Child Maintenance Service: Payment Recovery from Absent Parents

(Limited Text - Ministerial Extracts only)

Wednesday 2nd October 2019 Westminster Hall

[Peter Grant]

I need to make a bit of progress. If I have time later, I will give way to the hon. Lady. I am grateful for her interest in the debate.

Something that has been a major concern for many of my constituents recently is the Child Maintenance Service’s decision to write off debts that somebody has been owed for a significant time. Sometimes that is a relatively small amount of money, but it can open up all the old wounds again if the parent who is owed that money suddenly gets a letter from the CMS after 10 years, having heard nothing from it, as happened to one of my constituents recently.

Another constituent has been asked to agree to writing off a debt of £18,000 that she is owed for the children she has raised on her own. Her children are now grown up, and people could argue that they do not need the money, but the person who owes the money certainly does not need it. I do not think that is acceptable, any more than it would be acceptable for the HMRC to decide not to bother chasing somebody who owed £18,000 of tax. In the case I have referred to, the Child Maintenance Service knows where the absent parent is. It knows where he lives, it knows where he works and it knows his bank account details, so there is no excuse whatsoever not to require him to enter into some kind of arrangement to pay his children the money he owes.

[The Minister for Disabled People, Health and Work (Justin Tomlinson)]

On that specific point, they will have been contacted. If that information is available and they would like that £18,000 debt to be pursued, it would be, and it would be a priority.

[Peter Grant]

Interestingly enough, when I contacted the Child Maintenance Service about that specific case, it promised to give us a fuller response by 3 October, so it has about 20 minutes left. If we finish a wee bit early, the Minister might be able to get on to his colleagues and ensure that they honour that. Of course, it may be that they have responded during the time that I have been on my feet.

Far too often, the parent who has the main responsibility for looking after the children physically is left to fight battle after battle with the CMS to get the money that is theirs and their children’s by right. Often, they feel as if the CMS is not working with them, but is almost acting as an obstacle to them. Far too often, when I look through the cases that have come in to my office since I was elected, the final point is that the parent has just given up and feels it is not worth chasing things up. Very often, they can no longer stand the stress of being forced to continue to contact somebody who, quite frankly, they never want to hear from again because of the way that person treated them while they were together. It is not only a tragedy, but a scandal, if somebody is forced to give up the fight for what they are legally entitled to simply because a Government agency has not supported them enough in the process.

--- Later in debate ---

[Justin Tomlinson]

To be absolutely clear, child maintenance does not impact on the amount of benefits the receiving parent will get, whether it is paid or not paid. It did under the old system of the Child Support Agency, but it does not under the new system.

[Ruth George]

That is very good to hear, although it is certainly very different from how the regulations for universal credit were set out at the time. If those regulations are changing, that is good.

However, it remains the case that women who are due to receive child maintenance are not getting the support from the CMS that they need, and it is all too easy for men in general to evade their responsibilities by hiding their money and income, and it then takes years for people to be able to claim that, and for children to receive the support they need, as has been highlighted here today.

The Minister’s team have listened to many cases from my constituency surgeries. We have yet to see decisive action taken against those defendants; I hope that it will be, but we really should not have to meet senior civil servants in the Department in order to get any action taken.

--- Later in debate ---

[The Minister for Disabled People, Health and Work (Justin Tomlinson)]

It is a pleasure to serve under your chairmanship, Mr Owen.

I pay tribute to the hon. Member for Glenrothes (Peter Grant) for calling this debate. On the basis of all the contributions, it is clear that this is one issue that unites those in all parts of the House, and that we want to do the very best for those receiving parents who have taken on the primary responsibility of the childcare and are having to battle to get the support that they rightly should be getting.

Let us remember that the CMS is a service of last resort. We would all hope that, wherever possible, parents can make amicable arrangements that do not necessarily need our involvement and have no impact on the children. Where that cannot be the case, however, because either one parent is or both parents are in dispute about what their responsibilities should be, it is absolutely the case that the CMS is there to provide support.

I want to make it very clear that all the cases raised show why this is such an important area, where we have brought forward significant new regulations and powers. I will go through some of those processes, but I repeat: a lot of the cases raised are legacy cases that would initially have been dealt with under the old rules and show why we have brought forward the rules I am going to talk about. There is still much more to do, and we are working very closely with stakeholders, including organisations such as Gingerbread, and on the other side those such as Families Need Fathers, which can provide constructive and helpful feedback. It is about getting balance between both sides.

There are around 700,000 cases a year. We record 2,500 complaints a year, which is less than 0.5%, but we still want to go further. We are absolutely focused on improving the customer experience. I pay tribute to my hon. Friend the Member for Stirling (Stephen Kerr), who I know has been proactive in this area. I must stress that I am not actually the Minister responsible for child maintenance, although I used to be; I have a great deal of interest in this area both as a constituency MP who raises cases and having served in a different role in DWP. Everything will be passed on to the relevant Minister. I would like my hon. Friend to meet the operations team, because some concerning operational issues were raised.

Customer experiences are shared with the senior management team. We work with stakeholders, and we also work with key organisations such as Womens Aid, which have done a huge amount to improve our ability to identify either victims or potential victims of domestic abuse, so we can tailor the service accordingly.

The initial contact with the service is with child maintenance options. That is not automatic; people must have a conversation, which will explain all the options available to them. Many people do not wish to use the process; they just want to have an amicable arrangement but would like some guidance on a starting point for those discussions. We can provide that information and signpost to other organisations, and that can open the gateway to looking at options such as direct payment or click and collect.

[Deidre Brock]

I note the Minister’s offer to the hon. Member for Stirling (Stephen Kerr) to meet the operations team. Is that offer open to all of us who have participated in this debate?

[Justin Tomlinson]

That is a fair point. I am sure the team would be very happy to meet those who are particularly interested in the operations side.

On direct payment, there are cases where we have advised what the financial contribution should be, and the parents set out to try and do that without using us. A number of people have highlighted how that can break down. The problem is then that the debts mount up, and the bigger the debts, the bigger the problem it is to get that fixed. So, we have rightly tried to be more proactive. Not only is there the annual review, but we now text the receiving parents proactively to ask whether there are any issues, and if there are issues, we ask that they should contact us immediately so we can either escalate ultimately to enforcement or move them on to the click-and-pay service. In the last quarter of last year, 9,000 people moved from direct pay to collect and pay. We are nudging that proactive level of support as quickly as possible.

The shadow Minister, the hon. Member for Weaver Vale (Mike Amesbury), talked of 33% not being collected on collect and pay. The 67% was the last published figure, in June 2019, which is up from 62% in the previous year, and the improvement has been long-standing. The amount unpaid in June 2019 was £18.5 million, down from £22 million. That is £18.5 million too much, but we are heading in the right direction, through a combination of better training of our frontline staff, so that they can explain the options and potential punishments to both the receiving parent and the paying parent; better enforcement, which I am coming to; and the regulations that we passed to strengthen our ability to investigate and enforce.

Hon. Members have rightly raised areas where enforcement has not been quick enough. The right hon. Member for East Ham (Stephen Timms) set out the exact reasons that we needed the two separate sets of regulations that were brought in over the last 12 months, which we did after listening to the cases, learning the lessons and seeing what was missing and what stopped us taking the action we all support. That is underlined by the fact that action must be taken much more quickly. The sooner we act, the easier it is to remedy.

We are also now benefiting from the ability to access more real-time information from HMRC and the strengthening of our ability with deduction orders, where we take money directly from people’s salaries. We are also reminding employers. Quite often, employees will say to an employer who is their friend, “My other half is being unreasonable. It would be really helpful if you helped me fudge this.” We are now using legal powers to remind employers that they will be liable and, unsurprisingly, those collections have gone up to 48,000 in the last quarter, collecting about £26 million, compared with the same quarter last year when there were 31,300 collections, collecting £19 million. We are also proactively highlighting success stories in the media, which doesn’t half focus people’s minds.

The most significant change is the introduction of the financial investigations unit. In the past, when lifestyle queries were raised, we relied on HMRC to investigate. HMRC had finite resources; if a premier league footballer was clearly defrauding it of a huge amount of tax, it was very quick to go and look at that, but, for many of the cases highlighted, while it was a significant amount of money to those children, it might not have been enough for HMRC to prioritise it.

The financial investigations unit, which is solely ours, does not look at the value of the money, because the money is as important to every single parent regardless, and it will chase each case. These are highly-trained ex-police officers and tax inspectors with fiscal investigation experience and they focus on doing a deep dive, using evidence, in these sorts of case. We initially recruited 30 in 2017 and it went up to 50 in 2018 and 80 in 2019. They are making a significant difference; about 4,000 cases are being investigated at the moment, and those numbers will increase as we gain evidence. That is a double win, because we will share that evidence with HMRC, which can chase any tax avoidance that has gone through.

The new regulations that we passed to help here include the ability to seize people’s passports. In the past, we went after drivers’ licences, but when people went to court, they would say, not unreasonably, “Well, you can take my driving licence, but I then won’t be able to earn, and I won’t be able to pay any more money.” But the possibility of losing their summer holiday doesn’t half focus the mind. Having sent out more than 1,000 warning letters, there is high engagement at that point.

We now have powers to access joint and business accounts, because that is a clever trick of solely employed people for hiding money. We can also look at assets, so when self-employed people are transferring what would be wages into assets, we can now take a nominal 8% of those assets. It is now easier to access information from pension providers, and we will be doing more joint work with HMRC. I gently remind some colleagues who have been calling for those extra powers to vote for them next time, because some hon. Members voted against. We must put the receiving parents first.

[Albert Owen (in the Chair)]

I am grateful to the Minister, who has been a great deputy here today on behalf of his Department. Before I call Mr Peter Grant to wind up, I thank all hon. Members for their self-discipline and restraint about time, which has allowed us to get in all speakers, as well as a number of interventions.