Covid-19: Child Maintenance Service

Baroness Laing of Elderslie Excerpts

Thursday 21st January 2021 Commons Chamber

[Marion Fellows (Motherwell and Wishaw) (SNP) [V]]

I beg to move,

That this House has considered the operation of the Child Maintenance Service during the covid-19 outbreak.

I will do my very best to keep my speech within that time, Madam Deputy Speaker. I thank the Backbench Business Committee for granting this important debate, and all hon. and right hon. Members who signed my application and who are taking part today. I also thank the Under-Secretary of State for Work and Pensions, the hon. Member for Hexham (Guy Opperman), for attending today’s debate in place of Baroness Stedman-Scott, who sits in the other place.

The Child Maintenance Service has been, and still is, a fundamentally broken system that requires urgent action through a root-and-branch review. In spite of calls from across the Chamber, from One Parent Families Scotland and from Gingerbread, it is still to make the necessary changes. Nearly 750,000 children throughout the UK rely on the CMS. If the children of single parents who are in poverty and not receiving maintenance actually received the payment, it would lift 60% of all cases out of poverty.

The way in which the CMS has operated during this pandemic has simply exacerbated the existing problems. The whole of the Department for Work and Pensions has been under pressure during the pandemic, and staff have been working under incredible pressure to ensure that benefits are paid as quickly as possible. DWP staff have been rightly congratulated for what they have done, but the situation has affected the service from the CMS, which was failing many families even before covid-19 struck and staff were redeployed to help with universal credit and jobseeker’s allowance. The CMS is letting down parents with care and non-resident parents, but it is ultimately the children and young people the CMS is supposed to serve who are being deprived of the maintenance payments necessary for their upkeep.

Single parents are bearing the hidden costs of children being at home all day, with expenses for things such as extra heating, food and supplies for home-schooling. Some parents have needed to reduce paid work hours or stop employment completely during this period to care for their children. The financial impact means that many single parents are even more reliant on child maintenance payments. We need to see clear action from the UK Government to secure the financial support to which children in Scotland and across the rest of the UK are entitled.

The halting of the collection of CMS payments during the coronavirus lockdown has had a devastating impact on many single parents and their children, which is why the SNP has been calling on the UK Government to introduce a minimum maintenance payment to provide parents with care and their children a guaranteed income to prevent hardship and ensure a dignified standard of living. Our call has been backed by Gingerbread. In stark contrast, the Scottish Government are using their devolved powers to ensure that children and families are supported during this difficult time and to prevent them from being pushed into further hardship.

The SNP Government have led the way on tackling poverty this past year by introducing game-changing priorities such as the Scottish child payment, which is in addition to the Best Start grant, the baby box, free prescriptions and the mitigation of damaging Tory policies such as the bedroom tax. Westminster should be following Scotland’s lead by scrapping the poverty-inducing two-child limit and benefit cap and by keeping the £20 uplift to universal credit and working tax credit and extending it to legacy benefits. The Scottish Government provide free school meals during school holidays and look after children from poor backgrounds in school during lockdowns.

The amount collected through CMS enforcement has decreased markedly during the covid-19 outbreak, with many of the measures that the CMS normally uses to collect payment going unused as a result of the reduced service. Although compliance has apparently increased to 72% during the pandemic, this has been driven mainly by the significant influx of parents enrolling on to universal credit and having CMS payments deducted automatically. Following the halt on enforcement last year, the UK Government must now commit to the resumption of collections and the clearing of arrears accrued. I hope the Minister will explain how the CMS plans to maintain and increase compliance as and when parents are to re-enter the workforce.

The DWP’s own figures show that around 68% of parents on collect-and-pay contributed a form of payment in each quarter from December 2018 to March 2020. That was an increase on previous periods, but the figures must be treated with caution as they reflect only those who have paid some child maintenance in the past three months. Furthermore, every case under direct-pay arrangements is assumed to have paid the full amount; this prevents the DWP from providing an accurate reflection of just how high arrears have risen and by how much children are being deprived. The DWP’s own survey in 2016 found that only 49% of direct-pay cases had an effective arrangement after three months, so the arrears figure is likely to be much higher than the DWP’s figures show. Will the Minister agree to reconsider the CMS’s definition of compliance, to represent the reality of child maintenance payments?

As of September 2020, recorded arrears had accumulated to £379.2 million—9% of all maintenance that should have been paid. Arrears increased by more than £100 million between March 2019 and September 2020 alone. The UK Government need to get a stronger grip of this by focusing on not just current liabilities but clearing the increasing arrears.

I understand that many people’s incomes have been impacted by the lockdown. Many of those people are my constituents. A balance must be struck to protect children, which is why last year I called on the Work and Pensions Secretary to introduce a minimum maintenance payment where a parent with care is not receiving payments or where calculations have been reduced because a non-resident parent’s income has been cut. The UK Government must step in and provide minimum maintenance payments directly to ensure that each child is receiving a minimum amount. That was required last year, and because of covid-19, it is still required now. Will the Minister give his assessment of a minimum maintenance payment and commit to seriously investigate it?

Parents are so dissatisfied with the CMS that four parents, backed by Gingerbread, Mumsnet and the Good Law Project, are seeking a judicial review as part of the #FixTheCMS campaign. It is a poor reflection of this Government’s efforts and priorities that parents have had to resort to this course of action. For years, this Government have ignored warnings that the Child Maintenance Service is totally unfit for purpose.

The key way that the CMS can ensure proper payments and clear the arrears mountain is by using its enforcement powers. Since 2019, only three passports have been confiscated, and no driving licences have been suspended, despite persistent non-payment from tens of thousands of non-resident parents. Previous responses to my written questions have shown that the UK Government are not even recording how often maintenance debts are being referred to credit agencies. Will the Minister provide those figures and his evaluation of the use of the powers introduced in 2019? I hope the Minister will commit to renewed efforts on enforcement and explain how he plans to achieve that.

During the pandemic, children are experiencing greater hardship. The UK Government should be supporting them in whatever way they can, not pushing them further into poverty by taking 4% of maintenance received through the CMS system. Even victims of domestic violence who cannot come to a voluntary agreement are subject to this tax. From 2016 to 2019, the CMS taxed parents a total of £70 million, and in 2018-19 it taxed more than £33 million. There is no justification for that, and I hope the Minister will respond to the points I have made and commit to reviewing the 4% maintenance tax.

The current fee of £20 to open a child maintenance case is a punitive charge. Parents should make a voluntary arrangement where possible. However, if a parent with care is turning to the CMS, it means that the voluntary arrangements have failed. This is needlessly taking money from children. The CMS collected £1.5 million in application fees in 2017-18 alone. I hope the Minister will provide clarity on why the UK Government insist on continuing to collect this fee and commit to reviewing it. At the very least, I hope he will consider abolishing the fee for people in receipt of certain benefits, as the Government did for victims of domestic violence. The UK Government have options, and they must use them.

The CMS does not provide an accurate or fair reflection of non-resident parents’ income. Calculations are based on their apparent gross income. However, in many cases, some income is not even regarded as gross income and is not calculated. Parents must ask for a variation to include this, and it can only be asked for if a parent knows about it and if the income is at least £2,500. In 2017, the Government consultation proposed including unearned income in calculations, yet nothing has happened. In a written question in 2018, the Minister said that it required a change in primary legislation. Will the Minister confirm today that this amendment will be brought forward to ensure that calculations account for the total income of a non-resident parent? In addition, parents with care can no longer claim for a variation on the grounds of a lifestyle inconsistent with income—come on! These calls were backed by the Work and Pensions Committee in 2017 and by Gingerbread, so will the Minister agree to look into reintroducing those grounds for variation?

In a previous Parliament, my private Member’s Bill asked for the threshold for recalculation of maintenance to be lowered from 25%, so that calculations can be more accurate without adding to the CMS’s workload. Will the Minister agree today to conduct a review of the threshold, with a view to lowering it? The covid pandemic has exacerbated the problems, causing incalculable damage to children and young people because of the ineffectiveness of the CMS. It is more than time that the Government sorted this out, and I look forward to the Minister’s response.

[Madam Deputy Speaker (Dame Eleanor Laing)]

We will begin with a time limit for Back Benchers of four minutes, which might have to be reduced.

--- Later in debate ---

[Dr Kieran Mullan (Crewe and Nantwich) (Con) [V]]

I, too, begin by recognising the enormous challenges that have faced all parts of the DWP and, indeed, Government over the past 12 months. If ultimately more people in need got more help through redeployment, I can understand the difficulties that had to be faced. Like other MPs, I have been contacted by constituents who have experienced difficulties with reductions in payments. I welcome the commitment that calculations will be backdated. We must get back to normal service as soon as possible. I would like to make sure that the challenges and difficulties created by the pandemic do not mean that we forget the longer-term challenges, so, if I may, I will make some broader points.

We know that there are £350 million of arrears with the CMS, that £2.5 billion of Child Support Agency legacy debt is owed to children and that as much as £1.9 billion is due to be written off. Those figures alone tell us that we can and must do more. I do not know every single non-paying parent’s circumstances, but I am not willing to hold back on my criticism of parents who could pay but do not, for fear of upsetting those who cannot. Let me be clear that in my view not financially supporting your children when you could is completely and utterly reprehensible. If you do this, you are the lowest of the low, in my book.

I understand that various measures including imprisonment are available. We confiscate passports and deduct money from people’s wages, but the outstanding money shows that we need to go further. I want to pay tribute to the charity Gingerbread, which has worked and campaigned so hard on this issue. It says that in 2019 over 100,000 children went without payments while the Child Maintenance Service confiscated fewer than five passports and zero driving licences. I have heard from parents in my constituency who are not receiving the money their child is entitled to, and they have my full support. They want to see tougher action taken sooner, and so do I.

When it comes to arrears, I am afraid that we are much too quick to write off the debt. I seriously question the approach of writing debt off at all. That money is owed to a child, so what right does the state or even a parent have to say that they will forgive that debt? What kind of message does it send when we say, “You can be let off your obligations to a child”? In my view, we should never do that.

I want to finish by raising another area of consideration that I appreciate is full of potential unintended consequences and complexity. Why is it only up to one parent whether the other parent is pursued for the obligation in the first place? The state intruding uninvited into family arrangements should never be done lightly, but the financial circumstances of families with a parent wilfully failing to pay affects the finances of all families. It is not just a private matter. In effect, welfare and child benefit and the concept of parental responsibility and child maintenance operate entirely separately, but when it comes to poverty, hard-working families pay their taxes, making up the shortfall of the money not being provided by non-paying parents.

In the discussion on poverty and welfare, we hear again and again the scenario of the single parent struggling. Why are we told this about someone who is struggling? The implication is that they are struggling financially because they are a single parent raising their children on a single income. Quite rightly, taxpayers provide a safety net of support for children if that single income is not enough, but we should not forget that the first responsibility rests with the parent who is not contributing. As others have mentioned, research has found that in the UK, for the children of single parents who are in poverty and not receiving maintenance, maintenance payments being received would lift nearly 60% of them out of poverty. I wish the same amount of attention and publicity was given to the obligations of non-paying parents as is given to the obligations of taxpayers and the Government to step into their place.

I would like the Minister to give us his thoughts on how, when taxpayers are sharing the responsibility, our welfare system could reflect the implications of one parent choosing not to seek financial support from the other. I appreciate that we need to be mindful of domestic violence and other complexities in those scenarios, but we should not absolve an abusive parent of their obligations because they are an abusive parent. That would create a terrible perversion of the system. As far as I am concerned, not paying child support when you can is child neglect. If a parent who is looking after and caring for their child simply stops doing what we expect of them, we do not accept that. The state steps in, uninvited if necessary. That double standard is not right. I know that the Minister and the Department will rightly focus on the immediate challenges—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. The hon. Gentleman has exceeded his time and he really must conclude.