Children in poverty: Child Maintenance Service

1 Introduction and the child maintenance landscape

1. This Report is the third and final in a series of our Committee’s inquiries into child poverty. In this Report we focus on the role of the Child Maintenance Service in tackling child poverty. Our first Report looked at Child Poverty: Measurements and targets¹ and the second considered child poverty in the context of No Recourse to Public Funds.²

2. Child maintenance can play a vital role in lifting children in separated families out of poverty and there are a substantial number of children in such families. The Department for Work and Pensions estimated that there were 2.3 million separated families, with 3.6 million children in those separated families in Great Britain in the financial year ending March 2021.³ There are approximately 1.87 million single-parent households with dependent children (which represents around 23% of families with such children).⁴ The poverty rate of children in such households is higher than children in couple-parent families; in 2021–22, 44% of children in single-parent households were in poverty (based on 60% median income after housing costs) compared to 25% for children in couple-parent families.⁵ The Department’s own statistics estimated that receiving parents in separated families received £2.4 billion annually in child maintenance payments in each of the three financial years ending 2019 to 2021, which resulted in an estimated 100,000 children living in households which were “moved out of absolute low-income each year (on average) from 2018/19 to 2020/21 on a before-housing costs basis.”⁶

3. On 18 May 2022 we launched an inquiry into the Child Maintenance Service in order to assess the effectiveness of the Child Maintenance Service in tackling child poverty and how the CMS could more effectively support separated families in making effective arrangements. Our terms of reference asked a number of questions, including:

• How many children in the UK live in separated families? What proportion of these children are living in poverty?
• What prevents parents from establishing family-based arrangements?
• What barriers are there for parents when trying to access support from Child Maintenance Service?
• How can DWP improve the CMS to better support children living in poverty?⁷

4. Over the course of our inquiry we have published 26 pieces of written evidence and held four oral evidence sessions. We also held an engagement event on Monday 16 January in Manchester consisting of separate roundtable discussions with non-resident parents (paying) and resident (receiving) parents—a summary of our discussions in these roundtables is annexed to this Report. We are grateful to everyone who contributed to our inquiry.

Our Report

5. In this Report we analyse the effectiveness of the current system for child maintenance, paying particular attention to matters relating to the effectiveness of enforcement and the affordability of maintenance calculations. Our Report is structured in the following way:

• This Chapter provides an overview of what Child Maintenance is and recent developments including: The National Audit Office’s report on the Child Maintenance Service (CMS); the Public Accounts Committee report; and the recently published Independent Review of the Child Maintenance Service’s Response to Domestic Abuse and the Government response to that review;
• Chapter 2 recounts evidence we have received from the perspective of receiving parents. Matters considered within that Chapter include domestic abuse and coercive control, effective enforcement and fraud, and take-up gaps;
• Chapter 3 analyses submissions we have received from the perspective of paying parents. Within this Chapter we look at the affordability of maintenance assessments and employment incentives, the potential of the system to incentivise conflict, as well as the accuracy of assessments; and
• Chapter 4 considers matters relevant to both parent groups, specifically Collect and Pay fees and customer service.

The Child Maintenance Service and recent developments

Child maintenance and the CMS

6. Child maintenance refers to an agreement between parents covering how they support their children when they have separated. The Child Maintenance Service is responsible for overseeing statutory child maintenance arrangements. Under the current regime, there are three ways child maintenance can be delivered:

• Family-based arrangements, in which the parents privately make arrangements. Such arrangements do not necessarily consist solely of cash transfers, they could include, for example, that one parent covers certain costs, such as school uniforms. The CMS has no involvement in family-based arrangements and cannot “enforce” them if they cease being effective.
• Direct Pay, in which the Child Maintenance Service calculates the maintenance due based on a statutory framework and arranges a payment schedule, at which point the parents privately arrange the payments between themselves. There is an initial £20 application fee and the CMS has no further role to play. If a Direct Pay arrangement proves ineffective, it may move to a Collect and Pay arrangement. The application fee for Direct Pay is waived in cases of domestic abuse, including where the child has been a victim of abuse, and under 19s. As of March 2022, there are approximately 513,800 children covered by Direct Pay arrangements.
• Collect and Pay, in which the CMS calculates the maintenance due and collects and transfers maintenance from the paying to the receiving parent. Collect and Pay attracts a collection fee, with the paying parent paying an additional 20% fee on top of the maintenance, while the receiving parent forgoes 4% of the maintenance collected. If maintenance due under Collect and Pay is not voluntarily paid, the CMS can take various enforcement measures. As of March 2022, there are 292,400 children covered by Collect and Pay arrangements.⁸

Direct Pay and Collect and Pay are “statutory arrangements”. It is also possible for families to decide to have no arrangement. A summary of the role of the Child Maintenance Service is provided in Figure 1.

Source: Separated families statistics: April 2014 to March 2021, Department for Work and Pensions, March 2022

7. The current system, administered by the Child Maintenance Service, was introduced in a reform package in 2012. The CMS replaced the Child Support Agency, a body widely recognised as not delivering for children, parents and the taxpayer.⁹ The reforms establishing the Child Maintenance Service involved a substantial policy shift towards encouraging co-operation and the making of private, family-based arrangements, between parents.

8. Table 1 summarises the changes in the proportion of families with arrangements (family-based; statutory and no arrangement).

Table 1: proportion of separated families with arrangements

	Figures for 2011–12 (pre-reforms)	Figures for 2019–20 (from NAO report)	Department’s figures for 2020–21
Family-based arrangements	29%	38%	40%
Statutory arrangements	46%	18%	19%
No arrangement	25%	44%	40%

Source: National Audit Office, Child Maintenance, figures 24 and 25; Separated families statistics: April 2014 to March 2021

How child maintenance is calculated

9. The rates of child maintenance payable by the paying parent to the receiving parent, which are set out in primary legislation, are shown in Table 2. These calculations are based on a paying parent’s gross income.

Table 2: Percentage of gross weekly income paid

Rate of child maintenance	Gross weekly income	1 child	2 children	3+ children
Basic Plus	£800–£3,000	Basic rate and then 9% on income above £800	Basic rate and then 12% on income above £800	Basic rate and then 15% on income above £800
Basic	£200–£800	12%	16%	19%
Reduced	£100.01–£199.99	Reduced rate at £7.00 for the first £100.01 of income then 17% for the remainder	Reduced rate at £7.00 for the first £100.01 of income then 25% for the remainder	Reduced rate at £7.00 for the first £100.01 of income then 31% for the remainder
Flat	£7–£100*	£7	£7	£7
Nil	Less than £7	£0	£0	£0

Source: Independent review of the Child Maintenance Service (CMS) response to domestic abuse, Table after para 225

The level of child maintenance liability can be reduced in the event of “shared care” i.e. when the child stays overnight with the paying parent. The maintenance liability is reduced depending on the number of nights the child spends with the paying parent (as long it is 52 nights or more a year).¹⁰ In instances where “day-to-day” care (which is not defined in regulations) is equal for both parents, the regulations say that no maintenance is payable.¹¹

Recent developments in relation to child maintenance

The National Audit Office report

10. The National Audit Office published a report into the Child Maintenance Service on 3 March 2022. It recounted the following objectives for the reforms that created the Child Maintenance Service:

• increase the number of effective maintenance arrangements for children who live apart from one or both of their parents;
• increase the number of separated parents with an effective voluntary maintenance arrangement (a family-based arrangement); and
• reduce dependency on the state through a smaller, more efficient CMS.¹²

The report’s conclusions indicated that there had been mixed success in meeting the objectives, highlighting that:

• There had been no clear change in the number of effective child maintenance arrangements;
• Parents were relying less on the State to make arrangements, the number of family-based arrangements had risen and statutory arrangements fallen but there had also been an increase in the number of families with no arrangement;
• The Department’s research did not explain why take-up of the CMS was lower than expected;
• Around half of new Direct Pay arrangements were either not sustained or ineffective;
• Enforcement of maintenance payments had improved but there was scope to go further. While Enforcement of Collect and Pay had improved, at least half of paying parents on Collect & Pay still do not pay, pay less than they should, or pay late;
• The rules for calculating child maintenance rules had not been updated and did not align with the Department’s broader aims on employment and in-work progression. For example, some people seeking work faced an effective marginal tax rate of 100%; and
• The reforms improved value for money by reducing the cost to the taxpayer but this had not led to the establishment of a greater number of effective maintenance arrangements.¹³

The Report of the Committee of Public Accounts

11. The Committee of Public Accounts published a report on the CMS in June 2022. Concerns raised by that Committee included:

• a lack of integration of the Child Maintenance Service with other public services;
• The Department’s “insufficient curiosity” on the reasons for the take-up gap;
• The CMS system not being designed to protect survivors of domestic abuse or coercive control;
• The sluggish pace of enforcement action and the Department not taking “responsibility for detecting child maintenance fraud”; and
• The system risks creating a “parent poverty trap” for paying parents.¹⁴

12. The Treasury minute response was published on 14 October 2022. The Government grouped PAC’s recommendations into ten recommendations, out of the ten recommendations made by the PAC, six were rejected and four were accepted by the Government.¹⁵ Many of the points raised in PAC’s report echo points that we heard during the course of our inquiry.

The independent review of the Child Maintenance Service response to domestic abuse

13. An independent review was commissioned following the tragic death of Emma Day, who was murdered on 25 May 2017 by the father of her youngest child after she made a claim for child maintenance. That review, formally commissioned in October 2021, was led by Dr Samantha Callan and assessed the effectiveness of the framework by which CMS provides support and assistance to customers experiencing domestic abuse. The review also considered the extent to which policies and practices of the CMS exacerbated, or even initially provoked domestic abuse.¹⁶ Both the review and the Government’s response were published on 17 January 2023.¹⁷

14. Table 3 summarises the recommendations from that report and the Government’s response to them.

Table 3: Recommendations of the Independent Review and Government response

Recommendation	Government response
Recommendation 1: Amend primary legislation to prevent Direct Pay being used as a form of coercion and control by perpetrators. CMS should consider accepting the same standards of evidence of abuse as would be accepted for legal aid in private family law disputes.	Accept: Further work needed to assess the standards of evidence that can be accepted within CMS operational capacity
Recommendation 2: Ensure the CMS has adequate legal powers to address financial coercion. CMS should explore how best to use new powers within domestic abuse legislation to support the prosecution of cases of financial abuse in the context of a maintenance arrangement.	Accept
Recommendation 3: Removal of the requirement to report domestic abuse to qualify for the application fee waiver. It does not operate in line with statutory guidance, is not always enforced, and research shows that fewer than one-fifth of survivors report domestic abuse, often due to fears for their safety.	Accept
Recommendation 4: Pilot single named caseworkers for complex domestic abuse cases as the requirement for survivors to keep recounting their history of domestic abuse to different call handlers can be traumatising.	Accept
Recommendation 5: Address issues of affordability of liabilities for low-income paying parents. The review recommends legislative reform to address issues previously raised by the Social Security Advisory Committee about the affordability of liabilities. Perceptions of unfairness can exacerbate abuse.	Accept
Recommendation 6: Cross-government coordination of early intervention outside the CMS. The review recommends an early intervention system outside (but linked to) the CMS where parents are helped to resolve conflict (i.e., via referrals to sites such as Family Hubs and Separated Parent Information Programmes).	Accept
Recommendation 7: Removal of nil rate for child maintenance for convicted prisoners. This recommendation is in line with Ministry of Justice reviews that recommend the strengthening of prisoner family ties to prevent re-offending, as well as aligning with the Prisoner Earnings Act that requires prisoners on enhanced earnings to pay child maintenance.	Accept ‘in principle’ The requirement for prisoners to pay maintenance already exists in legislation. We propose exploring what more can be done through administrative measures.
Recommendation 8: Update the maintenance calculation formula to include both parents’ income. The review finds that the inclusion of only one income in the calculation is increasingly untenable and its perceived unfairness can drive conflict and abuse.	Decline at the present time, whilst we continue to explore options. Our response to this recommendation is encapsulated in our response to Recommendation 5. A review of the affordability of child maintenance will include an assessment of the scope to include both parental incomes in a maintenance calculation.
Recommendation 9: Include a broader range of agencies in CMS training. The review proposes that a wider range of agencies, including those specialising in men’s perspectives, should be included in CMS training.	Accept
Recommendation 10: DWP to produce an Implementation Plan with a specifically tasked team within the Civil Service to take forward the recommendations with a remit to report directly to the Independent Reviewer.	Decline. (The Government said in its Response that it “does not intend to take forward the recommendation as outlined in the Review, although we recognise the importance of developing clear plans for implementation – with clear objectives and timelines – we do not intend to extend CMS accountability in this way. Therefore, the monitoring of progress and implementation of the recommendations will form part of ‘business as usual’ policy work undertaken by the Department for Work and Pensions.”)

Source: Government response to the independent review of the Child Maintenance Service response to domestic abuse, January 2023

Legislative developments

15. There are currently two relevant Private Members’ Bills before Parliament:

• The Child Support Collection (Domestic Abuse) Bill provides a legislative mechanism for domestic abuse cases to move straight to Collect and Pay arrangements; and
• The Child Support (Enforcement) Bill allows for the Secretary of State to make administrative liability orders, increasing the enforcement measures the CMS can take in the absence of court involvement.

16. We welcome the Child Support Collection (Domestic Abuse) Bill and the Child Support (Enforcement) Bill and their aims. We provide information later in this Report on how these pieces of legislation will help improve the effectiveness of the Child Maintenance Service.

2 The perspective of receiving parents

17. For the purposes of this Report we use the terms “receiving parents” and “paying parents”. Receiving parents, also referred to as “resident parents” (RPs), are the parents who take care of the child for the majority of the time. Paying parents, also referred to as “non-resident parents” (NRPs) pay maintenance to the receiving parent.

18. In this Chapter we examine issues that particularly affect the interests of receiving parents, including:

• Enforcement and child maintenance fraud;
• Universal Credit deductions;
• Domestic abuse and coercion; and
• Research and information on take-up gaps.

Enforcement and child maintenance fraud

Compliance rates on Direct Pay

19. Under Direct Pay arrangements, the CMS calculates the maintenance owed and generates a payment schedule but parents privately handle the transfer of funds. There is an initial £20 application fee but no subsequent fees or charges. The CMS has no active role in “enforcing” Direct Pay arrangements. If Direct Pay arrangements prove ineffective, the case may move to Collect and Pay.

20. For some parents, Direct Pay arrangements were positive. Dr Symonds, Senior Lecturer in Social Work with Children and Families, University of Bristol, quoted one paying parent who said “I send my P60 in each year and I get told how much I should pay and it makes it very straightforward.”¹⁸

21. Not all parents had positive experiences with Direct Pay, however. Gingerbread, a charity for single parent families, highlighted “unclear thresholds for enforcement” and that the “hands-off system compounded by poor administration, places the burden of responsibility for pushing for Direct Pay enforcement onto receiving parents.”¹⁹ They argued that the system created two key problems: first, parents felt the onus was on them to raise with DWP if their arrangement had broken down and secondly, because the Department did not actively monitor or measure the effectiveness of Direct Pay arrangements, it could only comment on the amount due through the system, not the amount actually paid. Overall, this created “opaqueness” in the system.²⁰

22. The Department does not actively track compliance with Direct Pay but sends reminders to receiving parents to get in touch if Direct Pay arrangements are not working. The NAO found that “around half of new Direct Pay arrangements are either not sustained or not working,” with £40 million known arrears under Direct Pay.²¹ The NAO recommended that the Department should:

• Continue to regularly survey separated families with Direct Pay arrangements and publish a regular estimate of the effectiveness of the arrangements and whether the arrangements continue; and
• Set out how, as part of its digitalisation and modernisation plans, it will continuously improve its communication with Direct Pay customers to help them report missed payments, help prevent Direct Pay arrangements from failing, or, where this is not possible, to promote faster transfers to Collect & Pay arrangements where appropriate.²²

23. While it may seem clear that receiving parents would have a strong incentive to report to the CMS that their Direct Pay arrangement was not effective, some do not because, for example, they do not want to irritate the paying parent or “upset the apple cart”.²³ On average, cases that moved from Direct Pay to Collect and Pay in the Quarter ending September 2021 did so with £1,100 in unpaid maintenance.²⁴

24. One of the purposes of the reforms introducing the Child Maintenance Service was to increase the number of effective arrangements between parents. There is a paucity of data on how many Direct Pay arrangements are effective, which in turn obscures the level of child maintenance not being paid. This inhibits the ability of the Department to demonstrate the ability of the system to meet policy objectives. The Department should proactively monitor the effectiveness of Direct Pay arrangements and report regularly on the number of such arrangements that are effective. An initial survey should take place no later than six months after the Direct Pay arrangement has commenced. Surveys should then take place at regular intervals, at least once every 12 months.

25. Cases moving from Direct Pay to Collect and Pay appear to have substantial arrears on average. The Department should more systematically and swiftly move ineffective Direct Pay cases into Collect and Pay. To do this, the Department should consider imposing a change to how cases are moved to Collect and Pay so that is triggered by child maintenance arrears reaching half of the current average arrears.

Compliance rates on Collect and Pay

26. For the quarter ending March 2022, of the 164,500 Paying Parents who were due to pay via the Collect and Pay service:

• 60,700 (37%) paid no maintenance;
• 103,700 (63%) paid some maintenance, of which:
  • 33,000 (20%) paid up to 90% of the maintenance due for the quarter
  • 70,700 (43%) paid over 90% of the maintenance due for the quarter.²⁵

The proportion of paying parents paying some maintenance has been trending upwards. Longer-term trends in the level of payment on Collect and Pay are represented in Figure 2, taken from a 2022 National Audit Office report. These figures do not include arrears payments. The NAO explained that the Department “monitors the proportion of paying parents paying 90% as opposed to 100% of ongoing maintenance because, for paying parents paying on a monthly basis, the amount charged differs depending on the number of days in the month. However, in practice, the Child Maintenance Service (CMS) asks paying parents to pay a fixed amount each month. Therefore, a paying parent could pay more than 100% of the liability charged in respect of months with less than 31 days and less than 100% in respect of months with 31 days.”

Source: National Audit Office, Child Maintenance, Session 2021–22, HC 1139, 3 March 202

Enforcement of Collect and Pay

27. While the number of parents on Collect and Pay paying some maintenance has increased, approximately half of paying parents do not pay, or pay less than they should. It is therefore unsurprising that frustrations with the effectiveness of enforcement featured prominently in our inquiry, both in evidence and our roundtable discussions. Save the Children UK told us that Collect and Pay was perceived as ineffective by receiving parents:

Most of the parents we spoke with did not use the Collect & Pay system (or some had used it, and then transitioned to Direct Pay). Those who used it did not think it was at all effective. Parents especially raised issues with the fact that they were frequently encouraged to move off Collect & Pay and onto Direct Pay – even when that was totally inappropriate for their circumstances. One parent spoke about being temporarily taken off Collect & Pay when there was a change in the NRP’s circumstances. This change meant her child lost out on money they were due.²⁶

28. Similarly, Gingerbread told us that “We hear consistent complaints via our helpline from receiving parents who have been waiting months, or in some cases years, for complaints to be resolved or effective enforcement action to be taken against the paying parent.”²⁷ One Parent Families Scotland also complained about the effectiveness of enforcement and quoted responses from parents about the system:

CMS did not do enough to enforce payments or arrears when absent father jumped through loopholes to avoid paying child maintenance over many years. They expected me the parent with care to provide evidence to show that the absent father was in work and refused to do anything apart from telephone the absent father upon my request to find out if he was in work.

Had a claim for four years never received a penny, enforcement rules are not upheld and seems to just have been ignored and put aside by CMS.²⁸

Caitlin Logan, the Policy, Research and Influencing Lead at One Parent Families Scotland told us that the speed of enforcement was a particular concern for receiving parents.²⁹ In July 2022 the Department launched a consultation on improving CMS enforcement through the commencement of curfew orders, the consultation closed on 12 August. The Department told us that “Not only will this add to the existing range of strong CMS enforcement powers, but it will also provide more options to ensure the CMS can use the right lever to obtain compliance.”³⁰ We will be interested in how such orders will be implemented and used and their effect on Collect and Pay compliance.

29. The slow pace of enforcement, and the resulting growth of arrears, was also raised by Joshua Reddaway, Director, Work and Pensions Value for Money, National Audit Office:

Enforcement, in particular, is too slow and it does not always work.[…] What we found surprising was that when they are referred to enforcement, people owe £2,200, but once the enforcement action had happened—once some of the arrears that the CMS was targeting were paid back—that person then owed £2,600, so £400 more. How could that possibly be? The simple answer is that they had not paid what they owed in the meantime. You are taking so long to do the enforcement action that you might get the £2,200 they owe but they have now missed £2,600, so you are back to square one and you have to redo this. You get that kind of upward running, never able to get something on a sustainable basis.³¹

Arrears under CMS arrangements have been growing, with £512.6 million being owed as of September 2022 according to DWP statistics.³² The NAO’s report concluded that “the Department has improved its enforcement but there is scope to go further.”³³ The improved compliance on Collect and Pay was partly credited to the Department’s new enforcement processes.³⁴

30. Gingerbread recommended that there should be a:

redoubling of efforts by the DWP to improve compliance through Collect & Pay, including monitoring and reporting against the effectiveness of enforcement actions and coordinating more with family courts to access financial information where non-resident parents are actively seeking to avoid paying maintenance.³⁵

The importance of effective enforcement

31. The effective enforcement of child maintenance is important, with the Department describing child maintenance as being able to play an effective role in lifting children out of poverty.³⁶ It was put to us that if all maintenance due was paid, 60% of children currently not benefiting from maintenance would be lifted out of poverty.³⁷

32. While some cases of child maintenance payments consisted of just flat rate payments of £7 per week, which might not be enough to lift a family out of poverty, Dr Jon Symonds, Senior Lecturer in Social Work with Children and Families, University of Bristol, stressed that it could still be a material sum:

On the issue around £7 a week and whether that is too insignificant a number, for some parents we spoke to who were caring for their children the majority of the time, £7 a week is not enough to lift them out of poverty but it makes a real and material difference to their lives. If you are on very low income anyway, £30 a month does make a difference if you are struggling to manage the bills or food. Whether that is set at the right level or not is a question for policy makers, but to say that it does not make any difference at all and it is not worth pursuing would not be well received by some of the parents we spoke to.³⁸

33. The Child Support (Enforcement) Bill, which had its Third Reading in the Commons on Friday 17 March and is now in the House of Lords, is intended to speed up enforcement by allowing the Secretary of State to make administrative liability orders, which would increase the enforcement options available to the CMS without court involvement.

34. For many receiving parents child maintenance payments are vital to avoiding or at least stymying the effects of hardship but enforcement is currently slow and often ineffective. We have heard that, while enforcement on Collect and Pay has improved, for many receiving parents enforcement remains ineffective in securing maintenance. We support the aims of the Child Support (Enforcement) Bill to allow for more timely enforcement of maintenance payments and regard effective enforcement as remaining a key priority for improvement. In its response to this Report, the Government should set out plans to improve the effectiveness and speed of current enforcement measures.

Fraud

35. The subject of fraud was raised with us in written evidence, with particular concerns around self-employment and the ability of some paying parents to hide or minimise income to deflate reported earnings and therefore maintenance assessments.³⁹ One Parent Families Scotland quoted to us one parent’s concerns about self-employment:

Process doesn’t work when the paying parent owns their own company or is self-employed. There are too many loopholes and most people in these circumstances end up paying based upon min wage. It seems that no matter how strong the evidence is given in variation forms, diversion of income requests is just automatically rejected. In addition, CMS response times are very long, messages and letters get entirely ignored and staff refuse to provide information about how annual review calculations have been calculated.⁴⁰

Christie Odone told us that “anecdotally the deadbeat dad is there and he is fraudulent and he will do anything to avoid paying maintenance… I do not have the statistics, but I do have the anecdotal evidence that it is something that plagues families up and down the country.”⁴¹

Estimating the level of undetected fraud and error in the child maintenance system

36. The National Audit Office report found that the Department had designed the CMS to reduce the risk of error and fraud and that for 91% of cases “it can legally rely on historical earned-income data from HMRC or benefits data to calculate the maintenance”. This point notwithstanding, there are still vulnerabilities for fraud and error, such as where parents misrepresent their personal circumstances or the number of children they are responsible for. A receiving parent can also ask the CMS to consider a paying parent’s more complex earnings, which are more vulnerable to customer fraud and error than calculations based on historical tax records.⁴² The NAO also found that the Department had not estimated the level of undetected customer fraud and error there was in child maintenance, nor could it provide a breakdown of the sources of fraud referrals.⁴³ Arlene Sugden, Director of the Child Maintenance Service, told us that, of the cases taken to financial investigation, 20% came from CMS colleagues and 80% came from receiving parents “generally speaking”.⁴⁴ There are problems with relying on parents to report fraud, as the NAO set out:

• “parents may not know enough about their ex-partner’s circumstances to recognise when they are committing fraud;
• parents may not have access to the level of credible information about the other parent required for the Department to start an investigation;
• the Department told [the NAO] that around 50% of fraud referrals to its Financial Investigations Unit are unfounded and that, in order to safeguard against vexatious claims, CMS requires any claim of fraud to be substantiated with evidence; and
• there may be barriers, such as domestic abuse or financial control, that would prevent the parent from contacting the Department regarding suspected fraud.”⁴⁵

The PAC recommended that the Department should :

• Assess the risk of fraud and error within child maintenance on an ongoing basis;
• Strengthen its controls proportionately in response to issues identified in its assessment of the risk of fraud and error;
• Make better use of available data to strengthen existing controls, for example from departments outside of HMRC; and
• Publish, as part of its annual report on accounts for the Child Maintenance scheme, an annual fraud and error estimate, and target rate, to enable Parliament and the public to monitor its performance.⁴⁶

37. The Department rejected PAC’s calls for an estimate of fraud and error, saying that it had “proportionate and cost-effective controls” and that it “continually reviews its fraud strategy to ensure proportionate controls are maintained.”⁴⁷ For comparison, the rate of fraud and error in the benefit system, excluding the State Pension, was estimated to be 4.7% in 2019–20 (pre-pandemic) and 7.6% (£8.5 Billion) in 2021–22.”⁴⁸

38. Evidence to us has raised particular concern about the fraudulent practices employed by some paying parents to reduce maintenance calculations but the Department has not made an estimate of the level of undetected customer fraud and error within the system. We repeat the Public Accounts Committee’s recommendation that the Department should assess the risk of fraud and error within child maintenance and publish, as part of its annual report and accounts for the child maintenance scheme, a fraud and error estimate and reduction target rates.

39. The Department’s own assessment to the NAO “that around 50% of fraud referrals to its Financial Investigations Unit are unfounded” indicates that the system is not functioning as it should be, and, as we will return to later, demonstrates how conflict is encouraged. The Department currently requires evidence for referrals to its Financial Investigations Unit “to safeguard against vexatious claims”. An illustrative list of the evidence required to make a referral to the Financial Investigations Unit should be made available to receiving parents, alongside guidance on where they might reliably find such evidence. The Department should also set out, in response to this Report, how it will reduce the number of unfounded claims reaching the Financial Investigations Unit, thus improving the experience for receiving and paying parents.

40. Cases are complex where the paying parent’s income is from self-employment or non-earned income. To ensure that a fair arrangement is reached for both receiving and paying parents in these circumstances, a specialist caseworker should be assigned to such cases supported by clear guidance on identifying income sources.

Universal Credit deductions

41. While the Department can process deductions to Universal Credit for child maintenance, a combination of technical and legislative limitations prevents the CMS from processing any partial deductions from Universal Credit for the purposes of child maintenance.⁴⁹

Technical and legislative limitations on partial deductions for maintenance

42. For maintenance due, the Department has the legislative authority to process partial deductions but the Universal Credit IT systems do not have the required functionality. The Department is currently prioritising changes to the Universal Credit system for the purposes of preventing fraud and error as well as automating more processes for the expansion of the move to Universal Credit.⁵⁰ There is currently no legislative authority for the Department to process partial deductions to Universal Credit for the purpose of collecting child maintenance arrears.⁵¹

Priority of deductions

43. Sometimes there may be multiple competing demands on deductions from a claimant’s Universal Credit claim. The deductions cap naturally means that not all such demands can be met. In those cases there is a priority order under which deductions are taken. Child Maintenance is twelfth on that list,⁵² with debt to DWP, such as from overpayments or advance repayments holding a higher priority.⁵³ Hilda Massey, Director, State Pensions, Child Maintenance and Devolution at the Department, noted that some things needed to rank higher, for example, deductions for debts related to where a paying parent was living since “if someone were to lose their home, then they would not be able to work and then child maintenance would not be paid.”⁵⁴ We have previously detailed the hardship that deductions can cause to Universal Credit claimants.⁵⁵ Our analysis here is simply related to the prioritisation of Universal Credit deductions, particularly from the perspective of tackling child poverty, and does not call for greater deductions beyond the deduction cap.

44. Competing priorities for the Universal Credit system, specifically work on fraud and error and the automation of processes to allow the expansion of the move to Universal Credit, mean the Department has not undertaken work to implement capability in the system to process partial deductions for child maintenance in the Universal Credit system. The Government should confirm that it plans to implement partial deductions for child maintenance, where this ranks in priority for work on the system and when this work is expected to be reached.

45. The Department should seek, as part of any future legislative change in the Child Maintenance Service system, the authority to process partial deductions from Universal Credit for child maintenance arrears.

46. Child maintenance currently ranks low on the priority list for Universal Credit deductions at twelfth, below deductions for DWP debt, such as advance payments. We disagree that pursuing such debt should hold a higher priority than child maintenance. Deductions for child maintenance should take higher priority than deductions for the payment of debt owed to the Government. To assist families, the Government should revise the deduction priority list so that child maintenance is above Government debt and should, in its response to this Report, set out the current deduction priority list and the rationale for Child Maintenance being twelfth.

Domestic abuse and coercion

The risks in the system

47. Domestic abuse is not experienced only by one particular gender, nor is it unique to paying or receiving parents but the majority of evidence we received was from the perspective of receiving parents, the majority of whom are women. The risks of domestic abuse in the child maintenance system were tragically demonstrated by the death of Emma Day. Victoria Benson of Gingerbread was extremely critical of the quality of service provided by the CMS to survivors:

The question was: do I think the CMS is doing anything to help survivors of domestic abuse? No, I do not. I think there are huge improvements that can be made. Domestic abuse is much more prevalent than it thinks. We know that 60% of the applicants to collect and pay have the fee waived because they are survivors of domestic abuse. Of course, domestic abuse is a wide definition and post-separation abuse is common. We hear about it all the time. It is non-resident parents usually who are making threats around maintenance, withholding maintenance, contact, and seeking residence of the children. They use all these levers to exert control over the resident parent.⁵⁶

48. Gingerbread’s written evidence raised concern about the effectiveness of the domestic abuse training that was offered to CMS customer service agents. They recognised that while “the CMS has implemented a number of changes to try to address this issue, we still hear from single parents who feel the support offered by the CMS is inconsistent or, at times, inaccurate”.⁵⁷

49. The CMS’s treatment of people who have suffered domestic abuse is important not only because of the seriousness of the matter but also because of the number of applicants to the CMS who have suffered domestic abuse. DWP statistics reveal that, since the quarter ending September 2018, the proportion of applicants who have been exempted from the £20 fee because of the domestic abuse waiver has been consistently between 52 and 60%.⁵⁸ For comparison, the ONS’s November 2022 Domestic abuse in England and Wales overview: November 2022 release shows how domestic abuse appears to be at a lower rate at a population level than it is in for CMS applicants, with the ONS noting:

• “The Crime Survey for England and Wales (CSEW) estimated that 5.0% of adults (6.9% women and 3.0% men) aged 16 years and over experienced domestic abuse in the year ending March 2022; this equates to an estimated 2.4 million adults (1.7 million women and 699,000 men).
• Approximately 1 in 5 adults aged 16 years and over (10.4 million) had experienced domestic abuse since the age of 16 years”.⁵⁹

Risks in Direct Pay

50. We were warned of the particular risks surrounding domestic abuse in Direct Pay. Cristina Odone, Head of the Family Policy Unit, Centre for Social Justice (CSJ), explained that the risks of abuse in Direct Pay were “huge”:

…because, first, it is a controlling mechanism that the abuser can use saying, “I will pay you”, “I won’t pay you”, “I might pay you this much, but not all of it”. There is a controlling economic abuse at play. When the survivor of domestic abuse has to go and knock on the door and say, “Hey, look, I am owed money”, you can imagine what this does to somebody who is already a perpetrator.⁶⁰

51. We were particularly concerned about reports, such as those from Meghan Meek-O’Connor, Senior Policy Adviser at Save the Children, that the CMS had encouraged parents to return to Direct Pay when it was inappropriate, such as in cases of domestic abuse.⁶¹ In our roundtable, we heard first-hand from participants who had had experiences of being encouraged to return to Direct Pay in cases that involved domestic abuse.

Skipping Direct Pay in cases of domestic abuse

52. There is presently no legislative mechanism whereby the CMS can move straight to Collect and Pay instead of Direct Pay in the event of domestic abuse. As long as the paying parent passes the “unlikely to pay” test, the CMS starts with Direct Pay (unless the paying parent agrees to go straight to Collect and Pay). Dr Callan’s Review recommended that this should be changed:

I believe there is now a pressing need—reinforced by concerns raised by stakeholders and the Independent Case Examiner—to introduce an express legislative lever that will give the CMS the option to deny a Direct Pay arrangement, when requested to do so by the receiving parent, and where there is verifiable evidence of domestic abuse, not simply an allegation.⁶²

Such a recommendation was also made to us in written evidence. One Parent Families Scotland told us that, for cases involving Direct Pay, such an arrangement “is unlikely to be suitable and could place victim-survivors at risk of continued financial abuse and harassment.”⁶³

The Child Support Collection (Domestic Abuse) Bill

53. The Child Support Collection (Domestic Abuse) Bill, a Private Members’ Bill, which is in the House of Lords following Third Reading in the House of Commons on Friday 3 March, makes provision to enable maintenance to move straight to Collect and Pay in situations of domestic abuse, perpetrated either by the paying parent or the receiving parent.⁶⁴

54. The inappropriateness of Direct Pay in cases such as domestic abuse raises questions around the effectiveness of fees designed to incentivise Direct Pay arrangements in such circumstances. We consider the subject of fees for Collect and Pay in Chapter 4.

Response to the Callan Review

55. As discussed in Chapter 1, the Callan Review made a number of recommendations in relation to domestic abuse. Dr Callan concluded that the CMS “has taken substantial steps” in relation to domestic abuse, such as through the introduction of direct questions at the application stage, caseworker training, and the introduction of tools such as the Domestic Abuse Plan within the Complex Needs Toolkit. However, that review received evidence from parents that demonstrated a prevailing perception, at the very least, that the paying parents could “weaponize CMS systems to maintain levels of coercion and control.”⁶⁵ This mirrors evidence in our inquiry. The Callan Review however also described how abuse could be “mutual or bi-directional” and the recommendations included that a broader range of agencies were included in the training provided by the CMS on domestic abuse, including those that specialised in men’s issues.⁶⁶

56. The Minister, Viscount Younger of Leckie, Parliamentary Under-Secretary of State (Minister for Lords), stressed to us that the Department took domestic abuse seriously.⁶⁷ DWP Director Hilda Massey, told us that work was underway to scope the timelines of all the initiatives of work arising from the review.⁶⁸

57. We thank Dr Samantha Callan for her independent and detailed report on the Child Maintenance Service’s response to domestic abuse and we welcome the broadly positive approach the Government has taken in its response to that review, accepting most of the recommendations. The Government should, in its response to this Report, provide a timetable for the work arising from that review.

58. We strongly support the aims of the Child Support Collection (Domestic Abuse) Bill, which would allow domestic abuse cases to skip Direct Pay and move straight to Collect and Pay. We welcome the Government’s support for that legislation. In response to this Report, the Government should set out the intended timetable for commencing the provisions in the Child Support Collection (Domestic Abuse) Bill, should it be passed in the 2022–23 Session of Parliament.

Take-up gaps

The proportion of families with and without arrangements

59. The 2022 NAO report analysed the proportion of separated families that had child maintenance arrangements after the 2012 reforms. The report estimated the number of families with family-based, statutory⁶⁹ and no arrangements, comparing the figures for 2011–12 with those for 2019–20. The report estimated that the proportion of families:

• With a private (family-based) arrangement had increased from 29% to 38%;
• Who had a statutory arrangement had fallen from 46% to 18%; and
• That had no arrangement had risen from 25% to 44%.

The NAO warned that a number of different sources were used in the calculations and therefore they should be used with caution.⁷⁰ The Department’s own statistics estimated that for the financial year ending 2021:

• 40% of families had a family-based arrangement;
• 19% had a statutory arrangement; and
• 40% of families were without any arrangement.⁷¹

60. We pressed the Department on the implications of the reduction in maintenance arrangements since the 2012 reforms. The Department explained it did not have an estimate of the effect of the increase in the number of families without maintenance arrangements on the level of child poverty and stressed that its “research shows that around half of receiving parents without an arrangement do not want one” and that “whilst the size of the CSA caseload was far bigger than the current CMS, the arrangements were often ineffective”.⁷²

Families who do not have an arrangement but want one

61. There is evidence, from a survey of parents published by the Department, that there is a substantial number of parents who do not have an arrangement but want one. The survey, published in July 2022, reached 2,489 non-matched separated parents, to explore how they made provisions for childcare and support. The sample comprised 1,555 parents with care (PWCs) and 934 non-resident parents (NRPs).⁷³ 35% of parents with care and 49% of non-resident parents who did not have an arrangement reported wanting one. The NAO, extrapolating from this survey, said “This suggests there may be around 350,000 parents with care and around 500,000 non-resident parents who do not have an arrangement but would like one.”⁷⁴

62. Within that survey there were 556 parents with care who did not have an arrangement. In identifying barriers to setting up an arrangement from a list in the survey the main options selected by parents with care were:

• the non-resident parent did not want to provide support (48%);
• the non-resident parent did not have the means to offer support (22%);
• they did not have a good relationship with the other parent (18%);
• they could manage by themselves (18%);
• they did not want the non-resident parent to have contact or offer support (12%); and
• they lived too far away / distance (10%).⁷⁵

63. Mr Reddaway, representing the NAO, told us that it appeared that there were some parents with care who did not understand what the CMS was or what services it could provide, commenting that it was also interesting that there were people who were not contributing to their children who wished to do so. He suggested that there was a need for more research in this space.⁷⁶

64. The proportion of families with private arrangements has increased since the 2012 reforms but this has also been accompanied by an increase in the number of families without an arrangement. There is evidence that a significant number of parents who do not have an arrangement want one. This means some children are avoidably missing out on maintenance which could help reduce child poverty. The Government should also produce an analysis of the reasons for the increase in the proportion of families without child maintenance arrangements.

65. Research like the Government’s 2022 separated families survey helps form a useful evidence base for effective policy formation. Research on why parents do not have maintenance arrangements but want one would be valuable. We recommend that the Government conduct further research on the reasons parents who want maintenance arrangements do not have one to allow for effective, evidence-based policy interventions, so as to help improve the operation of the child maintenance system and decrease poverty. The Government should also set out how it plans to reach out proactively to and support those families to make arrangements.

3 The perspective of paying parents

66. In this Chapter we analyse the perspective of paying parents, in particular we consider:

• The affordability of current maintenance levels and the effect these levels have on work incentives;
• The role the current system plays in potentially incentivising conflict through the creation of “winners and losers”; and
• The accuracy of maintenance payments.

Affordability and work incentives

Affordability and mental distress

67. We set out in Chapter 1 how child maintenance is calculated. Several reports have criticised or raised concerns about the affordability of maintenance assessments for parents on low incomes, with particular anxiety raised about the lack of uprating of earnings thresholds since 1998.⁷⁷ Dr Christine Davies, Honorary Senior Lecturer in Mathematics at Royal Holloway University of London, explained why this is important:

The Department has recognised that it needs a change in primary legislation. It now admits that there are problems with the regulations, that they do not work for people on low income, and I have spelled out two of the reasons why. One, for example, is the thresholds at which you start paying more than a nominal amount. That was set at £5 in 1998. The threshold was £100. That was 20% above the rate at which you started paying income tax. If you move that forward to now, that would be that you did not pay anything more than a nominal amount until you were earning more than £15,000. Someone earning £15,000, according to the intention of the scheme, should be paying seven times 52—£364—a year, instead of which they are asked to pay £3,500.⁷⁸

68. While the Callan Review described most receiving parents as being understanding of financial strains experienced by paying parents, it also noted that some receiving parents could use these against paying parents in “spirals of post-separation conflict and abuse”. It further explained that some paying parents, unable to afford sufficient accommodation, could be effectively disallowed from having their children stay overnight. This increased the maintenance due from those parents, further impoverishing them.⁷⁹ The Government accepted Dr Callan’s recommendation to review the affordability of maintenance payments, accepting that there was a widely held view that unaffordability formed a barrier to compliance.⁸⁰

69. Criticism has also been made of the 25% threshold under which a change in child maintenance may be calculated, with particular reference drawn to the pandemic and people’s incomes falling by 20% but having no reduction made in the level of child maintenance payments.⁸¹ Fathers Need Families suggested a figure of 10% would be more appropriate, at least for parents on lower incomes.⁸²

70. A lot of our evidence discussed not only the affordability of maintenance but described severe hardship and distress experienced by paying parents. One paying parent in evidence to us said:

I was diagnosed with severe depression and severe anxiety last year as a result of the long, torturous battle I have been forced to endure, to prevent CMS taking £1,700 per month for children who I look after 49% of the year, who I pay for everything for, who the mother refuses to pay a penny towards….and this is meant to be helping my twins. I was forced to leave a well paid job due to the stress I endured. I have read lots of evidence from DWP figures that shows parents trapped in the CMS system have excess deaths well into the hundreds each year. Having experienced this system this is absolutely no surprise. I don’t think driving parents to suicide is helping poverty issues or children’s start in life.⁸³

71. Distress among paying parents was also raised during our roundtable discussions, with some reporting that the unaffordability of maintenance payments had a significant effect on their mental health. Michael Lewkowicz, Director of Communications and Business Manager at Families Need Fathers, argued that the Department had not particularly engaged with analysis showing that:

there are 1,000 paying parents a year who are committing suicide, one of whom we heard about two weeks ago, because of the strain that is being put upon them from a service that is demanding something that is impossible for them to meet.⁸⁴

Work incentives

72. Dr Davies described the maintenance calculations as being unaffordable for parents on low incomes, which also produced extremely high effective marginal tax rates for certain parents, including potentially being over 100%, meaning that some parents could be worse off for earning more money. Dr Davies provided the following calculations:

Table 4: Effective Marginal Tax Rate (percentage) for Paying Parent under Universal Credit

	Maintenance scheme	1 child	2 children	3 children
Reduced rate with council tax support	2012	81	85	95
	2012 + 20% collection fee	84	94	101.2
Basic rate, paying NI and tax	2012	82	86	89
	2012 + 20% collection fee	84.4	89.2	92.8

Source: Dr Christine Davies (CMS0021)

She elaborated in her written evidence that:

For weekly earnings between £100 and £200 parents pay the reduced rate. A parent paying for three or more children on Collect and Pay is more than 1p worse off for every extra £1 earned. At weekly earnings £200 parents begin to pay the basic rate. A parent paying for three or more children on Collect and Pay gains only 7p for every extra £1 earned.⁸⁵

73. The impact of the system on work incentives was also documented by the NAO, which reported that effective marginal tax rates of up to 100% persisted for some parents seeking work. The report noted that this could “create a disincentive to work that the system is designed to avoid.”⁸⁶ In oral evidence, Cristina Odone, from the Centre for Social Justice, referenced the concept of a “parent poverty trap” and argued that, in order for children to be lifted out of poverty, parents needed to be lifted out of poverty. She suggested that “one of the best ways to do that is to ensure that they can work and that there is no disincentive baked into the system that keeps them from working.”⁸⁷

74. Conversely, Professor Esther Dermott, Professor of Sociology and Social Policy at the University of Bristol, raised concerns about pursuing a policy which led to a reduction in the financial support given to lone resident parents, stating that such parents “are among the poorest categories”. Professor Dermott argued that any such move should be accompanied by further action on a nationwide level to ensure children in poverty were not dragged further into poverty.⁸⁸ The level of poverty of receiving parents was also raised by Hilda Massey, Director, State Pensions, Child Maintenance and Devolution at the Department, who explained that the income of receiving parents was much more skewed to the bottom quintiles, while the spread for paying parents was more even.⁸⁹

Problems caused by the use of primary legislation

75. We set out the bands for child maintenance assessments in Chapter 1 (see Table 2), which the Minister accepted were, “a bit outdated”.⁹⁰ These bands are set out in primary legislation which makes them difficult to amend or simply uprate. Indeed the difficulties caused by the heavy coverage of the CMS in primary legislation was raised by Dr Callan’s Review, with one official describing the CMS as “steeped in primary legislation”.⁹¹ The review argued that the detail of rates and thresholds needed to be lifted out of primary legislation.⁹²

76. Government policy is to encourage work, returning to work and in-work progression as far as possible to help reduce poverty, however multiple reports have raised concern both about the affordability of maintenance payments and distorted the work incentives caused by the current maintenance levels. This poses a risk to work incentive objectives of Universal Credit.

77. The unaffordability of maintenance for some parents is causing severe hardship and distress. It also forms a barrier to compliance. Updating maintenance levels and thresholds should therefore be seen as a priority. We recommend the Government completes its analysis of the affordability of maintenance payments and make proposals as an urgent priority no later than six months after our Report has been published.

78. As part of its work on affordability, the Department should also seek to rebalance legislation so that changes, such as uprating maintenance thresholds, can be made more readily, for example through secondary legislation.

79. The Department’s work on maintenance calculations should prioritise the interests and welfare of the impacted children. In particular the potential implications of changes to maintenance levels on the number of children in poverty must be carefully considered and the implications for other policies (such as state support for parents with children) should be considered alongside changes to maintenance calculations.

Alternative models

80. The Callan Review argued that the Government should change maintenance assessments to include the income of the receiving parent, asserting that:

the inclusion of only one income in the calculation is becoming increasingly untenable and, again, the greater the perceived unfairness of a system, the more it is likely to drive conflict and abuse.⁹³

81. The idea of changing maintenance calculations to include the income of the receiving parent was also put to us in evidence. Cristina Odone suggested an income share model akin to the one used in Australia, as recommended by the Centre for Social Justice.⁹⁴ The essential elements of such a “shared income model” include:

• Each parent is given a self-support allowance;
• The “costs” of the children are worked out according to the age of the children;
• Those “costs” are shared between the parents in proportion to their income above the self-support level;
• The parent’s income takes into account the state support received by each parent; and
• In some cases, the state support can be shared between the parents.⁹⁵

82. The Minister warned us against regarding particular models as a “panacea” and indicated the Department, while not dismissing the idea, was not currently minded to pursue an income share model:

we take the view, having looked at it very carefully, that there is no best-in-class model or a like-for-like comparison. I am very aware of the point that you make about the two incomes being taken into account. However, we do not think that that is the right way forward. Having said all that, we have not dismissed it. We will look at what other countries do as part of our review. We still say though that the UK system performs pretty well against any other child maintenance system and it also has some of the strongest enforcement powers internationally, taking account of the shared responsibility. I hope that that answers the question that we are not unaware of what other countries do. If there was a panacea, I would say so, but there is not.⁹⁶

83. DWP Director Hilda Massey told us that previous attempts to consider both parents’ incomes “caused huge complexity and led to very large numbers of changes in circumstances.” She further explained that compliance levels in Australia had stayed roughly the same after the introduction of such a scheme.⁹⁷

Does the system incentivise conflict?

84. It was put to us that the maintenance system encourages and exacerbates conflict between parents. Families Need Fathers argued that the system was one in which the “winner takes all”, with the receiving parent getting child benefit and more effective support with costs such as housing.⁹⁸ Issues concerning the housing support provided to receiving parents have previously been raised by the Social Security Advisory Committee and was also discussed in our roundtables.⁹⁹ Paying parents reported that the system encouraged parental conflict over who would get over the 50% hurdle to be entitled to state support and child maintenance. They also thought that receiving parents were incentivised to reduce the time the children saw the paying parent, so as to increase the amount of maintenance they received. The incentivisation of such conflict may risk the effective running of the child maintenance system. The Department’s survey of separated families described conflict as “a key barrier” to parents forming their ideal maintenance arrangement.¹⁰⁰

85. We have heard that the current child maintenance system incentivises parental conflict under a “winner takes all system” and there appear to be strong arguments in favour of reform away from such a system. However, reform towards an alternative model, such as an income share model, would require careful consideration and preparation. Once the urgent work on maintenance affordability is finished, the Department should consider a model which incorporates both parents’ income. We suggest that the key criteria the Government use to evaluate any such proposal should include the potential effect on compliance, the scope for any proposals to tackle incentives to parental conflict and potential impact on child poverty. In its response to this Report, the Government should set out when such work will begin.

Day-to-day care arrangements

86. In our roundtable discussions, we heard from paying parents who said that their family court order had envisaged care being split 50/50, however the CMS had determined that care was not in fact 50/50, due to a particular focus on overnight care, so in cases where, for example, one parent had a child for 183 nights and the other 182, one parent was still judged to owe maintenance to the other. Paying parents also raised concern that child benefit was in effect used as a proxy for determining who should receive maintenance. There is no mechanism to split child benefit between two parents, only one can be in receipt.¹⁰¹

87. The CMS should ensure its guidance is clear on situations of 50/50 day-to-day care and that, where court orders are made under the expectation of care being equally split, no maintenance is deemed to be due. The use of child benefit to determine that maintenance is indeed due appears to us to be a blunt tool and recommend that the CMS should not use child benefit as an effective proxy to determine whether child maintenance is due.

88. Presently it is not possible for child benefit to be split between parents, even in cases of equally shared care. The Department should work with HMRC to enable parents with shared care to split child benefit between them.

Accuracy of maintenance payments

89. During our inquiry we received a lot of correspondence saying that maintenance assessments from the CMS were inaccurate and parents were being pursued for unsubstantiated arrears.¹⁰² Joshua Reddaway explained that the NAO regarded the CMS’s maintenance calculations to now be approximately 99% accurate.¹⁰³ He was, however, very clear that such certainty did not extend to arrears inherited from the Child Support Agency:

The National Audit Office and the Comptroller and Auditor General have qualified the accounts for what is essentially the CSA—the 1992 and 2002 accounts—ever since it was created, and there remains debt on that account that the Child Maintenance Service continues to pursue. That number has come down considerably because, essentially, there was a debt write-off policy from 2018. When we last looked at this, in the last set of accounts, in March 2021— we are auditing the new set now—£310 million was outstanding. We put an adverse opinion on that, which is as strong as an auditor can be. We were saying, “We do not believe that that is the correct number.” We would not necessarily use the word “fictious”. However, people are being pursued for debts where there is not the evidence to substantiate that they owe.¹⁰⁴

The most recent accounts for the Client Funds Accounts for the 1993 and 2003 Child Maintenance Schemes (2021–22) also attracted an adverse opinion.¹⁰⁵

90. Split the Difference, an organisation which seeks to raise awareness of inequality for men and boys, told us in its written evidence that there were examples of parents being informed by the CMS that they had arrears but these were “unproven”.¹⁰⁶ One witness to our inquiry told us that they were informed that substantial arrears had accrued on their account but despite repeatedly writing to the Department they had received no explanation for how this had occurred.¹⁰⁷ During our roundtable discussions paying parents were very critical of the communications they received, at times questioning the accuracy of maintenance assessments and telling us that calculation letters received from the CMS did not include the salary that those calculations were based on. They suggested such information should be included.

91. We are concerned about the prospect that the Child Maintenance Service is pursuing arrears inherited from the Child Support Agency that cannot be properly evidenced, although we acknowledge not collecting such arrears would impact the relevant receiving parent. We request that the Department, in its response to this Report, set out what its strategy is for such arrears and investigate the potential to seek alternative ways of dispensing with arrears that are poorly evidenced, to ensure that both parents have faith in the sums being pursued.

92. We have received evidence critical of the correspondence provided by the Child Maintenance Service. For example, paying parents reported asking for details on how substantial arrears had accrued and receiving no effective information in response. This risks exacerbating hostility by preventing paying parents from having confidence in the debts being pursued.

4 Matters of interest to both receiving and paying parents

93. In this Chapter we consider matters of relevance to both receiving and paying parents, particularly:

• The effectiveness of Collect and Pay fees as incentives to make family-based arrangements for child maintenance; and
• Customer service.

The effectiveness of Collect and Pay fees

94. One of the principal goals of the CMS system is to encourage parents to collaborate and come to family-based arrangements, with the statutory system in place for families who want an arrangement but for whom a family-based arrangement is not possible.¹⁰⁸ The Minister, Viscount Younger of Leckie, explained how fees were there to incentivise parents to:

Consider whether they really need to use the CMS at all, or where they do need the support of the CMS, whether they can arrange payments directly through a direct pay arrangement. We do think, as I said earlier, that having both the 20% and the 4% is the right approach. This is notwithstanding the issues that we are looking at over domestic abuse.¹⁰⁹

95. As we set out in the paragraphs that follow, the effectiveness of the fees as incentives was strongly questioned by witnesses to our inquiry, particularly the fees under Collect and Pay.

Effectiveness of Collect and Pay fees for receiving parents

96. Gingerbread argued that the 4% fees for receiving parents should be removed, saying it was ineffective as an incentive and “only serves to punish children whose other parent either cannot or will not pay maintenance.”¹¹⁰ Save the Children UK told us similarly that the 4% fee effectively punishes children whose parents are unable to come to an agreement using Direct Pay.¹¹¹ One-Parent Families Scotland said this left children “who are already dealing with difficult family circumstances with less financial support. This policy cannot be seen to align with a child-centred, children’s rights approach.”¹¹² It was put to us that the 4% fee for receiving parents should be removed.¹¹³

Effectiveness of Collect and Pay fees for paying parents

97. The 20% fee for the paying parent was also criticised. Families Need Fathers argued that it had the effect of pushing some poor paying parents even deeper into poverty.¹¹⁴ Michael Lewkowicz expanded on this, saying that the fees might work for “relatively comfortably off parents” but that the 4% and 20% fees were “morally and financially misguided and wrong for anybody on a low income.”¹¹⁵ Dr Davies also criticised the value of the fees as incentives:

Does it work? There may be some well-off parents for whom, yes, this is an incentive to use direct pay, but a large proportion of the parents on collect and pay are not parents who chose to be there. They are there because they could not afford the standard amount that was asked for. If they do not pay that, then they are moved to collect and pay. If they couldn’t pay what was there to start with, it is even worse if they are then charged an extra 20% on top. Of course, they can’t pay.¹¹⁶

Cases involving domestic abuse

98. As we set out previously in this Chapter, the Minister explained that the purpose of fees for Collect and Pay was to incentivise parents to avoid using the CMS and instead use Direct Pay or private arrangements. However, there also appears to be an acknowledgement, not least from the Government’s support for the Child Support Collection (Domestic Abuse) Bill, that there are situations in which private or Direct Pay arrangements are not appropriate. This places the purpose of such an incentive in doubt. It was worrying to hear that some abusive former partners had persuaded receiving parents to use Direct Pay to avoid charges.¹¹⁷ We set out the risks of abusers exerting control in Direct Pay arrangements earlier in this Report, in Chapter 2.

99. Dr Samantha Callan, in her independent review, mentioned that she had considered ideas including the introduction of waiver of Collect and Pay fees for one or both parents in domestic abuse cases but, citing the short time-bound nature of the review, said it was not possible to assess the idea fully. Dr Callan also noted that it could trigger objections from other Collect and Pay users who believed themselves deserving of a similar waiver, concluding:

So, on balance, my assessment is that a legislative change is now required to prevent Direct Pay being used to perpetuate abuse by the paying parent (as well as measures to address abuse by the receiving parent.) Incurred charges would therefore carry benefits to receiving parents which help explain why they must be paid.¹¹⁸

100. 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.

101. It is particularly difficult to understand how fees, intended to incentivise the use of Direct Pay, can be justified in cases where the Department appears to have accepted such arrangements are not appropriate, such as in cases of domestic abuse. The Department should introduce a mechanism to waive Collect and Pay fees for customers who have been subject to domestic abuse, or whose children have suffered abuse, be they paying or receiving parents. The evidence base for this should be the same as the evidence base that the Government sets out for cases to skip Direct Pay and move straight to Collect and Pay.

Customer service

102. Many witnesses were critical of the customer service support they received from the CMS. During our roundtable discussions, participants complained about the need to continually explain their circumstances to a number of different caseworkers when they called the helpline. Attendees were much more positive about their experiences when they had a single named caseworker in the enforcement team. Criticism was also made of the CMS helpline only being open during workdays and working hours (Monday–Friday, 8am–6pm), which was particularly difficult when parents had work commitments.

103. The Department’s 2020/21 Customer Experience Survey and the CMS Customer Experience Survey are not currently published and the Department told us that it was unable to share the findings at this time.¹¹⁹ Arlene Sugden told us that the Service had piloted real time customer feedback, which had “proved successful” and was planned to be rolled out across the Department:

The immediate feedback was very useful. Customers rated the service at 7.4 out of 10, and treatment nine out of 10. We were able to act on that, and where a customer had perhaps rated the service lower, then we would look at the case and understand why that was and perhaps even in some cases reach back out to a customer to understand why they had scored the service that way. That is how we gather formal feedback.¹²⁰

104. The NAO report explained that the Department received more complaints on child maintenance than any other subject. It upholds a lower proportion of these than for other benefit areas (around 34% compared to, for example, Employment & Support Allowance and Incapacity Benefit, for which 53% of complaints were upheld). Despite this, the high volume of complaints meant it upheld 1.15 complaints for every 1,000 customers in the year to 30 September 2021, the highest per customer for any topic. The next highest was Universal Credit, New Style Job Seeker’s Allowance and New Style Employment and Support Allowance, with 0.31.¹²¹

105. Victoria Benson described some of the customer service problems Gingerbread had been informed of:

We hear such horrendous stories of the way people are treated. It is leading to huge mental health stress, people pushed from different customer service agents, people’s notes being lost. We heard about one parent. She was told her maintenance was coming and her ex had paid it and, in fact, he had paid it to his other ex-wife who had another child, so she did not receive it. It is hugely upsetting. It takes up a huge amount of time. The errors that they make, you just have to wonder. In a public company it would not be allowed.¹²²

106. Meghan Meek-O’Connor, Senior Policy Adviser from Save the Children, recounted how one parent described being “constantly lost in translation” and that “it took so long to finally be able to have a conversation with someone on the phone, and even then you were not sure if any action was going to come out of it.”¹²³ Participants in our roundtable discussions, both receiving and paying parents, were critical of the standards of service they received from the CMS.

107. The NAO found that the Department had not identified a suite of performance measures, management information and benchmarks to assess whether it was providing an effective service. The Department told the NAO that it planned to improve its measurement and benchmarking as part of its transformation activities.¹²⁴

Introducing named caseworkers

108. One of the points raised in our roundtable discussions was how exhausting it was to have to explain your circumstances multiple times to different caseworkers. The Child Maintenance Service currently operates a mixed model with greater and lesser levels of dedicated caseworkers depending on the complexity of the outstanding action on a customer’s case. For simple tasks a caseworker may be with a case simply until that action is completed, while in cases involving more complex enforcement activities, an Enforcement Case Manager will be assigned.¹²⁵ Participants in our roundtables reported positively about their experiences with having a named Enforcement Case Manager.

109. In response to Dr Samantha Callan’s independent review, the Department confirmed it would pilot single named caseworkers for complex domestic abuse cases.¹²⁶ Arlene Sugden explained that the CMS planned, over the next 12–24 months to transition to a model where all customers had a named caseworker, although this would start initially with customers in abusive situations and progress to eventually cover all customers.¹²⁷

110. We strongly support the Child Maintenance Service’s plans to move to having a named caseworker, initially for customers in abusive situations before eventually being rolled out to all customers. The experience of having to recount one’s story multiple times was a particular issue we heard about in our inquiry and the Department’s plans have the potential to improve customer service outcomes substantially. We would welcome data being provided to the Committee quarterly to demonstrate progress against assigning customers named caseworkers.

111. We have heard that perceptions of the levels of customer service of the CMS continue to be poor for both paying and receiving parents. The Department should develop its management information to allow it to demonstrate it is delivering good customer service and report publicly on this regularly. We recommend the Department should publish this information on a yearly basis as part of the Department’s annual customer experience survey returns.

112. We acknowledge that staff working for the Child Maintenance Service can have a difficult caseload and come across difficult and distressing situations routinely as part of their work. To ensure that staff are able to support customers, appropriate training and support is essential. The Government should review, within six months of this Report being published, the support and training provided to CMS staff and report its findings to the Committee, alongside the actions it will take in response to remedy any issues identified.

113. The current opening hours of the CMS helpline were criticised in our roundtable discussions, particularly from parents who had work commitments. We recommend the Government trial different opening hours for the CMS, to include weekends. This could be achieved by reducing the opening hours on some weekdays.

Contacting the CMS

114. Arlene Sugden explained to us that, during the coronavirus pandemic, the CMS had introduced an electronic messaging system as a temporary measure. She explained while this system as “helpful” for communicating during the pandemic, the CMS “could not handle that level of demand” and that “As you can imagine, when you make it that easy 24/7, customers message regularly”.¹²⁸ At the moment customers can only contact the CMS by telephone or letters.¹²⁹ Ms Sugden did however stress that “It is not to say that that is the permanent situation. We are constantly looking at modern technology and trials of contact. We are part of a broader modernisation programme within the Department. There is a lot of new technology coming down the track as part of that modernisation programme, which we will look into at that stage.”¹³⁰ Some participants in our roundtable discussions particularly praised the online messaging functionality that had been introduced during covid.

115. Customers only being able to contact the CMS via letters or telephone is slow and antiquated. The CMS should introduce an electronic messaging system, or at least an ability for customers to contact them by e-mail to provide greater levels of customer convenience.

116. In summary: Our inquiry has found a number of issues with the Child Maintenance Service that need to be addressed. Receiving parents continue to report great frustration at ineffective and slow enforcement. Paying parents have described distress and being pushed into poverty by the unaffordability of child maintenance payments. This harms the effectiveness of a system with an important role to play in tackling child poverty in separated families.

Annex: Notes from roundtable event with paying and receiving parents

On 16 January 2023 we went to Manchester to speak to receiving and paying parents who were using the Child Maintenance Service. This annex summarises what we heard.

Paying parents

Problems highlighted

• There were cases where parents who had 50:50 shared custody of their child were having to pay maintenance to the other parent, meaning that they were at a disadvantage financially when the child was in their care. The letter setting out the amount of CMS due did not set out on what salary the calculation was made, or the number of nights a child was spending with each parent.
• Concern was raised that the system produced “winners” and “losers”, incentivising conflict and there was a financial incentive to reduce the night’s spent with an NRP in order to increase the child maintenance awarded.
• It was reported that the emphasis was on where a child slept and things like contributions, such as paying for school uniforms, were therefore not considered.
• Customer service wait times were long, the opening hours were difficult for those working full-time and often advisers could not help and callers were made to re-explain what could be sensitive and challenging situations. CMS also sometimes signposted people to other services rather than offering support and re-considering its decisions.
• The portal was deemed difficult to use and messages appeared to be deleted and moved around frequently.
• Communications from the CMS arrived often at weekends and in the early hours of the morning and this had a negative effect on those receiving the communications. The tone of communication was also felt to be aggressive/overly direct. Enforcement was deemed to be taken quickly, but without justification and explanation.
• Where there were multiple children involved e.g. a parent was both a receiving and a paying parent, or a paying parent was responsible for other children who were resident with them, no consideration was given to the other child. This could mean that a CMS payment disadvantaged another child or other children for whom the parent had responsibility.
• The level of payment in some cases appeared to be over and beyond what it would cost to bring up a child and there was a perception that receiving parents were using this to subsidise their costs.
• It was sometimes unclear why parents who were making regular payments were moved on to Collect and Pay, which involved them incurring additional costs.
• There was a perception that the CMS believed whichever individual complained to it, even where information was evidentially not true. There was a view that the CMS system was open to abuse by both receiving and paying parents.
• It felt inappropriate that the receiving parent should know the salary of the paying parent, especially when no financial information on the receiving parent was shared. It was thought unfair that only the salary of the paying parent was taken into account when making CMS payments.
• Paying parents reported instances of CMS going direct to their employer to make CMS deductions.
• Cases were raised about the impact of the system, including the affordability of fees, on mental health.
• It was suggested that the level of maintenance payments had the effect of pushing some non-resident parents into poverty.
• The accuracy of maintenance calculations was challenged.
• Cases were raised in which paying parents had taken their own lives as a result of their experiences.

Suggestions for change

• The system should be designed with a default assumption that that the care of the child/children will be shared.
• The CMS’s customer service line should be open longer.
• CMS staff should receive better training so that they could help those calling, and also so that they could support/show compassion in distressing circumstances. Easier access to case notes would also help to improve the service received, as would giving those answering the phones more decision-making powers/autonomy.
• The incomes of both the paying and receiving parent should be taken into account when determining the level of child maintenance that should be paid. Participants felt this would shift the focus to the welfare of the child.
• Payment should be calculated based on net income rather than gross, to take account of what a paying parent’s disposable income was and other deductions, such as student loan, that they might have. The calculation should ensure that non-resident parents had enough to live on.
• There should be an estimate for how much it costs to bring up a child and CMS payments should reflect reasonable costs.
• CMS statements should set out the salary used to calculate the child maintenance due. A rationale should also be given on how arrears had been calculated. The salary of the paying parent should not be disclosed to the receiving parent.

Receiving parents

Problems highlighted

• The Independent Case Examiner would not investigate issues with CMS unless the CMS complaints process had been used. However, there were examples that the CMS complaints team did not respond or proceed with complaints.
• It appeared that the CMS made a lot of discretionary decisions without explanation. This also led to rules being implemented inconsistently.
• Communications from the CMS arrived often at weekends and in the early hours of the morning and this had a negative effect on those receiving the communications.
• Some CMS payments were very low (under £10) and even then compliance was not good.
• Enforcement of non-compliance with the child maintenance agreement by the paying parent was seen as absent. CMS, particularly arrears, was very low down enforcement lists.
• There were concerns about loopholes in the system and ways to avoid maintenance, particularly through self-employment.
• There were other ways to abuse the system, such as filing a change of circumstances simply to halt enforcement and cause further delays.
• The customer service line was not helpful in resolving problems and callers were often made to re-explain what could be sensitive and challenging situations
• CMS did not always act or take appropriate action where receiving parents provided evidence that the salary of the paying parent was more than declared to the CMS. Money not earned through PAYE seemed to be hard to accurately capture in the system.
• CMS sometimes asked those who had suffered domestic abuse by their former partner to make independent arrangements for child maintenance payments. In these circumstances this was not appropriate and did not follow CMS guidance.
• There was a view that the CMS system was open to abuse by both receiving and paying parents. It was also perceived that the system enabled abuse to continue, including financial abuse and harm. Further, using Direct Pay had a negative emotional effect on receiving parents (seeing the paying parent’s name on their bank statement).
• It was perceived to be unfair that paying parents had deductions to their CMS payments for travel and use of a contact centre. One described it as charging the children to see their parent.
• Having to re-explain their circumstances to different caseworkers was frustrating but praise was given for the fact they had a single named caseworker at enforcement stage.
• It was said that customer service agents did not have access to case notes, which is one of the reasons moving to a single caseworker was much better.
• Due to ineffective enforcement, child maintenance payments were unreliable and could only be seen as a “bonus” when engaging in financial planning.
• There was a view that the system more widely keeps women in poverty through a lack of affordable childcare, wages not rising, and inadequate support through Universal Credit.

Suggestions for change

• There should be dedicated caseworkers so people did not have to re-explain their circumstances.
• CMS should be better funded and the system should be simplified so there is less passing between organisations where there is a problem.
• Rules should be clearer and the amount of discretion in the system should be reduced to ensure more consistency in decisions.
• Fees for using Collect and Pay should be removed.
• Collect and Pay should be the default payment method for those who have experienced domestic abuse.
• There should be a minimum amount of child maintenance that a paying parent should be required to pay to reflect the cost of bringing up a child.
• Failure to pay child maintenance payments should be reflected in credit reports.
• Enforcement should be strengthened by having, for example, forensic accountants to find evidence.

Conclusions and recommendations

Introduction and the child maintenance landscape

1. We welcome the Child Support Collection (Domestic Abuse) Bill and the Child Support (Enforcement) Bill and their aims. We provide information later in this Report on how these pieces of legislation will help improve the effectiveness of the Child Maintenance Service. (Paragraph 16)

2. One of the purposes of the reforms introducing the Child Maintenance Service was to increase the number of effective arrangements between parents. There is a paucity of data on how many Direct Pay arrangements are effective, which in turn obscures the level of child maintenance not being paid. This inhibits the ability of the Department to demonstrate the ability of the system to meet policy objectives. The Department should proactively monitor the effectiveness of Direct Pay arrangements and report regularly on the number of such arrangements that are effective. An initial survey should take place no later than six months after the Direct Pay arrangement has commenced. Surveys should then take place at regular intervals, at least once every 12 months. (Paragraph 24)

3. Cases moving from Direct Pay to Collect and Pay appear to have substantial arrears on average. The Department should more systematically and swiftly move ineffective Direct Pay cases into Collect and Pay. To do this, the Department should consider imposing a change to how cases are moved to Collect and Pay so that is triggered by child maintenance arrears reaching half of the current average arrears. (Paragraph 25)

4. For many receiving parents child maintenance payments are vital to avoiding or at least stymying the effects of hardship but enforcement is currently slow and often ineffective. We have heard that, while enforcement on Collect and Pay has improved, for many receiving parents enforcement remains ineffective in securing maintenance. We support the aims of the Child Support (Enforcement) Bill to allow for more timely enforcement of maintenance payments and regard effective enforcement as remaining a key priority for improvement. In its response to this Report, the Government should set out plans to improve the effectiveness and speed of current enforcement measures. (Paragraph 34)

5. Evidence to us has raised particular concern about the fraudulent practices employed by some paying parents to reduce maintenance calculations but the Department has not made an estimate of the level of undetected customer fraud and error within the system. We repeat the Public Accounts Committee’s recommendation that the Department should assess the risk of fraud and error within child maintenance and publish, as part of its annual report and accounts for the child maintenance scheme, a fraud and error estimate and reduction target rates. (Paragraph 38)

6. The Department’s own assessment to the NAO “that around 50% of fraud referrals to its Financial Investigations Unit are unfounded” indicates that the system is not functioning as it should be, and, as we will return to later, demonstrates how conflict is encouraged. The Department currently requires evidence for referrals to its Financial Investigations Unit “to safeguard against vexatious claims”. An illustrative list of the evidence required to make a referral to the Financial Investigations Unit should be made available to receiving parents, alongside guidance on where they might reliably find such evidence. The Department should also set out, in response to this Report, how it will reduce the number of unfounded claims reaching the Financial Investigations Unit, thus improving the experience for receiving and paying parents. (Paragraph 39)

7. Cases are complex where the paying parent’s income is from self-employment or non-earned income. To ensure that a fair arrangement is reached for both receiving and paying parents in these circumstances, a specialist caseworker should be assigned to such cases supported by clear guidance on identifying income sources. (Paragraph 40)

8. Competing priorities for the Universal Credit system, specifically work on fraud and error and the automation of processes to allow the expansion of the move to Universal Credit, mean the Department has not undertaken work to implement capability in the system to process partial deductions for child maintenance in the Universal Credit system. The Government should confirm that it plans to implement partial deductions for child maintenance, where this ranks in priority for work on the system and when this work is expected to be reached. (Paragraph 44)

9. The Department should seek, as part of any future legislative change in the Child Maintenance Service system, the authority to process partial deductions from Universal Credit for child maintenance arrears. (Paragraph 45)

10. Child maintenance currently ranks low on the priority list for Universal Credit deductions at twelfth, below deductions for DWP debt, such as advance payments. We disagree that pursuing such debt should hold a higher priority than child maintenance. Deductions for child maintenance should take higher priority than deductions for the payment of debt owed to the Government. Deductions for child maintenance should take higher priority than deductions for the payment of debt owed to the Government. To assist families, the Government should revise the deduction priority list so that child maintenance is above Government debt and should, in its response to this Report, set out the current deduction priority list and the rationale for Child Maintenance being twelfth. (Paragraph 46)

11. We thank Dr Samantha Callan for her independent and detailed report on the Child Maintenance Service’s response to domestic abuse and we welcome the broadly positive approach the Government has taken in its response to that review, accepting most of the recommendations. The Government should, in its response to this Report, provide a timetable for the work arising from that review. (Paragraph 57)

12. We strongly support the aims of the Child Support Collection (Domestic Abuse) Bill, which would allow domestic abuse cases to skip Direct Pay and move straight to Collect and Pay. We welcome the Government’s support for that legislation. In response to this Report, the Government should set out the intended timetable for commencing the provisions in the Child Support Collection (Domestic Abuse) Bill, should it be passed in the 2022–23 Session of Parliament. (Paragraph 58)

13. The proportion of families with private arrangements has increased since the 2012 reforms but this has also been accompanied by an increase in the number of families without an arrangement. There is evidence that a significant number of parents who do not have an arrangement want one. This means some children are avoidably missing out on maintenance which could help reduce child poverty. The Government should also produce an analysis of the reasons for the increase in the proportion of families without child maintenance arrangements. (Paragraph 64)

14. Research like the Government’s 2022 separated families survey helps form a useful evidence base for effective policy formation. Research on why parents do not have maintenance arrangements but want one would be valuable. We recommend that the Government conduct further research on the reasons parents who want maintenance arrangements do not have one to allow for effective, evidence-based policy interventions, so as to help improve the operation of the child maintenance system and decrease poverty. The Government should also set out how it plans to reach out proactively to and support those families to make arrangements. (Paragraph 65)

The perspective of paying parents

15. Government policy is to encourage work, returning to work and in-work progression as far as possible to help reduce poverty, however multiple reports have raised concern both about the affordability of maintenance payments and distorted the work incentives caused by the current maintenance levels. This poses a risk to work incentive objectives of Universal Credit. (Paragraph 76)

16. The unaffordability of maintenance for some parents is causing severe hardship and distress. It also forms a barrier to compliance. Updating maintenance levels and thresholds should therefore be seen as a priority. We recommend the Government completes its analysis of the affordability of maintenance payments and make proposals as an urgent priority no later than six months after our Report has been published. (Paragraph 77)

17. As part of its work on affordability, the Department should also seek to rebalance legislation so that changes, such as uprating maintenance thresholds, can be made more readily, for example through secondary legislation. (Paragraph 78)

18. The Department’s work on maintenance calculations should prioritise the interests and welfare of the impacted children. In particular the potential implications of changes to maintenance levels on the number of children in poverty must be carefully considered and the implications for other policies (such as state support for parents with children) should be considered alongside changes to maintenance calculations. (Paragraph 79)

19. We have heard that the current child maintenance system incentivises parental conflict under a “winner takes all system” and there appear to be strong arguments in favour of reform away from such a system. However, reform towards an alternative model, such as an income share model, would require careful consideration and preparation. Once the urgent work on maintenance affordability is finished, the Department should consider a model which incorporates both parents’ income. We suggest that the key criteria the Government use to evaluate any such proposal should include the potential effect on compliance, the scope for any proposals to tackle incentives to parental conflict and potential impact on child poverty. In its response to this Report, the Government should set out when such work will begin. (Paragraph 85)

20. The CMS should ensure its guidance is clear on situations of 50/50 day-to-day care and that, where court orders are made under the expectation of care being equally split, no maintenance is deemed to be due. The use of child benefit to determine that maintenance is indeed due appears to us to be a blunt tool and recommend that the CMS should not use child benefit as an effective proxy to determine whether child maintenance is due. (Paragraph 87)

21. Presently it is not possible for child benefit to be split between parents, even in cases of equally shared care. The Department should work with HMRC to enable parents with shared care to split child benefit between them. (Paragraph 88)

22. We are concerned about the prospect that the Child Maintenance Service is pursuing arrears inherited from the Child Support Agency that cannot be properly evidenced, although we acknowledge not collecting such arrears would impact the relevant receiving parent. We request that the Department, in its response to this Report, set out what its strategy is for such arrears and investigate the potential to seek alternative ways of dispensing with arrears that are poorly evidenced, to ensure that both parents have faith in the sums being pursued. (Paragraph 91)

23. We have received evidence critical of the correspondence provided by the Child Maintenance Service. For example, paying parents reported asking for details on how substantial arrears had accrued and receiving no effective information in response. This risks exacerbating hostility by preventing paying parents from having confidence in the debts being pursued. (Paragraph 92)

Matters of interest to both receiving and paying parents

24. 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. (Paragraph 100)

25. It is particularly difficult to understand how fees, intended to incentivise the use of Direct Pay, can be justified in cases where the Department appears to have accepted such arrangements are not appropriate, such as in cases of domestic abuse. The Department should introduce a mechanism to waive Collect and Pay fees for customers who have been subject to domestic abuse, or whose children have suffered abuse, be they paying or receiving parents. The evidence base for this should be the same as the evidence base that the Government sets out for cases to skip Direct Pay and move straight to Collect and Pay. (Paragraph 101)

26. We strongly support the Child Maintenance Service’s plans to move to having a named caseworker, initially for customers in abusive situations before eventually being rolled out to all customers. The experience of having to recount one’s story multiple times was a particular issue we heard about in our inquiry and the Department’s plans have the potential to improve customer service outcomes substantially. We would welcome data being provided to the Committee quarterly to demonstrate progress against assigning customers named caseworkers. (Paragraph 110)

27. We have heard that perceptions of the levels of customer service of the CMS continue to be poor for both paying and receiving parents. The Department should develop its management information to allow it to demonstrate it is delivering good customer service and report publicly on this regularly. We recommend the Department should publish this information on a yearly basis as part of the Department’s annual customer experience survey returns. (Paragraph 111)

28. We acknowledge that staff working for the Child Maintenance Service can have a difficult caseload and come across difficult and distressing situations routinely as part of their work. To ensure that staff are able to support customers, appropriate training and support is essential. The Government should review, within six months of this Report being published, the support and training provided to CMS staff and report its findings to the Committee, alongside the actions it will take in response to remedy any issues identified. (Paragraph 112)

29. The current opening hours of the CMS helpline were criticised in our roundtable discussions, particularly from parents who had work commitments. We recommend the Government trial different opening hours for the CMS, to include weekends. This could be achieved by reducing the opening hours on some weekdays. (Paragraph 113)

30. Customers only being able to contact the CMS via letters or telephone is slow and antiquated. The CMS should introduce an electronic messaging system, or at least an ability for customers to contact them by e-mail to provide greater levels of customer convenience. (Paragraph 115)

31. In summary: Our inquiry has found a number of issues with the Child Maintenance Service that need to be addressed. Receiving parents continue to report great frustration at ineffective and slow enforcement. Paying parents have described distress and being pushed into poverty by the unaffordability of child maintenance payments. This harms the effectiveness of a system with an important role to play in tackling child poverty in separated families. (Paragraph 116)

Formal minutes

Wednesday 19 April 2023

Members present

Sir Stephen Timms, in the Chair

Debbie Abrahams

Siobhan Baillie

Shaun Bailey

Neil Coyle

David Linden

Steve McCabe

Nigel Mills

Selaine Saxby

Sir Desmond Swayne

Children in poverty: Child Maintenance Service

Draft Report (Children in poverty: Child Maintenance Service), proposed by the Chair, brought up and read.

Ordered, That the draft Report be read a second time, paragraph by paragraph.

Paragraphs 1 to 116 read and agreed to.

Annex and Summary agreed to.

Resolved, That the Report be the Sixth Report of the Committee to the House.

Ordered, That the Chair make the Report to the House.

Ordered, That embargoed copies of the Report be made available (Standing Order No. 134).

Adjournment

Adjourned till Wednesday 26 April 2023 at 9.00 am

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Witnesses

The following witnesses gave evidence. Transcripts can be viewed on the inquiry publications page of the Committee’s website.

Wednesday 7 September 2022

Cristina Odone, Head of the Family Policy Unit, Centre for Social Justice (CSJ); Meghan Meek-O’Connor, Senior Policy Advisor, Save the ChildrenQ1–25

Victoria Benson, CEO, Gingerbread; Caitlin Logan, Policy, Research and Influencing Lead, One Parent Families Scotland; Michael Lewkowicz, Director of Communications & Business Manager, Families Need FathersQ26–53

Wednesday 19 October 2022

Dr Christine Davies, Honorary Senior Lecturer in Mathematics, Royal Holloway University of London; Dr Jon Symonds, Senior Lecturer in Social Work with Children and Families, University of Bristol; Professor Esther Dermott, Professor of Sociology and Social Policy, University of Bristol; Dr Mia Hakovirta, Department of Social Research, Turku University, FinlandQ54–107

Wednesday 2 November 2022

Joshua Reddaway, Director Work and Pensions Value for Money, National Audit OfficeQ108–161

Wednesday 18 January 2023

Viscount Younger of Leckie, Parliamentary Under-Secretary of State, Department for Work and Pensions; Arlene Sugden, Director, Child Maintenance Service, Department for Work and Pensions; Hilda Massey, Director, State Pensions, Child Maintenance and Devolution, Department for Work and PensionsQ162–255

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Published written evidence

The following written evidence was received and can be viewed on the inquiry publications page of the Committee’s website.

CMS numbers are generated by the evidence processing system and so may not be complete.

1 Anonymous (CMS0008)

2 Anonymous (CMS0031)

3 Barrett, Richard (CMS0012)

4 Baker, John (CMS0013)

5 Child Poverty Action Group (CPAG) (CMS0023)

6 Davies, Dr Christine (CMS0028)

7 Davies, Dr Christine (Honorary Senior Lecturer in Mathematics, Royal Holloway University of London) (CMS0021)

8 Department for Work and Pensions (CMS0024)

9 Dutton, David (CMS0009)

10 Evans, Faye (CMS0007)

11 Families Need Fathers - ‘because both parents matter’ (CMS0022)

12 Forster, Mr Michael (CMS0004)

13 Gingerbread, the charity for single parent families (CMS0016)

14 Hamilton, Suzanne (CMS0010)

15 Hitchings, Professor Emma; Caroline Bryson; Professor Gillian Douglas; Dr Susan Purdon; and Dr Jenny Birchall (CMS0027)

16 James (CMS0014)

17 Mclaughlan, Ross (CMS0003)

18 National Audit Office (CMS0026)

19 One Parent Families Scotland (CMS0015)

20 Round, Rachel (CMS0001)

21 Russell, Rajan (CMS0011)

22 Save the Children UK (CMS0017)

23 Split the Difference (CMS0029)

24 Symonds, Dr Jon (Senior Lecturer in Social Work with Children and Families, University of Bristol); Professor Esther Dermott (Professor of Sociology and Social Policy, University of Bristol); Professor Emma Hitchings (Professor of Family Law, University of Bristol); and Dr Eleanor Staples (Lecturer, University of Bristol) (CMS0019)

25 Tierney, Stephen (CMS0025)

26 Willcox, Mr; and David Lee (CMS0006)

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List of Reports from the Committee during the current Parliament

All publications from the Committee are available on the publications page of the Committee’s website.

Session 2022–23

Number	Title	Reference
1st	The appointment of Dominic Harris as the Pensions Ombudsman and the Pension Protection Fund Ombudsman	HC 465
2nd	The cost of living	HC 129
3rd	Protecting pension savers – five years on from the pension freedoms: Saving for later life	HC 126
4th	Universal Credit and childcare costs	HC 127
5th	Health assessments for benefits	HC 128
1st Special	Children in poverty: No recourse to public funds: Government Response	HC 328
2nd Special	The Health and Safety Executive’s approach to asbestos management: Government Response to the Committee’s Sixth Report of Session 2021–22	HC 633
3rd Special	The cost of living: Government Response to the Committee’s Second Report of Session 2022–23	HC 671
4th Special	Protecting pension savers—five years on from the pension freedoms: Saving for later life: Government, Financial Conduct Authority and Money and Pensions Service Responses to the Committee’s Third Report of Session 2022–23	HC 1057
5th Special	Universal Credit and childcare costs: Government Response to the Committee’s Fourth Report of Session 2022–23	HC 1266

Session 2021–22

Number	Title	Reference
1st	DWP’s preparations for changes in the world of work	HC 216
2nd	Disability employment gap	HC 189
3rd	Children in poverty: Measurement and targets	HC 188
4th	Pension stewardship and COP26	HC 238
5th	Protecting pension savers—five years on from the Pension Freedoms: Accessing pension savings	HC 237
6th	The Health and Safety Executive’s approach to asbestos management	HC 560
7th	Children in poverty: No recourse to public funds	HC 603

Session 2019–21

Number	Title	Reference
1st	DWP’s response to the coronavirus outbreak	HC 178
2nd	The appointment of Dr Stephen Brien as the Chair of the Social Security Advisory Committee	HC 733
3rd	Universal Credit: the wait for a first payment	HC 204
4th	The temporary increase in Universal Credit and Working Tax Credit	HC 1193
5th	Protecting pension savers—five years on from the pension freedoms: Pension scams	HC 648
6th	The appointment of Sarah Smart as Chair of the Pensions Regulator	HC 1358

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Footnotes

1 Children in poverty: Measurement and targets, Third Report of Session 2021–22.

2 Children in poverty: No recourse to public funds, Seventh Report of Session 2021–22

3 Separated families statistics: April 2014 to March 2021, Department for Work and Pensions, March 2022

4 ONS, Families and households, March 2022

5 Households below average income: for financial years ending 1995 to 2022, Department for Work and Pensions, March 2023

6 Department for Work and Pensions (CMS0024)

7 Full terms of reference can be found in our call for evidence

8 Child Maintenance Service statistics: data to March 2022 (experimental), July 2022

9 Sir David Henshaw Recovering child support: routes to responsibility Cm 6894 2006 p 16–17

10 Schedule 1, Child Support Act 1991 (as amended)

11 Regulation 50, The Child Support Maintenance Calculation Regulations 2012; Correspondence from the Department dated 9 February 2023

12 National Audit Office, Child Maintenance, Session 2021–22, HC 1139, 3 March 2022, para 3

13 Ibid, paras 12–30

14 Committee of Public Accounts, Ninth Report of Session 2022–23, Child Maintenance, HC 255

15 Treasury minutes: Government response to the Committee of Public Accounts on the Ninth report from Session 2022–23, October 2022

16 Independent review of the Child Maintenance Service (CMS) response to domestic abuse, Dr Samantha Callan, published January 2023

17 Government response to the independent review of the Child Maintenance Service response to domestic abuse, Policy paper, published January 2023

18 Q55

19 Gingerbread (CMS0016)

20 Ibid

21 National Audit Office, Child Maintenance, Session 2021–22, HC 1139, 3 March 2022, paras 2.11–2.13 and figure 8

22 Ibid, paras 20 and 32(c)

23 Gingerbread (CMS0016); National Audit Office, Child Maintenance, Session 2021–22, HC 1139, 3 March 2022, para 2.13

24 National Audit Office, Child Maintenance, Session 2021–22, HC 1139, 3 March 2022, para 2.13

25 Child Maintenance Service statistics: data to March 2022, Department for Work and Pensions, July 2022

26 Save the Children UK (CMS0017)

27 Gingerbread (CMS0016)

28 One Parent Families Scotland (CMS0015)

29 Q27

30 Department for Work and Pensions (CMS0024)

31 Q114

32 Child Maintenance Service statistics: data to September 2022, December 2022

33 National Audit Office, Child Maintenance, Session 2021–22, HC 1139, 3 March 2022, para 22

34 Ibid, para 2.15

35 Gingerbread (CMS0016)

36 Department for Work and Pensions (CMS0024)

37 Qqs2, 3 and 27; Save the Children UK (CMS0017)

38 Q70

39 See for example One Parent Families Scotland (CMS0015); Gingerbread (CMS0016)

40 One Parent Families Scotland (CMS0015)

41 Q21

42 National Audit Office, Child Maintenance, Session 2021–22, HC 1139, 3 March 2022, para 18

43 Ibid, para 2.7

44 Q222

45 National Audit Office, Child Maintenance, Session 2021–22, HC 1139, 3 March 2022, para 2.7

46 Committee of Public Accounts, Ninth Report of Session 2022–23, Child Maintenance, HC 255

47 Treasury minutes: Government response to the Committee of Public Accounts on the Ninth report from Session 2022–23, October 2022

48 Committee of Public Accounts, The Department for Work and Pensions’ Accounts 2021–22 – Fraud and error in the benefits system, Twenty-Sixth Report of Session 2022–23, November 2022

49 A deduction may need to be “partial” because of, for example, interactions with the 25% deduction cap.

50 Q191, Correspondence from the Department dated 9 February 2023

51 Q191

52 Q193

53 National Audit Office, Child Maintenance, Session 2021–22, HC 1139, 3 March 2022, Para 2.18

54 Q193

55 See for example, Work and Pensions Committee, Second Report of Session 2022–23, the Cost of Living, HC 129

56 Q27

57 Gingerbread (CMS0016)

58 National tables: Child Maintenance Service statistics, data to September 2022, Tables 2 and 3

59 ONS, Domestic abuse in England and Wales overview: November 2022, 25 November 2022

60 Q4

61 Ibid

62 Independent review of the Child Maintenance Service (CMS) response to domestic abuse, Dr Samantha Callan, published January 2023, para 263.

63 One Parent Families Scotland (CMS0015)

64 Child Support Collection (Domestic Abuse) Bill, HL Bill 110, as brought from the Commons

65 Independent review of the Child Maintenance Service (CMS) response to domestic abuse, Dr Samantha Callan, published January 2023, para 246.

66 Ibid, paras 300–301

67 Q163

68 Q168

69 In this context “statutory arrangement” means either Direct Pay or Collect and Pay.

70 National Audit Office, Child Maintenance, Session 2021–22, HC 1139, 3 March 2022, appendix four

71 Separated families statistics: April 2014 to March 2021

72 Correspondence from the Department dated 9 February 2023

73 Survey of Separated Parents, July 2022

74 National Audit Office, Child Maintenance, Session 2021–22, HC 1139, 3 March 2022, Para 1.22

75 Survey of Separated Parents, July 2022, Figure 15

76 Q121

77 The Hidden Parent Poverty Trap: Child Maintenance and Universal Credit, Centre for Social Justice, March 2019; SSAC Occasional Paper 22: Separated parents and the social security system, July 2020

78 Q59

79 Independent review of the Child Maintenance Service (CMS) response to domestic abuse, Dr Samantha Callan, published January 2023, footnote 88.

80 Government response to the independent review of the Child Maintenance Service response to domestic abuse, policy paper, January 2023

81 Q85;

82 Families Need Fathers (CMS0022)

83 Mr Michael Forster (CMS0004)

84 Q34

85 Dr Christine Davies (CMS0021)

86 National Audit Office, Child Maintenance, Session 2021–22, HC 1139, 3 March 2022, Para 2.24

87 Q7

88 Q89

89 Q244

90 Q175

91 Independent review of the Child Maintenance Service (CMS) response to domestic abuse, Dr Samantha Callan, published January 2023, para 223

92 Ibid, recommendation 5

93 Independent review of the Child Maintenance Service (CMS) response to domestic abuse, Para 299

94 The Hidden Parent Poverty Trap: Child Maintenance and Universal Credit, Centre for Social Justice, March 2019.

95 Ibid, pg 13

96 Q242

97 Q244

98 Families Need Fathers (CMS0022)

99 SSAC Occasional Paper 22: Separated parents and the social security system, July 2020

100 Survey of Separated Parents, Department for Work and Pensions, July 2022

101 Q27

102 See for example, Split the Difference (CMS0029)

103 Q113

104 Q112

105 Client Funds Account 2021/22: 1993 and 2003 Child Maintenance Schemes

106 Split the Difference (CMS0029)

107 Mr Richard Barrett (CMS0012)

108 Department for Work and Pensions (CMS0024)

109 Q179

110 Gingerbread (CMS0016)

111 Save the Children UK (CMS0017)

112 One Parent Families Scotland (CMS0015)

113 Gingerbread (CMS0016); Save the Children UK (CMS0017);

114 Families Need Fathers (CMS0022)

115 Q33

116 Q64

117 Gingerbread (CMS0016)

118 Independent review of the Child Maintenance Service (CMS) response to domestic abuse, Dr Samantha Callan, published January 2023, para 270

119 Correspondence from the Department dated 9 February 2023

120 Q205

121 National Audit Office, Child Maintenance, Session 2021–22, HC 1139, 3 March 2022, Para 27 and figure 16

122 Q34

123 Q8

124 National Audit Office, Child Maintenance, Session 2021–22, HC 1139, 3 March 2022, para 3.12

125 Correspondence from the Department dated 9 February 2023

126 Government response to the independent review of the Child Maintenance Service response to domestic abuse, Policy paper, published January 2023

127 Q200

128 Q252

129 Qqs253–255

130 Q255