Child Maintenance Service: Reform

Marion Fellows Excerpts

Thursday 19th May 2022 Westminster Hall

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

I beg to move,

That this House has considered reforms to the Child Maintenance Service.

It is a pleasure to serve under your chairmanship, Ms Rees, and I thank the Chairman of Ways and Means for allowing me to secure today’s debate on child maintenance reform. I honestly did not know how to start this debate. I have been campaigning on this issue for seven years, and in a debate in July 2019 I asked for sweeping reforms of the Child Maintenance Service, which is a cry I repeat today. At the risk of repetition, deviation and very little hesitation, here I go again—that is the only funny in my speech.

I thank One Parent Families Scotland, Gingerbread and Mumsnet for their helpful briefings, and I thank One Parent Families Scotland and Gingerbread for the work they do to support families with child maintenance issues. I reaffirm that my interest and campaigning on this issue is based on the needs of the children involved, on the Child Maintenance Service being able to work effectively to support them, and on ensuring that those children receive the maintenance they are due.

It can be difficult for folk in a stable relationship to understand the difficulties faced by parents with care when trying to receive child maintenance from previous partners who renege on their responsibilities. There are millions of relationships that have fallen apart, but at no point should a relationship breakdown mean that parents do not have a responsibility for their children. It is a fact of life, however, that some parents just walk away and try to shrug off those responsibilities. At that point, I believe that the responsibility should fall on us all to support those children and make their lives better, yet in these rich nations children fall into poverty, and the Department for Work and Pensions fails them with a system that does not help them, writes of huge debts to them, and does not adequately enforce payment.

Child poverty in the UK is a national disgrace and a reflection on the Government’s attitude to welfare. This is a Government who think it is fair to impose a benefit cap on families, for example, but children do not ask to be part of one-parent families where the paying parent is not facing up to their responsibilities. The Government and the DWP should not be failing them too.

Single parents with children are more likely to be in poverty, so any reduction in income is likely to be particularly harmful. In the face of the Tory-made cost of living crisis, maintenance matters even more in protecting children from poverty. That 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, and to prevent hardship and ensure a dignified standard of living.

Child maintenance arrears have also been exacerbated by shortfalls in making payments to parents who lost income during the pandemic and the current cost of living crisis. A Joseph Rowntree Foundation report in January this year showed that nearly half the children in lone-parent families live in poverty, compared with one in four children in couple families.

The workings of the CMS have been criticised by colleagues from all parties, either here in Westminster Hall or in the Chamber, and all Members will, at some time, be asked to help constituents with issues relating to the CMS. When the National Audit Office recently spoke to parents involved with the service as part of its report, they confirmed what many parents tell third sector organisations and their MPs: the system does not work for them or their children. In advance of this debate, I forwarded a list of asks to the Minister in order that I may have a fuller response today, and I really hope that will work.

The DWP is meeting its objectives in reducing reliance on state-administered maintenance, but Gingerbread is deeply concerned about the laissez-faire approach to understanding why so many families have no maintenance arrangements in place. One Parent Families Scotland states:

“A functioning CMS needs to offer bespoke advice and support to parents to reflect individual circumstances. It needs to give confidential help to those with more challenging living arrangements, such as domestic abuse, to safeguard the vulnerable. For instance, it should remove face-to-face meetings with ex-partners who have carried our domestic abuse to avoid power imbalances and coercive control. The CMS needs to advocate better on behalf of single parents to ensure that their voices are heard. However, the feedback from parents suggests that these objectives are not at present being met.”

A Mumsnet survey states that just 11% of parents described their experience of using the CMS as positive, with 73% describing it as negative, and 72% saying that using it has made their mental health and wellbeing worse. Paying and receiving parents told the NAO investigation that the CMS was not working properly for them.

The recent NAO report explores the failures of the CMS, showing that it is simply not working for far too many single parents. The report found that the UK Government have not learned one of the key lessons from the now-defunct Child Support Agency, and that in preventing arrears build-up, enforcement can be too slow to be effective. The report suggests that unless the UK Government write off more CMS debt, outstanding arrears will grow indefinitely. Indeed, they are forecast to reach £1 billion by March 2031 at current rates.

The DWP does not yet fully understand why those without an effective arrangement do not use its service, and it could do more to help prevent around half of direct-pay arrangements from failing, leaving maintenance unpaid. The DWP still has significant problems with its customer service, which undermines trust in the CMS. According to the latest DWP figures, in the quarter ending December 2021, out of over 158,400 paying parents due to pay via the collect and pay service, 32% paid no maintenance, 68% paid some maintenance, of which 23% paid up to 90% of the maintenance due for the quarter, and 45% paid over 90%. I do not like to use statistics in debates like this, but it is absolutely incredible that 32% of parents paid no maintenance.

The percentage of parents paying something toward their child’s maintenance has fallen by four percentage points to 68% since the last quarter. The last time a compliance rate of 68% was observed was in March 2020. There has been an eight percentage point decrease in the percentage of parents paying over 90% of the maintenance due for the quarter since the quarter ending March 2021, falling steadily from 53% to 45%.

All concerned organisations representing parents and children involved with CMS are calling for the abolition of the £20 application fee and a 4% deduction from collect and pay arrangements, as those are a barrier to the poorest parents becoming involved with CMS in the first place. It might be hard for some of us to imagine the difference that £20 or 4% of a maintenance arrangement would make, but to some people that is a huge amount of money.

I am calling on the Minister and the Government to reduce the income charge threshold—currently 25%—to ensure that low-income non-resident parents are not disproportionately charged, and that higher-income non-resident parents pay their fair share. That is important when people change or lose jobs, as it affects the ability of some parents to pay the amount of maintenance due.

The withholding or restricting of child maintenance payments can be used as a tool for economic abuse. According to DWP data, in the quarter ending in December 2021, 60% of new applicants to the CMS were recognised as being survivors of domestic abuse, which is why the way they are treated is so important. When will DWP introduce a trauma-informed service delivery and appropriate training for staff to identify ongoing financial abuses, given the increasing number of CMS customers who have experienced domestic abuse? When will the service introduce better customer service and management for parents, such as having the same caseworker for individual cases? Having to phone up repeatedly, and getting someone different every time, is almost an abuse in itself.

The Government announced in March that they have plans for future changes to the CMS, such as including unearned income in child maintenance calculations, for which I have been calling for quite a while. The caveat, however, is that the Government have said they will do so

“when the legislation timetable allows”.

How long is that long grass? Why is this not a priority now? There is a cost of living crisis going on, and think of the difference it would make to children.

DWP figures also show that since 2021, when the CMS began, £451.1 million in unpaid maintenance has accumulated. That amounts to 8% of all maintenance due to be paid since the start of the service. The SNP has repeatedly called for effective enforcement action to be taken in the collection of maintenance arrears. Much stronger systems and resources need to be dedicated to tackling parents who attempt to avoid or minimise child support payments, and those who do not pay what has been agreed. Many parents game the system—they know that if they do not pay and are then called to account, they can pay a little and slip off the immediate register, and the children suffer even more.

The CMS simply is not working for some parents, and closer attention has to be paid to what parents are saying. One parent said:

“I tried to claim child maintenance and received a few erratic payments. It had to be collected through earnings arrestment. Every time the dad moved job, payments stopped and wouldn’t restart for months. CMS said they couldn’t find him and they were not allowed to search for him…I was told I should write him a letter that would be passed onto him. I didn’t/couldn’t…so I didn’t make a new claim.”

Another said:

“I would improve the customer service; those working with communicating with parents using the service can be so insensitive when discussing personal situation and lacking in knowledge about the services provided.”

Another parent said:

“I’ve had to wait for more than a year for a response on more than one occasion (despite chasing) which is completely unacceptable. Upon phoning, any random person becomes your case worker and as my case is complex this is soul destroying. I’ve had complaints closed down without my agreement. Calculations performed incorrectly. The actual running total has had technical issues twice, so I don’t know how much is owed etc and it’s taken months to sort out. If you don’t chase nothing is actioned. The portal can be like a black hole.”

Another said:

“Although I am on Collect and Pay the paying ‘parent’ is still getting away with non-payment and nothing is being done about payment of the arrears. Then they have the audacity to charge me 4% even though none of this is the child’s fault and it’s the child who is being deprived of what she is owed.”

When will the CMS stop writing off arrears, some still from the Child Support Agency? That money is due and should not be written off as children reach adulthood.

The hon. Member for Crewe and Nantwich (Dr Mullan) secured an Adjournment debate on Tuesday on the specific issue of maintenance arrears, which he was correct to raise. He suggested home curfew as a consequence of not paying child maintenance. Although that sounds like a positive thing, it has unintended consequences in cases of domestic abuse and control, so I would urge caution on that. However, at present the DWP does have sanctions, such as confiscation of passports and driving licences. DWP figures show that from the quarter ending December 2019, four passports have been subject to either suspended or immediate confiscation orders, 10 driving licences have been disqualified either immediately or under a suspended order, and 362 prison sentences, suspended or immediate, have been passed. Do any of us really believe that is good enough?

I will not go over the list of asks because I have done that so often. I know the Minister will respond, but I want to reflect on what the organisations that deal daily with parents in the CMS system have said. The chief executive of One Parent Families Scotland, Satwat Rehman, said:

“Parents are facing huge delays in hearing back, poor customer service, and ultimately a failure to collect the payments. At a time when the cost of living is rising to impossible levels, with many families forced to choose between food and fuel, addressing these issues is more important than ever. No child should have to go without because one parent is choosing not to provide them with financial support when they are able to.”

The chief executive at Gingerbread, Victoria Benson, said:

“Child maintenance is not a 'nice to have' luxury, in many cases it makes the difference between a family keeping their heads above water or plunging into poverty.”

She also said:

“It’s clear that urgent changes need to be made to ensure the child maintenance system is fit for purpose and works for those who need to use it. Without reform more single parent families will experience poverty and more children will be exposed to ongoing disadvantage. Single parents and their children should be supported to thrive because of their family make up—not in spite of it.”

Mumsnet founder, Justine Roberts, said:

“Providing for your children is a fundamental responsibility, and it’s genuinely surprising that the Child Maintenance Service allows so many adults to evade it. Children from these families deserve better than to be treated as collateral damage when relationships break down.”

In this debate, I have tried to raise some of the issues expressed by those who use the service, because it is important that their voices are heard. The Child Maintenance Service has not been working effectively for years. I know there are huge numbers of parents who use direct pay, who are involved in collect and pay services, and who pay on time, but I am not here to press their case. I am here to make the case for children affected by parents who do not face up to their responsibilities—indeed, I think all hon. Members are here for that reason. Let us try to make the CMS work for the children who need it.

--- Later in debate ---

[David Rutley]

I give way to the hon. Member for Motherwell and Wishaw.

[Marion Fellows]

I have never said this in public, but my late husband was a Rangers fan, man and boy, and I could feel his presence when I watched the match last night. It was such a sad ending.

--- Later in debate ---

[David Rutley]

I agree. Other hon. Members may not quite agree with everything that the hon. Gentleman just said, but I think we can all agree that it was a remarkable achievement.

We can all also agree that this debate is important. Even though my current ministerial brief does not cover this area, it is vitally important. The Child Maintenance Service plays a valuable role in ensuring that children are supported in instances where parents do not live together and where they come to a private arrangement. We know that the vast majority of separated parents quite rightly take their responsibilities extremely seriously, as the hon. Member for Strangford pointed out. Our aim is to help parents to support their children and we are sensitive to the needs of both parties. The CMS is designed to promote collaboration between parents, and it offers a statutory scheme where collaboration is not possible.

The central focus in all of this is that the children are supported. The intent of child maintenance reform is to encourage parents to meet their responsibilities and provide their children with the financial support they need to get a good start in life, and that intent is well supported by the evidence. I will come on to that point in a second.

We are committed to maximising the positive impact of the Child Maintenance Service and ensuring that good arrangements are put in place for children, no matter where they are growing up. As the hon. Member for Strangford pointed out, parents need to honour their responsibilities to their children. We believe the CMS has made substantial improvements in the pre-covid period, notwithstanding that there is further room for progress, and the statistics support that. The compliance rate for parents on the collect and pay service has increased significantly, with the percentage of parents paying something rising by eight percentage points between the quarter ending March 2018 and March 2020. From March 2016 to December 2021, the percentage of CMS cases where no maintenance is being paid fell by about 30%, from 46% in March 2016 to 32% in December 2021.

CMS investigators have the power to deduct directly from earnings and to seize funds owed in child maintenance payments where requests for payments are consistently refused. For example, the CMS has the ability to seize funds held by a third party that they owe to the paying parent. Over 800,000 children are now covered by the Child Maintenance Service arrangements, up from 700,000 in mid-2019. We are making a difference to the support that children have been receiving: since 2019, over £1 billion in child maintenance has been arranged each year through the direct pay service and the collect and pay service. The hon. Member for Wirral South (Alison McGovern) made an important point about poverty. She and I have regular debates on this subject, but it is important to note that around 140,000 fewer children are growing up in poverty as a result of child maintenance payments. That is good progress, but clearly more work needs to be done.

The hon. Member for Motherwell and Wishaw rightly raised points about the fee for an application to the Child Maintenance Service, which is set at £20 for all CMS participants. That fee is intended to encourage parents to consider whether they really need a statutory scheme case, but it is not so high that it creates an insurmountable obstacle. Applicants who are victims of domestic abuse or under the age of 19 are exempt from paying the application fee. It is not our intent to create a barrier for vulnerable customers; in fact, around 60% of applicants do not pay that fee. Collection charges, which are 20% for the paying parent and 4% for the parent with care, only apply to the collect and pay service, and are intended to provide both parents with an incentive to collaborate. The collection charge for the receiving parent is deducted only when maintenance is paid, so the receiving parent does not owe money to the Child Maintenance Service if maintenance is not paid. If there were no charge for receiving parents, there would be no incentive for them to use the direct pay service.

The Child Maintenance Service may also review the income of a paying parent if earnings decrease or increase by 25% over a year—a point that was raised by the hon. Member for Motherwell and Wishaw. That 25% threshold ensures that liabilities remain stable so that both parents can budget with certainty, which aims to provide ongoing certainty for the child as well.

[Marion Fellows]

Will the Minister give way?

[David Rutley]

I will, but can I just make one further point, which I think might answer the hon. Lady’s question? Most people’s income does not change to that degree over the course of one year. The threshold also ensures that minor changes in income do not interfere with the efficiency of the system, thereby increasing costs for the taxpayer. I recognise that there is an important issue here, and I assure hon. Members that DWP Ministers will keep that tolerance under very active review.

[Marion Fellows]

I just wanted to thank the Minister for that, because it is a very important point. I know those changes are not frequent, but they can prevent money from going to children, which is the issue that this debate is all about.

[David Rutley]

I underline for the record that that issue is kept under active review.

Within the CMS, arrears are written off in exceptional circumstances only. With regard to CSA arrears, the Department carried out its compliance and arrears strategic review. Over the course of that review, 250,000 receiving parents were written to, explaining the situation. There are fewer than 60,000 cases remaining with CSA debt, and more than 35,000 of those are undergoing collection and enforcement activity. In instances where the receiving parents ask, the CMS undertakes further action to seek to recover the funds. Crucially, this exercise has allowed the CMS to focus its effort on parents who told us they wanted us to try to collect the money that they are owed and the money that will benefit children now.

We are determined to go further and not content to stand still. We are always looking to improve the way we deliver this vital service. The Department continues to keep child maintenance policy and our operational delivery under review. Those who have met Baroness Stedman-Scott will know that she is also a redoubtable champion on these matters and not somebody to be messed with. She is very keen to drive further action forward.

We are also considering how other countries arrange child maintenance. We are gathering examples of good practice and looking at what can be learned from other systems. This includes researching what interventions are used to encourage parents to make their own maintenance arrangements without Government involvement. The CMS has introduced new digital services such as the apply online service that allows parents to make an initial application more easily. That option is available 24/7 and allows greater flexibility for separated parents to use the CMS and manage their child maintenance arrangements in a way that suits them.

That brings me to the standard of service that customers receive when they go to the CMS—a point raised by numerous colleagues today. The CMS is committed to delivering service to the highest standard and has created a more customer-focused culture over the years. In the past, the CMS has experimented with personal caseworkers —a point raised by the hon. Member for Strangford—but it was found that that does not offer the best service. Instead, the CMS organises caseworkers into more tightly formed teams, which allows for knowledge and expertise sharing, so any caseworker can deal with any of their team’s cases. We find that that is the best way forward, but I will gladly pick that point up separately with the hon. Gentleman later.

The hon. Members for Motherwell and Wishaw and for Rutherglen and Hamilton West (Margaret Ferrier) raised the incredibly important issue of domestic abuse survivors. The CMS takes domestic abuse very seriously and has substantially strengthened its procedures to ensure customers can use the CMS safely. The CMS updated its domestic abuse training programme to give clear guidance to caseworkers on how to support victims of domestic abuse. The Department also commissioned an independent review of ways in which the CMS supports survivors of domestic abuse, including those facing and suffering from financial abuse.

The review was conducted by Dr Samantha Callan, who consulted a range of domestic abuse stakeholders and leading charities, as well as CMS customers who have, sadly, experienced domestic abuse. The Government will, of course, carefully consider the findings of the review and any recommendations.

Moving on to the issue of unearned income, we are also looking to take new measures to ensure that income gained from sources other than earnings is distributed fairly. The CMS compliance and arrears strategy 2018 introduced powers that allowed notional income from assets such as coins and gold, income derived from capital, and any foreign income to be used in the assessment, but we want to go further. We propose making changes in legislation that enable the child maintenance calculation to include unearned income that is not currently captured—for example, savings and investment income, and dividends.

--- Later in debate ---

[Marion Fellows]

I thank all hon. Members who have taken part in the debate. I know that this is not a particularly popular time, so I really appreciate them being here. I thank the Minister for his response, although I will be investigating it further. I did not want to say this, but I think I have to. The noble Baroness plays an important role—I have had meetings with her and she is redoubtable—and also speaks well of her Department and tries to move things forward, but it is a pity that she is in the other place and is therefore unable to be directly scrutinised in the Chamber of the House of Commons. That often makes it difficult for Ministers to respond directly to folk like me and other Members present. I am well aware that there was a push on enforcement last year, but I will be writing to the Baroness directly to ask whether that push is going to be continued. I still do not think I have had an answer to, “How long is the long grass?” regarding when legislation will appear. [Interruption.] The Minister is indicating “quite short”, but I think everyone involved would like some more surety about that.

I thank you, Ms Rees, for presiding over today’s debate so well, and I thank all the organisations that have helped us to have it. We are all concerned, and the Minister can take it that we will remain so and will keep a very careful watch on folk in the DWP. The staff in the Child Maintenance Service work hard and do their best. They do not need to be reformed; what needs to be reformed is the systems, and the way in which they are enforced.

Resolved,

That this House has considered reforms to the Child Maintenance Service.