the child. We understand that it is not cost-effective for the Government to pursue every case of arrears. Money owed still, however, rightly belongs to the parent with care to support their children and CMS has made no clear statement of which cases it intends to take up. This can cause uncertainty and disruption for parents seeking recompense. Furthermore, failure to demonstrate that it is taking seriously the worst legacy cases of prolonged under-payment risks undermining trust in the new system. We recommend the Department clearly set out in response to this report the criteria it uses for prioritising the collection of arrears, including any time or value thresholds, and how it intends to approach and resource tackling each category of arrears, appreciating that even small payments can be of huge value to vulnerable families.
10We understand the Government’s rationale in favouring arrears cases that relate to children with current...
Recommended (the committee's words)
We understand the Government’s rationale in favouring arrears cases that relate to children with current support needs. It is, however, unclear whether the Department intends ever to pursue any arrears-only cases. It is unfair to leave those parents still owed for historic underpayments in the dark. We recommend the CMS clarify its stance on this and inform parents with care if their arrears-only case will not be pursued.
11Children from previous relationships and children from new relationships should be of equal importance to...
Recommended (the committee's words)
Children from previous relationships and children from new relationships should be of equal importance to parents. We recommend the DWP set out, in its response to this report, how it intends to ensure that all children are given fair and equitable treatment in cases where CMS intervention is necessary.
12Parents do not themselves have recourse to the courts to enforce child maintenance payments.
Recommended (the committee's words)
Parents do not themselves have recourse to the courts to enforce child maintenance payments. Instead they rely on the CMS to act on their behalf. The CMS has extensive enforcement powers and can take action once a single payment is missed. It is, however, currently tentative in deploying those powers. This enables non-resident parents to get away with not making appropriate contributions to their children’s upbringing. It also signals to other non-resident parents that they may well be able to do the same. Faith in the statutory child maintenance system is fundamental to its effectiveness. The CMS ought to strike fear into would-be evaders of parental responsibility. It must take a stronger approach to enforcement, comparable with the Government’s approach to other areas of financial liability such as benefit fraud or tax. We recommend the CMS adopt a presumption in favour of enforcement action when a payment has been missed, and proceed unless there is either evidence of a valid reason why or a credible reparative payment plan is in place.
13Most parents want to provide for their children.
Recommended (the committee's words)
Most parents want to provide for their children. Unfortunately some want to avoid paying fair child maintenance and disguise their incomes, through self-employment loopholes, creative accounting or fraudulent tax returns, in order to do so. Such cases are often not a high priority for HMRC. We therefore welcome the creation and expansion of the DWP Financial Investigations Unit. But the use of tax return information alone will not be sufficient to solve this problem. Some unscrupulous parents are adept at hiding income to minimise their liability. It is far harder, however, to hide assets or a lifestyle inconsistent with their declared income. We recommend that the Department reinstate provisions for parents to challenge child maintenance awards on the grounds of assets and lifestyle inconsistent with income.
14Parents can currently apply to the CMS for a maintenance calculation which supersedes a court...
Recommended (the committee's words)
Parents can currently apply to the CMS for a maintenance calculation which supersedes a court order that has been in place over 12 months. This has provided opportunity for some non-resident parents to replace maintenance payments that accurately reflect their means with those that greatly underestimate them. We recommend that, when an application for an assets or lifestyle variation has been made and a tribunal or court ordered higher maintenance payments than would arise from a standard CMS calculation, the higher payments should apply until the variation is dismissed.
15Child maintenance cheats are very often tax cheats too.
Recommended (the committee's words)
Child maintenance cheats are very often tax cheats too. There is considerable shared interest for DWP and HMRC in bringing such people to justice. It ought not to be beyond the two Departments to share resources and expertise in the interests of retrieving the monies owed. We recommend that a small HMRC investigation team be embedded in the Financial Investigations Unit to work in tandem with the CMS.
16Throughout our inquiry, witnesses agreed that the ideal outcome for separated parents and their children...
Recommended (the committee's words)
Throughout our inquiry, witnesses agreed that the ideal outcome for separated parents and their children was a fair and consistent payment of maintenance agreed by both parents. The Government is right to encourage this co-operation. Many 36 Child Maintenance Service separated parents are, however, unable to make suitable arrangements without support or even enforcement. In some cases a parent may have suffered domestic abuse and it will not be safe for them to continue contact with their abuser. In others a non-resident parent may be determined to selfishly avoid their parental responsibilities, passing on financial costs to the parent with care and, in the form of benefit payments, the taxpayer. But in cases of avoidance it is above all the children who ultimately lose out. The Government must ensure that the CMS is working so that does not continue to happen. The implementation of our recommendations will help to achieve this goal.

Evidence

Oral evidence sessions 2

Correspondence 7 letters