Child Maintenance Service

Lord Farmer Excerpts

Thursday 24th June 2021 Grand Committee

Asked by

[Lord Farmer]

To ask Her Majesty’s Government what plans they have to reform the Child Maintenance Service.

[Lord Farmer (Con)]

My Lords, in the few days since I secured this debate, I have been contacted by a large number of organisations and individuals expressing strong views based on very difficult experiences as either paying or receiving parents in the child maintenance system. The parliamentary digital engagement team did sterling work to publicise this debate and elicit testimony from the public to inform it. I am very grateful to every one of the 1,524 people who took the time to respond and I hope to do some justice to their stories in my remarks.

That the number using the Child Maintenance Service across Great Britain is high is unsurprising, given that an estimated third of all children grow up in separated families. In December 2020, the Department for Work and Pensions reported that 756,500 children—roughly equivalent to the whole populations of Bristol and Newcastle cities combined—were covered by CMS arrangements. This fairly small cohort of speakers today does not represent the importance of child maintenance reform to those directly involved, their extended families and wider society. At least we will have longer to unpack properly our concerns in this highly contested area of policy. To quote Professor Patrick Parkinson, a key architect of the Australian child support reforms, it

“involves making compromises between the conflicting interests of mothers, fathers, children and the state … A win for one interest group … is a loss for another. Child support policy is a complex and contentious area involving zero sum calculations in political terms.”

No pressure then, Minister.

The contention is wholly understandable: the process of separation, however amicably achieved, is usually emotionally and financially stressful. A once-intimate relationship undergoes significant change, sometimes at the behest of one partner and strenuously resisted by the other. The indissolubility of parenthood and the important shift away from clean break divorce mean that both parents will still need to co-operate, at the very least around money and contact.

History has taught us there are no silver bullets and a whole host of potential unintended consequences when it comes to reforming child maintenance. Nearly 40 years ago, the seminal Finer report proposed a dedicated agency for administering maintenance payments. The ground lay fallow until 1993, when the Child Support Agency first opened its doors following the Child Support Act 1991. Just two years later, more legislation was required to fix its considerable problems, setting the tone for the sporadic reforms that produced the current system, in place since 2012.

We appear overdue for another wave of change, especially as universal credit is now a much more mature welfare system. The interaction of benefits with child support payments is a particularly salient issue. A reformed child maintenance system must do even more to ensure that paying and receiving parents, and the children both are raising, albeit not under the same roof, are not living in financial poverty as a result of its operation.

Looking briefly at how the current system works, many separated parents agree and adhere to private family-based arrangements. The Child Maintenance Service, which replaced the Child Support Agency, is for parents who have been unable to do this. Around two-thirds of children are covered through direct-pay arrangements, where the CMS calculates maintenance liabilities and parents arrange payments between themselves. A third are covered through collect-and-pay arrangements, where the CMS collects and manages payment between parents. Paying and receiving parents experience this system very differently, as evidenced in responses to the parliamentary survey. Almost half were from paying fathers and almost all the receiving parents, 40% of respondents, were mothers.

Emerging themes from this exercise map on to those in the academic literature and other cases I was sent. First, paying parents highlighted how the nature of CMS calculations could lead to financial hardship, which was unalleviable by working longer hours, as any additional money would be directed towards child maintenance. The Social Security Advisory Committee recently asked the DWP to examine ways of improving the child maintenance formula and its link with earning thresholds to address such concerns. My first question to the Minister is this: has there been any progress on this issue, given the DWP’s commitment to inform future policy development with the views expressed in SSAC’s consultation?

Secondly, as the receiving parent obtains less money if children stay overnight, this can disincentivise sharing care. Thirdly, and correlating with these previous two themes, paying parents reported impacts on their mental health, suicide attempts and suicidal thoughts. Fourthly, many reported issues with customer service, errors in calculations and inconsistencies, as did many receiving parents.

Three other areas stood out among receiving parents’ responses. First, they were dissatisfied with the effectiveness of action taken to collect payments. Secondly, they felt inadequately safeguarded in situations involving domestic abuse; for example, the continuation of control by withholding payment. Finally, self-employment and zero-hours contracts were deemed to create loopholes, so paying parents could hide income. I hope other noble Lords will go into more detail on this wide range of issues, which I have been able only to touch on, and suggest solutions to the Minister.

Paying and receiving parents diverge in what they perceive to be acceptable ways of resolving systemic difficulties. For example, internationally, many child support systems now rely on both parents’ income when determining liabilities, where most women work. In the parliamentary survey, 93% of paying parents said both parents’ incomes should be included, compared to 18% of receiving parents. Admittedly, counting mothers’ income can reduce incentives for workforce participation, but changes in Australia actually increased incentives for more qualified mothers, such as nurses and teachers, to return to work or increase hours. Their reforms, which have helped diminish the extent to which child support is a source of mass grievance, required designing a markedly complex formula, which had to be fair across a broad cross-section of circumstances. This took an expert committee eight months and significant research. A similarly intense process would be required here.

The other health warning is that, as child support systems interact with a country’s welfare system, translating ideas from one jurisdiction to another is always problematic. However, can my noble friend say whether the Government have any plans to consult on the merits of aligning Great Britain to other child support systems by including both parents’ incomes?

Finally, one theme that did not emerge in the survey but was raised by the Social Security Advisory Committee in 2019 was whether separated parents are getting the support that they need through a challenging and stressful time in their lives. The committee pointed to the need for an overarching, joined-up government strategy for separated parents, covering all relevant departments and child maintenance. Necessary, but not sufficient, is the commendable cross-departmental work to reduce parental conflict.

I declare my interest as a director of the Family Hubs Network and say that access points to services offering far more holistic support could be provided in the family hubs that the Government have promised to champion. Such access was instrumental to the progress made in Australia: family relationship centres, integral to its 2006 family law reforms, provide a gateway to the many different kinds of advice and support that parents need. The germ of such an idea was in our own landmark Children Act 1989, which specified that local authorities should provide family centres, where families could get help to overcome difficulties, including when parents separate. Can my noble friend the Minister inform the House how different departments of government are working together, including to deliver family hubs?

In conclusion, child maintenance will always be a system under scrutiny or being “reformed”, but state action must also be accompanied by a cultural shift in attitudes towards parental responsibility. We need to get to a place where there is a strong and pervasive expectation that, first, both parents will always share the cost of raising children, and, secondly, with the holistic support that I have described, they will sort out the thorny post-separation issues that stem the flow of child maintenance.