Child Maintenance Service

Edward Leigh Excerpts

Tuesday 23rd July 2019 Westminster Hall

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

I beg to move,

That this House has considered the effectiveness of the Child Maintenance Service.

It is a pleasure to serve under your chairmanship, Sir Edward. I thank everyone for attending, and the House of Commons Library and the digital engagement team for their contributions to the debate.

Members are likely all aware that the Child Maintenance Service, which administers the 2012 child maintenance scheme, is frequently raised by various means in this place. This year alone, up until the end of last week, 28 cross-party MPs, including me, have asked a total of 109 parliamentary questions directly related to child maintenance. On the Floor of the House, three MPs have suggested holding a debate. All those instances correlate to the processes and the performance of the Child Maintenance Service, which is failing many constituents across the British Isles—both paying and receiving parents.

[Sir Edward Leigh (in the Chair)]

Order. Could you speak a bit louder, please? The acoustics are not very good in here.

[Martyn Day]

No problem—I appreciate that.

The last request for a debate on improving the Child Maintenance Service was made by my hon. Friend the Member for Lanark and Hamilton East (Angela Crawley), who secured an Adjournment debate on the Child Maintenance Service some 20 months ago, to highlight concerns about the inadequacies of the service that she had become aware of through her constituency work. Those concerns include the struggles and inconsistencies faced by constituents dealing with the Child Maintenance Service, as well as sensitive safety issues faced by domestic abuse survivors.

I commend my hon. Friend’s efforts to remove the 4% charge that parents with care who have survived domestic abuse have to pay when they are left with no option but to use the collect and pay service. Besides effectively meaning that 4% of children’s maintenance entitlement goes to the Treasury, it is also a means for an abusive paying parent to perpetuate their control over the receiving parent, thereby continuing the cycle of abuse. As my hon. Friend highlighted in November 2017, it is commonly known that one of the biggest impediments to domestic abuse survivors achieving independence from the abusive relationship relates to financial control.

All those months ago, the Minister responding to my hon. Friend’s debate, the Under-Secretary of State for Work and Pensions, the hon. Member for Hexham (Guy Opperman), advised that the Government aimed

“to take immediate action to re-establish compliance wherever a parent fails to pay what they owe”

and that one of their priorities was ensuring that action was taken

“to maintain compliance in the statutory scheme, so that…children can benefit from maintenance payments.”—[Official Report, 16 November 2017; Vol. 631, c. 701-704.]

It will shortly become evident that that prioritisation is not happening, certainly in the cases that I will raise.

Another way the Child Maintenance Service has been raised is through a private Member’s Bill sponsored by my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows). The Child Maintenance Bill aims to remove certain fees charged by the Child Maintenance Service, and to make provisions for child maintenance payment calculations. The Bill was read the First time on 6 November last year, but still awaits its Second Reading. Perhaps the time has come for it to make some progress.

Furthermore, just last month the Child Support (Miscellaneous Amendments) Regulations 2019, which amend child maintenance legislation to enable the delivery of the child maintenance compliance and arrears strategy, were approved in the House. The then Minister, who is also present today, announced that the Child Maintenance Service was working well, and pointed to the

“tough new sanctions for those who evade their responsibilities”.—[Official Report, 11 June 2019; Vol. 661, c. 583.]

However, I called for today’s debate because, as its regular appearances in parliamentary matters, which I have just highlighted, clearly show, the Child Maintenance Service might be working well for some but is certainly not working well for all. The debate requests that relate in particular to the processes and performance of the Child Maintenance Service show that many constituents across the British Isles, both paying and receiving parents, are being let down by the current system.

I warmly welcome the introduction of tough new sanctions for those who evade their parental responsibilities, but if the enforcement actions are not applied they are a blunt tool that does nothing to encourage paying parents to meet their obligations. We must not see a repeat of the National Audit Office report of March 2017, which noted that, compared with 2012-13, in 2015-16 there had been, with regard to the use of some types of collection and enforcement action in respect of arrears due for the 1993 and 2003 schemes, a 69% decrease in the use of deductions from earnings orders; a 73% decrease in bailiff referrals; a 77% decrease in liability orders, which allow enforcement powers to be used; and a 98% decrease in prosecutions.

Today’s debate will consider the difficulties faced by so many of our constituents and the reasons why the Child Maintenance Service is failing them. In doing so, our discussions will hopefully also consider what can be done to remedy those failings, so that all children can benefit from receiving maintenance payments that are consistent and compatible with the paying parent’s income level.

In my constituency alone, I have been contacted by 55 people who have essentially reached crisis point due to the treatment that they have received because of the Child Maintenance Service procedures. Those 55 cases represent the tip of the iceberg in my opinion. It has an impact across extended families as well. A father of one parent with care felt compelled to speak to me independently to describe the financial and emotional devastation that his daughter and grandchildren were experiencing because the paying parent was doing everything in his power to dodge his responsibilities.

I will momentarily discuss that case in more detail, and others in my constituency, but there must be a fundamental deficit in any system that allows that to happen. We must do all that we can to address that deficiency. The numbers that I am seeing suggest hundreds of detrimentally affected family members in my constituency alone, and tens of thousands across the UK. Clearly, the ineffectiveness of the Child Maintenance Service has a negative impact on a significant number of people.

That is certainly supported by the nearly 1,000 people who responded to the House of Commons Facebook post and the Mumsnet thread that invited comments ahead of the debate. I thank each and every person who made the effort to share their experiences on those forums —many of them were quite traumatic tales. Unfortunately, time limitations restrict me from disseminating individual accounts, although I will highlight the stories of my constituents, which mirror many of the issues raised on those forums. However, I can state that almost none of the paying and receiving parents who responded had had a positive experience in dealing with the Child Maintenance Service. Recurring themes included problems arising from payments being calculated on gross income and on incorrect and out-of-date information, and how calculations result in poverty and debt, which lead to mental health impairment and even suicidal tendencies. Additionally, users experience inconsistent information and standards of service.

My constituent Susie first approached me nearly four years ago, in September 2015, after the father of her children moved to self-employed status and dramatically decreased the maintenance he paid for his children’s upkeep. Indeed, during the non-resident parent’s change of employment status he paid nothing towards his children’s upkeep for almost a year. Susie suspected that he was not being truthful about his declared earnings, as they did not equate with the lifestyle he enjoyed. She approached the Child Maintenance Service to investigate but was duly advised to contact Her Majesty’s Revenue and Customs, which in turn told her to contact a private investigator—an unlikely financial priority when someone is struggling to provide for their children. HMRC procedures are arguably another matter for debate in this place, but that will have to wait for another day.

Before the 2012 child maintenance scheme was introduced, the resident parent could apply for a variation if a non-resident parent had either a lifestyle inconsistent with their income or assets of more than £65,000. In May 2017, the Work and Pensions Committee called for those provisions for parents to challenge child maintenance awards on the grounds of assets and lifestyle inconsistent with income to be reinstated—a call that I reiterate and support—and two private Members’ Bills have been introduced since April 2017 that have, thus far unsuccessfully, sought to implement such a change. However, although the Government’s position is that they have

“no plans to reintroduce this provision”,

they have, since December 2018, introduced a new notional income criterion that they say would

“be useful in a range of scenarios including where we believe paying parents have made an effort to use complex financial arrangements to evade their responsibility.”

At least one step has therefore been made in tackling that type of liability dodging, but it needs decisive action to back it up, not the decrease in action that I have witnessed.

--- Later in debate ---

[Will Quince]

My door is always open to colleagues from both sides of the House, and I would be happy to meet the hon. Lady to discuss that particular case in detail.

I mentioned the shortcomings of the CSA, which did not provide the right support to parents and was expensive to run. We have learned from mistakes of the past: where the previous system often drove a wedge between parents by taking away their responsibility and choice, the new system encourages collaboration at every stage. We know that a constructive, co-operative relationship between separated parents has a direct positive impact on child outcomes such as health, emotional wellbeing and academic attainment—a point made by my hon. Friend the Member for Henley (John Howell). That is why, wherever possible, we support separated mothers and fathers to work together in the interests of their children and set up their own family-based maintenance arrangements.

Private family-based arrangements allow families to create flexible arrangements that work for their individual circumstances. Such flexible arrangements can include sharing of care, agreements over who will pay for essentials and treats, and financial transfers. They can change as the children grow and can help children to experience having both their parents take an active role in their lives.

We recognise that, post separation, the majority of parents want to continue to do the right thing for their children. We want to ensure that as many families as possible have an effective arrangement for maintenance in place; for those who are unable to make a private arrangement, the Child Maintenance Service provides the support of a statutory scheme. The Child Maintenance Service delivers a simplified statutory system with increased levels of automation, which allows cases to be processed much more quickly and with higher levels of accuracy than was achieved under previous schemes.

The CMS provides an effective, efficient service, to be used as a last resort where parents are unwilling to meet their responsibility to financially support their children voluntarily. This means that cases in the statutory service tend to be more difficult and relationships between the parents in these cases are often fraught and conflicted. While we continue to use all the tools at our disposal to maintain compliance and recover arrears, it is sadly inevitable that some arrears will accrue, as some parents go to great lengths to avoid their responsibilities. That is not acceptable and we are taking action to tackle it. Last November, this House approved regulations tackling a number of issues—closing down loopholes, introducing tough new sanctions for those who evade their responsibilities, and dealing with the historic arrears that built up under the Child Support Agency.

The hon. Member for Linlithgow and East Falkirk and my hon. Friend the Member for Stirling (Stephen Kerr) raised questions about the CMS’s performance. The Child Maintenance Service is performing well. The most recent statistics show that 94% of new applications were cleared within 12 weeks and 79% of change of circumstances actions were cleared within 28 days. We are seeing unprecedentedly high levels of compliance, with 67% of parents due to pay child maintenance through the collect and pay service having paid some maintenance in the quarter ending March 2019, up from 60% one year earlier.

Although the case load on the service has been growing steadily since it opened in 2012, the number of complaints and appeals received still represents less than 1% of that case load. We have continued to refine our processes to maximise compliance and debt recovery. Debt as a proportion of all maintenance arranged by the service has fallen since the launch of the 2012 scheme, from 17% in March 2015 to 11% in March 2019.

A number of colleagues, in particular my hon. Friend the Member for Stirling and the hon. Member for Motherwell and Wishaw (Marion Fellows), rightly mentioned customer service. The focus so far has largely been on tackling arrears and on recovery of debt, but my clear steer to officials is that I want the focus to be on customer services. We know that more than 80% of calls are answered, although I still think the 20% that are not is too many, and I want them answered in a timely fashion. My focus, while I remain in this role, will be on customer service.

A number of hon. Members raised the issue of enforcement, and we are taking far more action in that regard. We now have several court-based powers, including the use of enforcement agents, otherwise known as bailiffs, to seize goods, forcing the sale of the paying parent’s property. Approximately 7,100 paying parents in England and Wales are currently being pursued by civil enforcement agents for unpaid maintenance following a referral by the CMS.

Hon. Members also mentioned that the service can apply to have the paying parent sanctioned—by being committed to prison or disqualified from driving, for example. In addition to that, in regulations in November last year we launched the ability to disqualify non-compliant parents from holding a UK passport, which we believe will act as a strong deterrent. The service initiated 900 sanctions in the quarter ending March 2019 as a last resort against non-compliant paying parents.

The hon. Member for Strangford (Jim Shannon) raised the question of complex earners. We are aware of a small number of parents whose maintenance liability is inconsistent with their financial resources. Some choose to support themselves via a complex arrangement of assets rather than taking a salary. We are taking action to address that.

Parents can request a variation so that most forms of taxable income can be taken into account in the maintenance calculation, which will make it harder for individuals to avoid their responsibilities by minimising the amount of child maintenance they pay. The new powers that we introduced last year allow us to target complex earners via a calculation of notional income based on assets. In addition to the gross annual income provided by Her Majesty’s Revenue and Customs, we can capture income derived from property, savings and investments, including dividends, and other miscellaneous income. We also have the Financial Investigation Unit, which can investigate those parents who declare suspicious earnings or, where appropriate, refer to HMRC for tax fraud.

The FIU was first introduced in 2014, and since 2017 we have tripled the number of staff in that unit. It will look at any case where the receiving parent raises a concern over income and provides basic evidence to support it. I should stress that around 60% of FIU cases show no evidence of suppression of income. Nevertheless, it is an important part of the service. The hon. Gentleman also referred to the self-employed, which I suppose is similar to the situation of complex earners. We have new powers, enabling us to do deep-dive exercises and get to the bottom of cases where individuals are trying to suppress or disguise income. Perhaps I will meet him separately to go through that in a little more detail.

My hon. Friend the Member for Henley raised a number of points about the accuracy of CMS assessments. The accuracy of maintenance assessments has significantly improved; our annual client fund account shows that it is at 99%. Furthermore, the National Audit Office has not qualified CMS accounts for the past two years, which represents a significant improvement.

The hon. Members for Ellesmere Port and Neston (Justin Madders) and for Motherwell and Wishaw brought up the 25% threshold. I understand the concerns that they have raised. The point of the 25% threshold is to ensure that maintenance calculations are relatively stable, so both clients know what to expect in terms of payments. It also ensures that both parents are able to budget with certainty and provide ongoing maintenance for the child. I have met with the hon. Member for Motherwell and Wishaw to discuss this, and it is important to stress that most people’s income does not change to that degree over the course of one year.

My hon. Friend the Member for East Renfrewshire (Paul Masterton) and the hon. Member for Ellesmere Port and Neston—

[Sir Edward Leigh (in the Chair)]

Order. Could the Minister allow time for the mover to sum up the debate?

[Will Quince]

I am sorry, Sir Edward. I am conscious that I have not been able to cover many of the issues raised, but I hope hon. Members can see that the latest statistics show that the reformed Child Maintenance System is already making a big difference to the lives of separated families. We are seeing progressive improvements to the efficiency of the service. Our priority remains ensuring that this service is fit for purpose and, while I am in post, I will continue to ensure that it is.