Source · Select Committees · Work and Pensions Committee
Recommendation 24
24
Rejected
Paragraph: 100
Introduce means-testing system for Collect and Pay fees for low-income parents.
Recommendation
We have heard evidence that was strongly critical of the effectiveness of Collect and Pay fees. Such fees are particularly pernicious for parents on low incomes and we recommend that the Government should introduce a system for the means-testing of Collect and Pay fees.
Government Response Summary
The government rejects means-testing Collect and Pay fees, stating that charges are the right approach to encourage parents to use direct pay arrangements. It believes means-testing could create perverse incentives and add complexity to the system.
Paragraph Reference:
100
Government Response
Rejected
HM Government
Rejected
A statutory arrangement through the CMS should not be the default option and parents should consider whether they can make an arrangement without intervention from the Government – which is usually better for children. Fees and charges are key to that ambition and designed to encourage parents to think about whether they need to use the CMS at all, or whether they are able to manage aspects of the arrangement more independently through a Direct Pay arrangement. The Government is clear that charges are the right approach for current users of the service. Applying proportionate charges to all customers that use the service ensures fairness and consistency. Means testing collect and pay charges could lead to some perverse incentives and add complexity into the system as there is currently no means test for the receiving parent and their income is not taken into account within the calculation. Fees