Child Maintenance Service

Antoinette Sandbach Excerpts

Tuesday 18th April 2017 Westminster Hall

[Marion Fellows]

I thank the hon. Lady for her intervention. She is absolutely correct. Indeed, what she refers to ties in with the whole DWP agenda of closing offices. I will come on to the under-resourcing of that Department.

Even if parents have an understanding of what the CMS can do to assist them, there is a hesitance on the part of the CMS to take enforcement action. That is a major reason why arrears have been allowed to accrue historically and currently.

[Antoinette Sandbach (Eddisbury) (Con)]

Does the hon. Lady agree that in effect that deprives resident parents of their rights, because they have no other means of enforcement? Their legal rights to enforce through the courts have been taken away by the child maintenance system, and that leaves them powerless to pursue what is their right: the maintenance due to them for their children.

[Marion Fellows]

I thank the hon. Lady for her intervention. Again, I completely agree. When I went to the Backbench Business Committee to apply for this debate, I was aware even there of the consensus across the House on the lack of action and the failings of the Child Maintenance Service, and that is being reinforced by these interventions.

Variation claims place the burden of proof on the parents with care to show that their ex-partners’ incomes are misrepresented. I have constituents who have either hired private investigators or become private investigators themselves to prove to the CMS that their ex-partner is lying about their income. That is not their job; it should be the job of the CMS.

--- Later in debate ---

[Antoinette Sandbach (Eddisbury) (Con)]

I thank the hon. Member for Motherwell and Wishaw (Marion Fellows) for securing this debate. I should perhaps put on record that I have used the Child Support Agency for the last 13 years. I would liken most of that time to banging my head against a brick wall. I also spent four years as a caseworker supporting parents with their cases, particularly with the Child Support Agency, the predecessor to the Child Maintenance Service, due to my personal knowledge of the procedures.

My experience is that staff are not properly trained. CMS staff in particular, since the move to the Department for Work and Pensions, have no idea what their enforcement powers are, are extremely reluctant to use them and regularly fail to do so. Proper compensation is also lacking when the CMS makes mistakes. I appreciate that the volume of complaints to my inbox about the CMS is relatively small, but that is because the vast majority of 3 million cases are still under the CSA system and have not yet been transferred to the CMS. Given my experience, that is probably a blessing in disguise.

I know that that is not this Minister’s fault. I feel sorry for her, because she has taken over a system that has had systemic failings for years. The fact that £4 billion in arrears is outstanding demonstrates how catastrophically single parents in this country have been let down by a system that was supposed to make collections easier. The hon. Member for Motherwell and Wishaw has ably outlined some of the key problems on which Gingerbread has made recommendations: I will concentrate specifically on avoidance by self-employed parents.

As we know from the Chancellor’s recent statement, a vast number of people are moving to self-employment. Their numbers are growing, particularly among non-resident parents. Self-employment makes avoiding child maintenance easier—there are online forums that provide advice to non-resident parents on how to avoid paying child maintenance—and frankly, the Government have not stepped up to the plate. It is absolutely scandalous that parents whose legal rights to maintenance for their children have been taken away and given to the state find the state unwilling or unable to enforce those rights. That is not good enough, and in my view, it is discriminatory, because it operates largely against women, as 75% of single parents with care are women. The Government must examine the issue again.

I call for specific action by the Minister. In particular, I echo the calls on “lifestyle inconsistent with earnings”. It is ridiculous to suggest that a parent who might have separated from their partner 10, 13 or 15 years ago should have a detailed knowledge of their financial circumstances. Often, the only evidence available to show the Child Maintenance Service is evidence of a lifestyle inconsistent with earnings. For example, a constituent of mine who left his wife and set up with another partner had a Range Rover and foreign holidays abroad, but was £33,000 in arrears. Eventually, after a long court case, the matter went to a tribunal hearing. The evidence in that case was lifestyle inconsistent with earnings; it is vital that that clause be reinstated.

The Government must consider how tax rules are used to disguise assets. In particular, if someone is self-employed or a director of their own company and makes a director’s loan into the company, that asset is owned by them, and it means that they can take a large amount of money out of the company, but it is not considered an asset for the purposes of child maintenance. That is wrong. It allows abuse of the system, and it is being used a lot. That information should be available from Companies House and Her Majesty’s Revenue and Customs. The issue needs to be examined again.

Further, I urge the Government to consider giving women an enforceable right in the courts where there is an asset threshold. Where that asset threshold is set is a matter for the Minister and her team to decide, but if there are more than £500,000 in assets, for example, that case ought to fall outside the CMS, because they are not taken into account. For example, the family home is exempt from consideration among the assets of the non-resident parent.

It does not take much looking to find past cases in the tribunal system where there have been assets of several million pounds in the form of the family home, expensive sports cars and other high-value items that the CMS cannot take into account because they do not generate an income. That is a convenient shelter allowing high-net-worth individuals to avoid paying for their children. The issue is important. The women involved in these cases have no other way of enforcing their rights. The Government have removed their rights in court, and they need to be reinstated, because so many assets have been excluded from consideration that non-resident parents’ ability to pay for their children is not being reflected.

I mentioned earlier that CMS staff do not know their rights. The CMS is completely unwilling to request data from the Land Registry, for example. I support co-location of HMRC and CMS staff. HMRC should automatically notify the CMS if a non-resident parent’s claim for tax relief increases. If they put in a tax return and are claiming up to the tax-free allowance in income, the CMS should automatically be notified. We should have much more effective data sharing across Government to enable enforcement.

I fought the system as a single mum for eight years. As a lawyer, I thought that I would be able to understand and work the system, but even now that I am a Member of Parliament, we still cannot get it to work. It is really a scandal and a disgrace that lone parents are being let down so badly by a system that allows non-resident parents to manipulate it.

I am grateful for this debate. If, as a Government, we are to be there for everybody, we must support those who are least able to enforce their rights. The fact that their legal rights have been taken away means that the burden and responsibility on the Government are that much greater. Having practised as a barrister for 13 years or more, I know that a judge in the courts would look at these things very differently from the Government. Quite frankly, it is time to give women more rights to take these matters through the courts, or to make sure that staff are properly trained to take the necessary action and enforce the rules appropriately. I note that there are £3.9 million of arrears in the Minister’s constituency; regrettably, there are £5.4 million of arrears in mine. I say to any single parent who reads this debate: please contact your MP—allow us to try to help to make the system work for you.

When the CMS makes mistakes, it should compensate appropriately. The compensation regime for the CMS has changed since responsibility moved to the DWP. That is wrong, and I suspect that we will see some reports from the parliamentary ombudsman about maladministration claims against the DWP. It is unacceptable that when the Department has made mistakes, it has been the children who have had to pay for them. There are some simple steps that could be taken that would not necessarily cost the Government huge amounts of money, but which would help parents to enforce their rights.