Child Maintenance

Debate between Valerie Vaz and Marion Fellows

1st reading: House of Commons
Tuesday 6th November 2018 Commons Chamber

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

I beg to move,

That leave be given to bring in a Bill to remove certain fees for child maintenance services; to make provision about the calculation of child maintenance payments; and for connected purposes.

I thank the co-sponsors of the Bill for their support. I also thank a number of Members who have introduced their own private Members’ Bills to reform and improve the Child Maintenance Service, including the hon. Member for South Cambridgeshire (Heidi Allen), who is to be commended on the work that she is doing to improve the CMS system.

I have been approached by numerous constituents asking for help with their CMS cases, as many other Members will have been. I have been approached both by parents with care and by non-resident parents. It is clear that the CMS does not function properly in its current form. In other words, it is letting down the children who should be at the heart of what it does. We have a duty to provide a system that respects the rights and obligations of both parents, but, ultimately, the rights and interests of children are paramount, and, sadly, I do not believe that the CMS meets that fundamental goal.

There are four specific ways in which the CMS could be improved in order to fulfil its intended purpose, and the aim of my Bill is to enact them. The 4% maintenance levy on parents requiring the collect-and-pay service should be abolished, as should the £20 application fee. There should be a reduction from 25% to 10% in the change-in-income threshold that must be breached for maintenance payments to be recalculated. Finally, the value of any equity in the non-resident parent’s primary residence should be included in maintenance calculations when it exceeds £500,000.

The Child Maintenance Service is there to help when parents cannot agree on child maintenance. It is supposed to be a public service that ensures that parents meet their responsibilities to their children, especially when they may not want to. I do not think anyone here thinks that a parent should not pay for their child, but believe me, there are parents out there who do not believe that they should—parents who attempt to duck and dive their way out of paying a single penny towards their child, because they perceive every payment as a payment towards their ex-partner.

Whatever reason a non-resident parent has for not paying, they should not be allowed to renege on their responsibilities, but most of all, their child should not pay the price. Currently, if a non-resident parent fails to make full and timely maintenance payments that the CMS has calculated on their behalf, the case will move to collect and pay. The CMS will then chase down the non-paying non-resident parent and collect maintenance on the receiving parent’s behalf. Parents with care—and therefore their children—then incur a maintenance tax of 4% on all payments collected. They are penalised for requiring the help of the CMS. They are charged because their ex-partner refuses to support their child. They are taxed through no fault of their own.

Using figures from the Department for Work and Pensions, the Library has estimated that in 2015-16 and 2016-17, £3.3 million was taken from families through the 4% maintenance tax. As a punishment, the non-paying non-resident parent will incur an additional 20% penalty and, potentially, other fines based on action such as a deduction from earnings order. How can it be justified that a child loses out because one of their parents will not meet the obligation to provide for them? The maintenance levy is not a tax on parents; it is a tax on children. It takes food from their table, clothes from their back, and money from their pockets that would allow them to enjoy the upbringing that every child should have.

The UK Government said in answer to a written question that the maintenance levy exists to encourage

“parents to make Direct Pay work where they can.”

The point of collect and pay is that all attempts have failed; parents have no choice but to turn to the CMS to collect the maintenance that their child is owed. It often feels as though the CMS is more intent on collecting payments to maintain itself than on maintaining the children whom it is supposed to serve. In the grand scheme of things, the collection of 4% charges is a pittance to the UK Government, but it could make a massive difference to children’s lives.

Likewise, the £20 application fee takes more money from families. It is most likely to be a parent with care who starts an application with the CMS because they have not been able to reach an agreement with their ex-partner. Again, they are being penalised for needing help in securing for their children the support they have a right to.

The Library estimates that in the past three years alone, the CMS has collected £4.8 million in application fees. That is money that could be spent on heating and eating, materials or clothes for school, or sports activities. Sadly, these are simple but common things that many families today struggle to afford. Single parent families are more likely to be in poverty than couples. A £20 application fee is another barrier that blocks low-income families from accessing vital support, and it can deter them from applying. The CMS should be free at the point of use to meet a need. It should not use parents and children as clients, and as a source of income.

I do not want to paint all non-resident parents as negligent—most want to do well by their child—but the CMS is unfair not only to parents with care, but to non-resident parents. A paying parent can amend their income, and therefore their calculations, only if their income changes by more than 25%. That is a huge threshold to meet. It can disproportionately affect parents on low incomes if their income decreases, while disproportionately benefiting those on higher incomes.

A constituent of mine had a low income that decreased by 24.9% exactly; he was struggling to make ends meet, as the maintenance that he has to pay is still based on the higher income he previously earned. For many parents, this could be an income that they earned up to six years ago. My constituent still wanted to support his child, but at a rate he could afford. Likewise, parents with care have approached me for help as they know that their ex-partner earns far more than they did when they disclosed their earnings to the CMS, but because their change in income did not exceed the 25% threshold, those parents with care were left receiving a lower rate.

Ultimately, a lower threshold of 10% would ensure that maintenance payments more accurately reflected what a parent earned; maintenance calculations would therefore be more accurate, which would benefit parents and children. That would still be in keeping with the Government’s aim of ensuring both minimal administration and financial stability for the parent with care.

I welcome many of the steps that the UK Government are only beginning to take to ensure that parents pay their maintenance on time and in full. What was needed was not necessarily more powers, but rather a greater willingness for the CMS to use the powers it had. It is also important, however, that maintenance calculations be a true reflection of parents’ incomes. The private Member’s Bill tabled by the hon. Member for South Cambridgeshire goes to great lengths to ensure that a person’s real worth is used in calculating their maintenance. The Government are introducing regulations that will take assets such as gold bullion into account, but we need to go further and take into account a person’s primary residence where there is equity in it of £500,000 or more. I do not know many people who have gold bullion lying about, but I do know people who own their home and have no mortgage or loan on it.

Homes are a major way in which a non-resident parent can increase their net worth, if their home increases in value. A £500,000 threshold will ensure that those who live in smaller homes do not face unreasonable additions to maintenance that may require them to sell their home. Only those who live in more expensive homes who can afford to pay will pay. The Conservative Government make a big deal about personal responsibility and families being self-reliant; now is their opportunity to show that they mean it with action, and to ensure that parents meet their responsibilities to their children.

The CMS is a public service, and it seems strange that parents are deterred from, and even charged for, accessing it when the cost to the public purse is so small and the benefits to children so large. With every pound collected under collect and pay, the UK Government are taking money that is rightfully the child’s. There has been recent progress on improving the CMS. I believe that the steps in my Bill will make a discernible difference to people’s lives—the life of the paying parent, the receiving parent and, ultimately, the child—and ensure that children have their rights respected and get the start in life that their parents owe them.

Question put and agreed to.

Ordered,

That Marion Fellows, Neil Gray, Angela Crawley, Mhairi Black, Antoinette Sandbach, Liz Saville Roberts, Jim Shannon, Caroline Lucas, Alison Thewliss, Carol Monaghan, Sarah Champion and Carolyn Harris present the Bill.

Marion Fellows accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 23 November, and to be printed (Bill 284).

[Valerie Vaz (Walsall South) (Lab)]

On a point of order, Mr Speaker. My hon. Friend the Member for Battersea (Marsha De Cordova), who unfortunately cannot be here today, is a member of the shadow Work and Pensions team and she has been urgently seeking an accessible copy of the managed migration regulations that the Secretary of State for Working Pensions announced yesterday. After numerous calls to the Department, my hon. Friend has finally been promised a copy on Friday. Mr Speaker, I am sure you would agree that that is unacceptable, and that a copy should have been made available in an accessible format immediately, from the moment of publication. It is vital that we should be representative of society as a whole, which means that such important Government publications should be provided in an accessible form on publication, rather than taking the best part of a working week to be provided. Can you advise me on how we can ensure that this document is made available immediately?