Select committee inquiry
Child Maintenance
Closed
What the inquiry looked at
“The Child Maintenance Service (CMS) - set up in 2012 to replace the previous Child Support Agency - is for separated families who have not been able to reach a private arrangement about how their children’s living costs will be paid. The Department for Work and Pensions estimates that £934 million of statutory child maintenance was paid between parents using the CMS in 2019-20, at a net cost of £146 million. Billions of pounds of unpaid child maintenance debt that remained from the previous CSA schemes has been written off, and in June 2021 the House of Commons Library showed that unpaid child support under the replacement CMS now stood at £421.5 million. The Committee will question senior officials at DWP on the value for money of the child maintenance system , including: whether the Department effectively managed the wind-down of the previous CSA schemes; whether the CMS is achieving its objectives; and whether the Department manages its resources effectively to deliver a high-quality service through the CMS. If you have new evidence on these issues please submit it here by Wednesday 9 March 2022 18:00. Please note that the Committee cannot investigate or take up any individual cases or claims – evidence submitted will be considered to inform questioning to the DWP and the inquiry’s conclusions.”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
In the committee's words, from the summary of Ninth Report - Child Maintenance ↗
Ten years after reforms designed to improve child maintenance, the Department for Work & Pensions is achieving no more for children of separated families than under the previous, discredited Child Support Agency (CSA). Around half the children in separated families (1.8 million children) continue to receive no support from their non-resident parent. The Department’s reforms aimed to reduce reliance on the state by encouraging parents to make their own family-based arrangements. But, while there has been an increase in family-based arrangements, this is offset by fewer separated families than expected using the Department’s statutory schemes and a dramatic increase in the proportion with no arrangements at all.
The Department assumes that most parents can reach an amicable agreement for child maintenance but has done little to ensure this is the case or to address concerns that its approach risks causing a further deterioration in the parents relationship or exacerbating abuse and coercive control. Similarly, it has done little to understand or address why take-up of its statutory Child Maintenance Service (CMS) scheme is so much lower than expected, particularly amongst some of the poorest and most vulnerable in society. Delivering the Department’s aim of maximising the number of effective child maintenance arrangements will rest not only on the Department improving its management of the CMS, but also on far better cross-government leadership to address barriers within legislation and to ensure child maintenance is fully integrated with other areas of public policy.
In the meantime, there is much more the Department can do to improve the current system. The Department has improved the operational performance of the CMS, which now calculates more than 99% of awards correctly and has improved maintenance collection through its Collect & Pay service, so that 49% of paying parents pay most of the maintenance due, compared to 31% in the quarter ending March 2016. However, more needs to be done to ensure children receive the support due from paying parents and that the Department provides a high-quality service. Enforcement can be too slow to be effective when parents do not pay. Fewer customers are satisfied with the CMS than under the old CSA and the Department upholds more complaints for every 1,000 customers on child maintenance than any other area of its business. The Department relies on reports from parents receiving child maintenance to trigger an investigation into whether income has been understated, which parents can be understandably reluctant to do. Meanwhile, balances of unpaid maintenance owed to receiving parents are forecast to increase to £1 billion by March 2031, similar to the level of unpaid legacy maintenance from the CSA that the Department recently wrote-off, meaning the scale of unfulfilled obligations once again looms as a major issue.
What the government said
The government responded on 14 October 2022.
Summary written by Accountability Index from the government's response.
The government disagrees with the Committee's recommendations on cross-government leadership, research into under-represented groups, fraud and error, and affordability, while stating that it agrees with others, in several cases describing them as already implemented.
- On cross-government leadership, the government disagrees, saying the department "intends to continue to discharge this working with other government departments" and already publishes an annual measure of families with a child maintenance arrangement.
- On domestic abuse, the government agrees and says the recommendation is implemented. It is assessing an independent review's recommendations and is adapting its Transformation Programme, which "will continue throughout 2023".
- On fraud and error, the government disagrees, stating that the department "already has proportionate and cost-effective controls" and continually reviews its fraud strategy.
- On affordability, the government disagrees, saying the department cannot set out plans as this "relies upon a policy decision", but is considering them and "will update the Work and Pensions Committee in due course".
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 12 January 2022 to its close on 14 October 2022.
- Oral evidence 16 Mar 2022
- Report 22 Jun 2022
- Government response 14 Oct 2022
What it recommended 29 recommendations · 7 conclusions
2The Department has displayed insufficient curiosity around the needs of some of the most vulnerable...
Recommended (the committee's words)
The Department has displayed insufficient curiosity around the needs of some of the most vulnerable separated families and their children. Take-up of the Department’s CMS scheme is substantially lower than it expected. An estimated 18% of separated families used the CMS scheme in 2019–20, compared to an expected 33%. As a result, there may be around 350,000 parents with caring responsibilities who do not have a child maintenance arrangement but would like one. The Department’s research shows that the lowest-income households are most likely to have no form of child maintenance arrangement. Some 39% of surveyed separated parents who were either not working or were economically inactive had no child maintenance arrangements in place, compared with only 21% of those who were working. Some ethnic groups, including Black parents, also appear less likely to use the statutory scheme but the Department has no plans to look into why this 6 Child Maintenance is the case. The Department’s customer satisfaction survey for the scheme excludes non-English speakers, meaning the views and experiences of this group are not represented. We welcome the Department’s commitment to raising awareness of its CMS scheme and other services, but we are disappointed that this had not happened sooner and are not convinced that its current approach focuses enough on why take- up is lower amongst specific groups. Recommendation: The Department should: • within one year, develop a clear action plan to assess, tackle and monitor the ‘take-up gap’ between the number of separated parents that would benefit from using its statutory CMS scheme (and other relevant support services) and those that actually use them; and • to support this, undertake more inclusive research to understand its customers and users of its service. It should ensure people who do not communicate in English are included in its research and establish why under-represented groups, such as some minority ethnic groups, seem less like
3The Department’s system of child maintenance is not designed to protect those subject to domestic...
Recommended (the committee's words)
The Department’s system of child maintenance is not designed to protect those subject to domestic abuse or coercive control. The Department designed the current child maintenance system to emphasise collaboration between parents, with the CMS available as a voluntary safety net that separated parents can choose to use if they decide to. For survivors of domestic abuse, the CMS may be the safest and only way to secure maintenance from their ex-partner. Around three in five parents that apply to CMS report that they or their child had experienced domestic abuse. The Department points to the training and controls it has put in place to protect such parents subject to domestic abuse and coercive control. However, we are deeply concerned by submissions from stakeholders relating to how the CMS fails to provide these parents with appropriate support or consideration for their circumstances, and how the system exacerbates conflict between parents and financial coercion by requiring intervention from the receiving parent before CMS can take action in a case. This leaves the system open to being ‘played’ by parents wishing to exert coercive control over the other parent, including using the child maintenance system to continue to abuse their former partners, for example by withholding payments or access to children. The Department does not investigate why people stop using its services and whether there are any issues of financial or other coercion in such cases. It also knows little about separated parents without any form of arrangement, and therefore, whether some victims of domestic abuse of coercive control are prevented from using the service. Recommendation: The Department should, as part of its Treasury Minute response, outline how it will identify cases which potentially involve domestic abuse or coercive control and adapt its services and communications in response. It should build into its transformation plans: clearer routes for parents to flag and communicate do
4The Department has not taken responsibility for detecting child maintenance fraud, instead shifting this responsibility...
Recommended (the committee's words)
The Department has not taken responsibility for detecting child maintenance fraud, instead shifting this responsibility onto its customers. The Department asserts that it does not treat tackling child maintenance fraud, where children often suffer as the end user, with any less enthusiasm than it does tackling fraud against the taxpayer. However, its approach does not appear to reflect this sentiment. It has not assessed the risk or actual level of fraud and error within child maintenance in the way that would be required if it was public expenditure, and its approach to fraud detection relies almost entirely on receiving parents challenging the value of maintenance assessments. This last point means that if a paying parent is notified that they are under investigation for allegedly understating their income there is a risk that they will know or suspect that their ex-partner has reported them. It would therefore be understandable that many receiving parents would be reluctant to come forward with such reports, particularly if it is not clear what the outcome will be. The Department says that, in 91% of cases, it can rely legally on historical earned- income data from HMRC and its own benefits data to assess people’s earned income and benefit status, and also plans to update legislation to include unearned income information held by HMRC in the initial calculation. Nonetheless, the Department accepts that child maintenance is still vulnerable to certain types of customer fraud and error, such as misdeclaration of personal circumstances that affect the award but are not related to income, or the 9% of cases where it cannot rely on historic tax or benefit records. Whilst we welcome a proportionate, iterative approach to tackling fraud and error, the Department’s current approach risks seriously underestimating its susceptibility to fraud and ignoring the various good reasons why parents may not raise concerns about fraud. Recommendation: The Department should take res
5The Department is too willing to blame low levels of customer satisfaction on CMS customers...
Recommended (the committee's words)
The Department is too willing to blame low levels of customer satisfaction on CMS customers being difficult to please, despite its own systemic customer service failings. It is disheartening that customer satisfaction is no better now than it was under the failed CSA and that less than half (46%) of customers report they are satisfied with the service they receive. Given that the CMS scheme was 8 Child Maintenance set-up to replace an agency whose customer service was generally considered to be diabolical, it is unacceptable that the Department has not put in place a robust method for objectively assessing whether it is providing a reasonable level of service. In explaining low levels of customer satisfaction, the Department emphasises the challenging nature of its caseload and areas where it has improved its performance, such as payment accuracy. However, CMG receives by far the most complaints, and the most upheld complaints per 1,000 customers (1.15), of any of the Department’s business areas, suggesting fundamental issues with the way it handles customers’ concerns. Despite the large number of complaints upheld, the Department is less likely to uphold complaints relating to child maintenance (around one in three are upheld) than it does for other service areas. It told us this is because of the nature of CMG’s caseload. However, child maintenance accounts for a disproportionately high share of all rejected complaints subsequently investigated and upheld (or partially upheld) by the Department’s Independent Case Examiner, suggesting that the Department may be incorrectly rejecting some complaints. Recommendation: The Department should use its digital transformation to develop performance indicators that enable it to fully understand why customer satisfaction is so low, and target improvement where data suggests there may be an underlying service issue, for example: where high numbers of complaints are upheld. The Department should also, within one year, review Ch
6The Department is too slow to take effective enforcement action, leaving children without maintenance for...
Recommended (the committee's words)
The Department is too slow to take effective enforcement action, leaving children without maintenance for too long and allowing child maintenance arrears to grow. The Department designed its CMS scheme to encourage parents to use Direct Pay first, and the supporting legislation forces some receiving parents onto Direct Pay even when they assert correctly that their ex-partner will not pay. It is therefore no surprise that around half of new Direct Pay arrangements are either not sustained or are not effective, allowing unpaid maintenance debts to build to an average of £1,100 before the parents eventually move onto Collect & Pay. The Department accepts that it needs to go further to identify non-paying Direct Pay cases more quickly. The Department has improved compliance rates on Collect & Pay but around half of paying parents still paid less maintenance than was due in the quarter ending September 2021. Where paying parents continue to be non- compliant, the Department is slow to advance cases onto civil enforcement action. The Department told us it wants to speed up its enforcement processes but is restricted in how it can pursue unpaid maintenance, as many of the enforcement steps are defined by legislation and require action by external bodies, such as the courts. As a result, it can take years before payments are made to receiving parents whilst arrears continue to build. In addition, some paying parents simply cannot afford maintenance payments, meaning enforcement is unlikely to result in any more maintenance actually being paid. The amount of money owed by paying parents is forecast to reach £1 billion by March 2031, and, without legislative change is at risk of growing indefinitely. Child Maintenance 9 Recommendation: The Department should, within one year: • conduct operational and user research to better understand how customers progress through its collection and enforcement process, to identify any operational or legislative barriers to reducing the ove
7The Department’s ability to collect child maintenance is limited by the affordability of payments and...
Recommended (the committee's words)
The Department’s ability to collect child maintenance is limited by the affordability of payments and the system risks creating a poverty trap for some Paying Parents. More than two-thirds of Paying Parents on Collect & Pay and over a quarter of those on Direct Pay say the payments are not affordable. Low income Paying Parents (those that do not earn enough to pay income tax) make up 46% of Paying Parents and 62% of those with unpaid arrears. The rate at which these arrears can be recovered from those with the lowest incomes is limited, particularly where the Paying Parent is on benefits and has other debts. The amount Paying Parents pay is based on a taper that is higher for those on higher incomes and a flat rate of £7 a week for those with the lowest income. However, the income thresholds at which those rates increase have not been changed since they were set out in legislation in 1998, and inflation means that higher rates apply to those with lower incomes than originally intended. We heard from non-resident parents who told us they had experienced distress and hardship after being asked for maintenance payments they considered to be unfair, or inaccurately-calculated. Serious constraints on parents’ ability to pay the maintenance will inevitably hamper the effectiveness of any effort, however well-administered, to collect maintenance or enforce the collection of arrears. But some Paying Parents face a poverty trap where there is little incentive for them to work more. Some parents can face ‘taper rates’ of benefits, child maintenance and council tax reductions equivalent to an effective marginal tax rate up to 100% as their earnings increase. Recommendation: As part of its Treasury Minute response, the Department should set out its plans to review the affordability of Child Maintenance Payments and the appropriateness of the current award calculations, including the earning thresholds.
8The Department has repeatedly failed to achieve savings targets for the child maintenance scheme over...
Recommended (the committee's words)
The Department has repeatedly failed to achieve savings targets for the child maintenance scheme over the past decade and again risks overpromising on the benefits of its current transformation programme. The Department has reduced the cost to the taxpayer of administering child maintenance by £172 million from £494 million in 2011–12, to £322 million in 2020–21, in line with its smaller caseload and new income from charging. However, the Department has failed to deliver on its promised efficiency savings. The amount of money it needs to administer child maintenance remains £88 million higher than the £234 million promised by the Department in its 2013 Business Case. In addition, the cost to administer the return of £1 of maintenance payments has increased from 35p in 2011–12 to 36p in 10 Child Maintenance 2020–21. The Department has high hopes for its £30 million digital transformation programme and aims to further reduce annual costs by £128 million (40%) to £194 million for 2024–25 whilst improving both compliance and customer service. However, given the Department’s track record, we are not optimistic about the prospects for this latest programme. Recommendation: As part of its Treasury Minute response, the Department should set out new cost-effectiveness and wider value for money targets against which it can be held to account. Child Maintenance 11 1 The child maintenance landscape
1On the basis of a report by the Comptroller and Auditor General, we took evidence...
Concluded (the committee's words)
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Work & Pensions (the Department) about child maintenance in Great Britain.1 We also received and considered written evidence from individuals and organisations from within the sector.
9The Department also told us that some issues identified with the integration of child maintenance...
Concluded (the committee's words)
The Department also told us that some issues identified with the integration of child maintenance were the result of legislation. For example, the rates for calculating child maintenance are outlined in legislation and mean that some paying parents on Universal Credit may see that as their earnings increase the resulting change in improvement in their disposable income is significantly reduced. This is because the combined effect of increases in their child maintenance payment, council tax reductions and reductions in their Universal Credit award can create ‘effective marginal tax rates’ of up to 100%. The Department also told us that child maintenance legislation means it cannot take partial deductions from the Universal Credit award to repay child maintenance arrears.13 Take-up and outcomes for the most vulnerable separated families and their children
10Take-up of the Department’s CMS scheme is substantially lower than it expected.
Recommended (the committee's words)
Take-up of the Department’s CMS scheme is substantially lower than it expected. The Department estimated that 18% of separated families used the CMS scheme in 2019– 20, compared to its expectation of 33% by 2019.14 In 2021, the Department found that 49% of non-resident parents and 35% of parents with care without any arrangements wanted to change this. This suggests that there may be 500,000 non-resident parents and 350,000 parents with care (equivalent to around 60% of receiving parents on the current CMS scheme caseload) who do not have a child maintenance arrangement but would like one.15
11The Department told us that it “absolutely” wanted parents who were not receiving maintenance because...
Recommended (the committee's words)
The Department told us that it “absolutely” wanted parents who were not receiving maintenance because the other parent was not willing to pay to feel that they can come to the Child Maintenance Service and that it will support them. It explained that, since closing CSA cases at the end of 2018, it had “much more opportunity to focus on things like building awareness and growing the caseload”. As part of this, it told us that it had been providing training to Universal Credit Work Coaches on the CMS and what it does, and that it was putting more services online to improve the accessibility of its Options Service (a mandatory service for those applying to the CMS designed to help families make an informed choice about arranging maintenance).16
12The Department does not know whether all groups of parents find CMS equally accessible or...
Recommended (the committee's words)
The Department does not know whether all groups of parents find CMS equally accessible or whether CMS produces different outcomes for different groups. The Department’s research found that low-income families, those with disabilities, and those with higher levels of parental conflict, appear more likely to have no arrangement in place. For example, in 2021, 39% of separated parents who were either not working or were economically inactive had no child maintenance arrangements in place, compared with 21% of those who were employed or self-employed. Similarly, over a third (34%) of separated parents whose children had special education needs or a disability (SEND) had no arrangements, compared with less than a quarter (23%) of children who did not have SEND. The Department believes that it does not require information on parents’ protected characteristics to run its CMS scheme and has no information about the ethnic background of 25% of receiving parents, or 49% of paying parents. 13 Qq 84, 104 14 C&AG’s Report, para 1.11 15 Q 10; C&AG’s Report, para 1.22; The Department’s published Child Maintenance Service statistics: data to September 2021, section 5 for caseload information. 16 Qq 2, 11 14 Child Maintenance
13The NAO found that parents from some minority groups, such as Black, African, Caribbean or...
Recommended (the committee's words)
The NAO found that parents from some minority groups, such as Black, African, Caribbean or Black British parents, are less likely to use the CMS scheme. However, the Department has not conducted research into why this might be or whether there is any indirect racial discrimination.17 Race is a ‘protected characteristic’ and under the Public Sector Equality Duty, which came into force in April 2011, public authorities are required, among other duties, to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not.18 However the Department told us that it had no plans to do any research into why take-up is lower amongst certain groups, and that its focus was on increasing general awareness of the CMS. We were therefore not convinced that the Department’s approach focuses enough on why take- up is lower amongst specific groups, such as Black women and were concerned that this was indicative of a lack of curiosity on the Department’s part. The Department informed us that it needed to increase the ethnicity declaration rate (which it reports as 75%) to improve the data on which it could base analysis, and would reflect on whether it has any plans to make it higher.19 We raised concerns that the Department excludes certain types of customers, such as non-English speakers, from its customer satisfaction research on its CMS scheme ‘for practical purposes’. The Department told us that it would take away our request to commit do some research that includes non-English speaking parents, including on why they may not use the service.20 17 Qq 22–23; C&AG’s Report paras 1.23–1.24 18 Comptroller and Auditor General: Employment Support- Kickstart, session 2021–22, 26 November 2021, HC 801. Footnote 32 to paragraph 3.12 19 Qq 23–31; C&AG’s Report, para 1.24 20 Qq 77 and 78; The Department’s published Child Maintenance Service Client Satisfaction: Background information and methodology, December 2016, page 3. Child Maintenance
14Customer satisfaction with the CMS is no better than under the old CSA schemes.
Recommended (the committee's words)
Customer satisfaction with the CMS is no better than under the old CSA schemes. The Department’s internal survey results show that in the quarter ending December 2019 (before the pandemic), the Department’s customer satisfaction rating was 60%. This is lower than it was when the 2012 scheme was first introduced to replace the CSA schemes, which were widely regarded as having failed to manage child maintenance adequately. More recently, the Department has incorporated its customer satisfaction survey for CMG into is wider departmental customer experience survey. Under this measure, less than half (46%) of customers were satisfied with the service they received in the quarter ending September 2020.21
15The Department’s Customer Charter (the Charter) covers four customer service areas: ‘ease of access’; ‘getting...
Recommended (the committee's words)
The Department’s Customer Charter (the Charter) covers four customer service areas: ‘ease of access’; ‘getting it right’; ‘keeping you informed’; and ‘right treatment’. The NAO found that it is difficult to assess the Department objectively against these areas because the Department has not identified a suite of performance measures, management information and benchmarks that it needs to assess whether it is providing a reasonable level of service.22 The Department told us that in its view, “there is actually quite a lot of evidence that suggests the service is getting better”, such as improved payment compliance and accuracy.23 However, there has been no noticeable improvement in how its customers perceive the Department’s performance in the four areas, and some aspects of customer service have declined. For example, the C&AG’s report shows that Charter scores based on customer survey responses relating to ‘ease of access’, ‘keeping you informed’ and ‘right treatment’ appear no better for the quarter ending December 2019 than they did for the quarter ending June 2017. In addition, the average amount of time taken to answer telephone calls increased substantially, from 26 seconds in the quarter ending June 2018, to 21 minutes in the quarter ending September 2021.24
16The Department received 6,521 complaints about child maintenance (around six for every 1,000 customers) in...
Recommended (the committee's words)
The Department received 6,521 complaints about child maintenance (around six for every 1,000 customers) in the year to 30 September 2021. This was considerably down from pre-pandemic levels in line with a general fall in complaints to the Department during the pandemic. Of the 6512 complaints received, the Department upheld 1,278 (1.15 per 1,000 customers). This is the highest per customer rate for any business area within the Department. The Department only upholds a complaint if, on investigation, it agrees that the aspect of service complained about was below the standard expected.25 The Department explained that the number of upheld complaints was coming down and that it considered this was “a sign of positive action”. The Department told us that we would continue to see it “reducing levels of upheld complaints going forward”.26
17Despite child maintenance having the highest rate of complaints within the Department, the Department upholds...
Recommended (the committee's words)
Despite child maintenance having the highest rate of complaints within the Department, the Department upholds a lower proportion of complaints relating to child 21 Qq 124–125; C&AG’s Report, paras 5, 1.14, 3.10 22 C&AG’s Report, para 3.11 and 3.12 23 Q 125 24 C&AG’s Report, Figure 18, para 3.18 25 C&AG’s Report, paras 3.6 and 3.7 26 Qq 121, 128–129 16 Child Maintenance maintenance (around 1 in 3) than it does for its other service areas.27 It told us that one reason for this is that child maintenance “is an area where people are more likely to complain because of the nature of the situation” and that “people are more likely to complain, because you have two customers”.28 If a customer does not agree with the Department’s decision not to uphold a complaint, they can complain to the Independent Case Examiner (ICE). In 2020–21, CMG accounted for 43% of all complaints investigated and upheld (or partially upheld) by ICE (208 of 484). This was more than for all working-age benefits combined (189), and almost three times those relating specifically to Universal Credit (73).29 Given the high volume of complaints, we asked the Department whether it was satisfied that its complaints procedure was getting things right and that customers were being fairly treated. It told us that it was “very happy” with the way that it handled complaints, and was “absolutely confident” in the way complaints were handled. It recognised, however, that the rate of upheld complaints was higher than for any of its other services and said that it was not complacent and would be working to improve this.30 Supporting survivors and victims of domestic abuse and coercive control
18The Department designed the current child maintenance system to emphasise collaboration between parents, with the...
Recommended (the committee's words)
The Department designed the current child maintenance system to emphasise collaboration between parents, with the CMS available as a voluntary safety net for those separated parents to choose to use if they decide to.31 Written evidence from the Domestic Abuse Commissioner referred to the Department’s data suggesting “a strong prevalence of domestic abuse among receiving parents accessing the CMS”.32 Around two in three applicants to the CMS in the quarter ending September 2021 did not have to pay the application fee because they reported that they or their child had experienced domestic abuse.33
19Parents can use the child maintenance system to continue to abuse their former partners, for...
Recommended (the committee's words)
Parents can use the child maintenance system to continue to abuse their former partners, for example by withholding payments or access to children. Written evidence from Gingerbread and the Domestic Abuse Commissioner set out that, for survivors of domestic abuse, the CMS may be the safest and only way to secure maintenance from their ex-partner.34 However, although vulnerable and low-income families, those with disabilities, and those with higher levels of parental conflict are more likely to have no arrangement in place, the Department knows little about separated parents without any form of arrangement.35 It does not know how many cases there are in which domestic abuse or coercive control may be a barrier to setting up and maintaining an effective child maintenance arrangement. The Department’s legislation is designed to encourage parents who do use the CMS to use Direct Pay first to encourage collaboration.36 The Domestic Abuse Commissioner told us that it “would encourage caution in any efforts by the CMS to encourage collaboration between receiving and paying parents. It is vital that an emphasis 27 C&AG’s report, para 3.7 28 Qq 129, 131 29 Qq 129–131; C&AG’s Report, paras 3.7, 3.9 30 Qq 128, 131 31 C&AG’s Report, para 1.19 32 CMS 0044, written evidence submitted by the Domestic Abuse Commissioner, 22 March 2022. 33 Department for Work & Pensions, National Tables Child Maintenance Service Statistics data to September 2021, Table 2 34 CMS 0042, written evidence submitted by Gingerbread, 22 March 2022; CMS 0044 35 Q42; C&AG’s Report, paras 1.22, 1.24, 2.11 and 2.13 36 C&AG’s Report, paras 2.9–2.12 Child Maintenance 17 on collaboration does not lead to CMS staff failing to hear concerns from victims and survivors about the risks the perpetrator poses to them and their children.”37 It further cautioned that Direct Pay arrangements can increase the harm and risk to victims of domestic abuse because they have to ask the perpetrator directly for payments.38
20We asked the Department how it ensured that its approach to monitoring child maintenance cases...
Recommended (the committee's words)
We asked the Department how it ensured that its approach to monitoring child maintenance cases was properly identifying and addressing cases of domestic abuse and coercive control, rather than waiting to be alerted through non-payment or through the receiving parent raising concerns, especially when they might not be in a position to do so. We were particularly concerned to hear of cases where parents reported that their relationship with the other parent had deteriorated as a result of them requesting a review of their finances. The NAO reported that the Department does not monitor the experiences of all customers of its Direct Pay service. The Department acknowledged that there were customers with whom it would not engage regularly.39 The Department also does not routinely contact customers after they have stopped using the CMS and therefore does not know whether domestic abuse and coercive control was a factor in that decision, or the long-term impact of the CMS on their relationship. It told us that “there is an equal amount of evidence—or more, even—of a family closing a case because it is actually working for them now and they do not need the service any longer as it has brought them together and the arrangements are working for them”.40 However, a Departmental survey found that 13 months after their Direct Pay calculation, 19% of parents had left the CMS and had no form of maintenance at all.41
21The Department told us that it provided specific training for staff to identify domestic abuse...
Recommended (the committee's words)
The Department told us that it provided specific training for staff to identify domestic abuse and coercive control, and that it could put in place controls to avoid contact with the paying parent (such as non-geographic bank accounts). It explained that it also had a “six-point domestic abuse plan for any threat of danger”.42 However, stakeholders sent us evidence suggesting a lack of awareness, understanding and responsiveness on the part of the CMS. Gingerbread told us that 90 per cent of respondents to its survey who reported being subject to ongoing coercive control, did not feel that CMS staff had shown awareness of their situation in how they had responded to them. Families Need Fathers told us that “CMS is driving conflict amongst many parents to the detriment of their children”.43 An individual parent who wrote to us felt that the ex-partner’s attitude towards her had deteriorated significantly because she asked for a review of his finances.44 37 CMS 0044, para 16 38 CMS 0044, para 13 39 Qq 42–43; C&AG’s Report, paras 2.11–2.13 40 Q 9 41 C&AG’s Report, para 2.11 42 Q 39 43 CMS 0042, para 3.14; CMS 0044, para 8; CMS0037 written evidence submitted by Families Need Fathers, 22 March 2022, para 10 44 Q 40; Written Evidence CMS0009, Anonymised, 22 March 2022 18 Child Maintenance 3 Cost and effectiveness of administering child maintenance Enforcing maintenance payments
22The Department’s legislation for child maintenance is designed to encourage parents to use Direct Pay...
Concluded (the committee's words)
The Department’s legislation for child maintenance is designed to encourage parents to use Direct Pay first, but around half of Direct Pay arrangements are either not sustained or not effective. The Department told us that it preferred parents using its CMS to have a Direct Pay arrangement as it believed this created a more positive environment for co- parenting. The Department charges fees for its Collect & Pay service to encourage parents to try Direct Pay arrangements first. Under child maintenance legislation, unless both parents agree to start on Collect & Pay, there must be clear evidence that the paying parent is unlikely to pay voluntarily in order to use Collect & Pay. As a result, 90% of separated families using CMS start with Direct Pay. However, only 58% of parents responding to a Department survey 13 months after their Direct Pay calculation were still on Direct Pay, of which 16% did not receive the full amount of maintenance.45 Receiving parents who indicated that they would have preferred to start on a Collect & Pay arrangement were much less likely to have an effective Direct Pay arrangement.46
23We asked the Department why it was taking so long to identify missed payments and...
Concluded (the committee's words)
We asked the Department why it was taking so long to identify missed payments and transfer customers onto Collect & Pay.47 The Department informs parents that they should get in touch if their Direct Pay arrangement fails but some do not, for example because they are concerned about causing an issue with the other parent. The Department does not monitor whether payments are made, but does send reminders to the receiving parent, three months after they start (by text) and at each annual review, to prompt them to contact the Department if their Direct Pay arrangement is not working. Meanwhile, however, unpaid maintenance arrears can build up. On average, paying parents moving onto Collect & Pay from Direct Pay in the quarter ending September 2021 owed £1,100, around five months’ worth of maintenance.48 The Department accepted that it needed to go further to identify non-paying Direct Pay cases, and told us that its digital transformation programme should allow it to spot cases more quickly. The Department told us that its new online system made it easier for parents to report that they had not received a payment, and that digitalisation would also provide more opportunities to transform its processes; for example, it can increase the use of its My Child Maintenance account to nudge parents on Direct Pay to report non-payment.49
24The Department has improved its enforcement of maintenance on Collect & Pay arrangements, but many...
Recommended (the committee's words)
The Department has improved its enforcement of maintenance on Collect & Pay arrangements, but many parents receive less than they are entitled to. Compliance rates on Collect & Pay have risen from under one-third (31%) of paying parents contributing more than 90% of ongoing maintenance due in the quarter ending March 2016 to around half (49%) in the quarter ending September 2021. The Department has also sped up some of its internal processes designed to enforce compliance. Despite this, many parents still receive less than they are entitled to. The Department does not record how long it takes customers to complete all the stages of its collection and enforcement processes and, for some 45 Q59; C&AG’s Report, paras 19–20 46 Qq 63 and 64; C&AG’s Report, para 2.12 47 Q 61 48 Qq 60 - 62; C&AG’s Report, paras 2.12–2.13 49 Qq 59, 62 Child Maintenance 19 receiving parents, it can take years for the Department to successfully enforce payments. As at September 2021, 7% (11,500) of paying parents with an ongoing arrangement had not paid any maintenance in more than 12 months whilst on Collect & Pay.50
25There are several reasons why enforcing payments can take a long time.
Recommended (the committee's words)
There are several reasons why enforcing payments can take a long time. For example, the Department can be slow to start civil enforcement activity where other attempts at collection have failed. As at September 2021, only around one-third (34%) of paying parents on Collect & Pay with ongoing maintenance arrangements who had not contributed for more than six months were being dealt with by the Department’s Enforcement Team.51 Many of the Department’s enforcement processes are set out in legislation and require action by external bodies. The Department told us that it wanted to further speed up its enforcement processes, but that “some of the points in the process are in other people’s hands.” For example, it explained that it needed to secure a liability order to move forward with civil enforcement and that in order to do this, it needed to secure court time. The Department confirmed that it was working towards ironing out these systemic delays.52 However, the NAO found that enforcement of arrears does not ensure ongoing compliance, and that even where CMS enforces the collection of unpaid maintenance the Paying Parents miss further payments in the meantime and end up owing £400 more than before the enforcement action started.53
26We asked the Department what use it was making of its enforcement powers.54 Parliament granted...
Recommended (the committee's words)
We asked the Department what use it was making of its enforcement powers.54 Parliament granted the Department additional enforcement powers in December 2018 and July 2019. The Department accepted that it has “a set of enforcement powers that are probably among the strongest in the world”, including the power to suspend driving licenses and passports, and in the most extreme cases prison sentences.55 Between January 2020 and September 2021 in England and Wales, the Department secured six suspended disqualifications from driving, no (immediate or suspended) passport confiscations and five immediate prison sentences.56 The Department told us that to suspend passports or driving licences it had to demonstrate to a court that the customer could pay within six months. It explained that “all sanctions are deterrents” and that this was enough in a very large number of cases as “something like 80% of these cases get settled before they go to court”..57 The Department committed to supplying us with details of the number of cases that had been settled as a result of the threat of sanction rather than the sanction having to be used.58
27Low-income paying parents are more likely to build up child maintenance arrears than those who...
Recommended (the committee's words)
Low-income paying parents are more likely to build up child maintenance arrears than those who are higher paid: 46% of paying parents using the CMS did not earn enough to pay income tax (£12,570 in 2021–22), but these parents represented 62% of those with arrears as at March 2021 .Alongside making enforcement more challenging, we received written evidence from a number of non-resident parents who told us about distress and hardship they had experienced being asked for amounts they considered to be 50 C&AG’s Report, paras 21–22, 2.20 51 Q66; C&AG’s Report, para 2.20 52 Qq 70, 73–74 53 Qq 69–70; C&AG’s Report, para 2.22 54 Q 67 55 Q 32; C&AG’s Report, para 2.15 56 Q76; National Tables Child Maintenance Service Statistics data to September 2021, Table 7_2 57 Q 67 58 Qq 67 and 68; 20 Child Maintenance unreasonable, unfair or inaccurate, as well as unaffordable.59 More than two-thirds (68%) of those parents who are using Collect & Pay, and over a quarter (26%) of parents using Direct Pay, say that it is unaffordable.60
28We therefore asked the Department about the affordability of payments.
Recommended (the committee's words)
We therefore asked the Department about the affordability of payments. The Department explained that its calculations were based on historical income, so “affordability is part of the calculation in that respect”. But it recognised that “the problem then comes when someone’s circumstances change and they no longer have the level of income that was assessed”.61 It explained that, while the amount due going forward may then have been reduced to take into account of the lower income, arrears may have built up that they cannot pay. The Department told us that, in response, “we just have to take a monitoring approach and keep under review the extent to which their circumstances change”.62
29The amount Paying Parents pay is based on a means tested calculation set out in...
Recommended (the committee's words)
The amount Paying Parents pay is based on a means tested calculation set out in primary legislation. This applies different rates above certain earnings thresholds that is higher for those on higher incomes and a flat rate of £7 a week for those with the lowest income. The Department has not updated these earnings thresholds since they were set in 1998. In practice, this means that parents now pay child maintenance on much lower incomes than was originally intended. The Department told us that updating the earnings bands was a policy question, and the bands were considered to still be appropriate when the calculation was last considered as part of new legislation in 2008.63
30In 2011, the Department announced that it would close the old Child Support Agency (CSA)...
Recommended (the committee's words)
In 2011, the Department announced that it would close the old Child Support Agency (CSA) schemes and introduce the CMS. It decided, based on its analysis, that it would not be value for money to attempt to collect all the unpaid maintenance debt on the CSA schemes. The Department reduced the historic CSA debt relating to unpaid maintenance by £2.6 billion between December 2018 and March 2021 after deciding to largely write it off.64 Gingerbread, in its written evidence to us, told that it regularly heard from “single parents who were outraged at having debts written off, where the amount owed represented a lifetime of struggling with household budgeting” and that they had heard from resident parents who were owed more than £100,000.65
31The Department has no long-term strategy for tackling the growing unpaid maintenance balance under the...
Recommended (the committee's words)
The Department has no long-term strategy for tackling the growing unpaid maintenance balance under the current CMS scheme. Unpaid maintenance owed to parents on Collect & Pay has increased by more than £1 million per week to a total of £440 million as at October 2021.66 We therefore asked the Department how it planned to address the increasing arrears balance within the scheme. The Department told us that “a lot of it is already in payment” and it is “not giving up on getting all of it”.67 However, the NAO reported that no payment was made against around four-fifths (79%) of this debt in September 2021. It concluded that, unless the Department writes off more of the debt, outstanding arrears will grow to £1 billion by March 2031 at current rates, and indefinitely 59 Written evidence CMS0007, anonymised; Written Evidence CMS0040, anonymised; Written evidence CMS 0030, anonymised 60 C&AG’s Report, para 23.2.23 61 Q 79 62 Q 79 63 Q 80, 82; C&AG’s Report, para 2.3, 2.24 64 C&AG’s Report, paras 15, 1.16 65 CMS 0042 66 C&AG’s Report, paras 25, 2.29 67 Qq 85–86 and 88 Child Maintenance 21 thereafter.68 The Department told us it expected investment in transforming its services to give it 15% more capacity to focus on compliance. However, even if compliance rates improve the Department will only delay the date the level of unpaid maintenance reaches £1 billion to 2033–34.69 The Department also told us that it expected only a minority of debt to fall into a category it described as “at the moment, we can’t see how the parent can pay and we’re just keeping a watching brief.” However, the Department does not currently have legal authority to write off uncollectable CMS arrears and has yet to decide how to treat cases which it has identified where the money owed is ‘potentially uncollectable’ because it has exhausted its enforcement options.70 Fraud and error in maintenance payments
32The Department has improved the accuracy of its maintenance calculations.
Concluded (the committee's words)
The Department has improved the accuracy of its maintenance calculations. The National Audit Office’s estimate of the financial impact of the Department’s errors fell from 2.17% of the monetary value of maintenance in 2015–16 to a record low of 0.65% for 2020–21.71 The Department said that it “would obviously want to go even further than that”.72 The Department designed CMS to reduce the risk of customer fraud and error. In 91% of cases, the Department says that it can legally rely on historical earned-income data from HMRC or benefits data to calculate the maintenance. Nonetheless, child maintenance is still vulnerable to certain types of customer fraud and error where the Department cannot rely on historic tax records. For example, under current legislation, unearned income, such as dividends, would not be considered unless there was a ‘variation request’ from the receiving parent. Customer fraud and error can also occur where either parent misstates their personal circumstances, such as the number of other children they are responsible for.73
33The Department refers cases of suspected fraud to its Financial Investigations Unit (FIU) to assess...
Recommended (the committee's words)
The Department refers cases of suspected fraud to its Financial Investigations Unit (FIU) to assess the accuracy of the award. Its FIU detected 1,400 cases involving fraud in 2020–21 and increased the child maintenance owed by £10.9 million.74 The Department relies almost entirely on parents to detect child maintenance fraud. It told us that its “most fruitful references come from the receiving parent, often because it is the receiving parent who knows an awful lot about the paying parent’s situation and financial affairs as they chase things down” but that this was not its only route to detect fraud as it could pick this up through casework.75 However, the NAO found that in reality nearly all the Department’s referrals to its child maintenance FIU team come from receiving parents challenging the value of the assessment through the variation process. The NAO identified several reasons why a parent may not challenge the value of an assessment, such as not knowing enough about the other parent’s circumstances or not having access to the level of credible information required to substantiate a challenge, and that there may be other barriers, such as domestic abuse or financial control, that would prevent the parent from contacting the Department regarding suspected fraud.76 68 Qq 85–87; C&AG’s Report, para 25 69 Q 98; C&AG’s Report, para 2.28 and Figure 14 70 Q 86; C&AG’s Report, para 2.29 71 Q59; C&AG’s Report, paras 2.4 and 2.8 72 Q126 73 Q53; C&AG’s Report, para 2.6 74 C&AG’s Report, para 2.7 75 Q 53 76 C&AG’s Report, para 2.7 22 Child Maintenance
34The Department cannot currently demonstrate that its approach to fraud and error within child maintenance...
Recommended (the committee's words)
The Department cannot currently demonstrate that its approach to fraud and error within child maintenance is proportionate as it has not assessed the risk or level of actual fraud and customer error within child maintenance as would be required if it was public expenditure.77 The Department reassured us that, despite this, it does not treat tackling child maintenance fraud (where children often suffer as the end user) with any less enthusiasm than it does tackling fraud against the taxpayer. It told us that it “will look at what more we can do” to tackle child maintenance fraud.78 The Department has already consulted on some legislative changes to the way that child maintenance is calculated, including taking into account certain types of unearned income that it can pick-up readily from HMRC (so a ‘variation request’ from the receiving parent will not be required).79 It also told us that “data analytics is another source where we can potentially do more”, including making better use of intelligence sharing across government.80 Cost savings and transformation
35The Department has reduced the gross cost of administering child maintenance by £132 million (27%)...
Concluded (the committee's words)
The Department has reduced the gross cost of administering child maintenance by £132 million (27%) from £497 million in 2011–12 to £365 million in 2020–21. In real terms, this is equivalent to a £242 million (40%) reduction at 2020–21 prices. This is broadly in line with the 47% fall in caseload over the same period. It reduced its net funding requirement by £172 million (from £494 million to £322 million) across the same period, which is £40 million more than the reduction in gross costs because of the introduction of charging. However, the £322 million funding required (after counting income from fees, charges, and other sources) in 2020–21 remained substantially higher than the Department had expected it to be in that year. The Department forecast in its business cases that it would reduce the cost of administering the scheme to be £234 million in 2013 and £258 million in 2015.81 The Department told us that planned savings have been delayed because its closure of the 1993 and 2003 schemes took longer than expected. The Department has also not achieved the efficiencies it expected in the cost of administering each £1 of maintenance collected and arranged through CMS. It forecast this would improve from 35p per £1 in 2011–12, to 25p per £1 by 2018–19 (before investment costs and income). However, by 2020–21 the cost had risen to 36p per £1 collected and arranged. The Department told us that this was due to the delays in delivering overall cost savings, and because its customer caseload was now more concentrated on the more complex and most difficult cases.82
36The Department told us that its Transformation programme should reduce costs and improve payment compliance...
Concluded (the committee's words)
The Department told us that its Transformation programme should reduce costs and improve payment compliance by digitalising processes and allowing its staff to move from case maintenance into enforcement activities.83 It expected CMS transformation to be complete by financial year 2024–25, at a cost of more than £30 million to save an estimated £151 million.84 The Department told us that it also planned to make wider improvements to its customer service through its transformation programme. The Department accepted that over the last two years, due to the impact of the COVID-19 pandemic, its service “has not been where we have wanted it to be.” However, it told us that its services are “certainly 77 C&AG’s Report, para 2.8; HM Treasury, Managing Public Money, para A.4.9.2, May 2021 78 Q 58 79 Qq 34 and 54 80 Qq 56 and 58 81 C&AG’s report, paras 3.2–3.3 82 Q 117; C&AG’s Report, para 3.4 83 Qq 117 and 122 84 Q97; C&AG’s Report, para 3.13 Child Maintenance 23 back on track” and that they were “without a doubt” going to get better.85 The Department told us that was seeking to “modernise the service, bringing far more digital services to customers that are easy to access and allow them to do some of the simpler things themselves” and “to capture better data, which will allow us to take different treatment solutions to different behaviour, rather than the one-size-fits-all approach.”86 However, it recognised “that not everyone has the bandwidth, the ability or the access” to use online services and provided reassurances that its telephone channel will always still available.87 85 Qq 120 and 121 86 Qq 97 and 98 87 Q119 24 Child Maintenance
Evidence
Oral evidence sessions 1
- 16 Mar 2022Child Maintenance3 witnesses, listed belowparliament.uk ↗
Who gave evidence 3 witnesses
- Arlene SugdenDirector Child Maintenance Service, Department for Work and Pensions
- Hilda MasseyDirector Child Maintenance and Devolution Policy, Department for Work and Pensions
- Peter SchofieldPermanent Secretary, Department for Work and Pensions