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.
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.
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.
There is a high prevalence of histories of domestic abuse in the statutory child maintenance caseload. Abuse, control and coercion can continue even when a relationship has ended. 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. We recommend all frontline CMS staff be given training on identifying and understanding domestic abuse and that parents with care in registered cases of domestic violence, or when it has been identified by CMS staff, should be able to proceed directly to the Collect and Pay service without charges.
A high proportion of former CSA cases have not entered the CMS or been resolved by effective family-based arrangements. Families in these circumstances are disproportionately likely to be in the most vulnerable groups. We are concerned that many single parent families are simply slipping through the safety net. While amicable separations are typically self-managed, parents seeking the assistance of the state are likely to be those struggling to access support for their children. The CMS must seek to assist those families in difficulty. 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.
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. Too many non-resident parents get away with prioritising second families, or worse still themselves, over children from a previous relationship. We understand that it is not cost-effective for the Government to pursue every case of arrears but it has made no clear statement of which cases it intends to take up. 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 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. We further recommend it informs parents with care if their arrears-only case will not be pursued.
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 is, however, tentative in deploying its extensive enforcement 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. The CMS ought to strike fear into would-be evaders of parental responsibility and must take a stronger approach to enforcement. We recommend it 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.
Unfortunately a minority of parents want to avoid paying fair child maintenance. Some use self-employment loopholes, creative accounting or fraudulent tax returns in order to do so. Such cases are often not a high priority for HMRC so we therefore welcome the creation and expansion of the DWP Financial Investigations Unit. Its reliance on tax return information will not, however, be sufficient to solve the problem of parents hiding income to minimise their liability. The trend towards greater self-employment means this problem is only likely to grow. We recommend that the Department reinstate provisions for parents to challenge child maintenance awards on the grounds of assets and lifestyle inconsistent with income.
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. We further recommend that a small HMRC investigation team be embedded in the Financial Investigations Unit to work in tandem with the CMS, given the shared interest: child maintenance cheats are very often tax cheats too.
28 April 2017