Report into the Child Maintenance Service by the House of Commons Work & Pensions Committee
On 2 May 2017 the House of Commons Work & Pensions Committee (who “examine the expenditure, administration and policy of the Office of the Department for Work & Pensions and its associated public bodies”) published their report into the Child Maintenance Service (CMS), which was introduced in 2012 to deal with child maintenance which was at that time dealt with by the Child Support Agency (CSA). Following its introduction, many of the CSA cases have now been closed and the remainder are expected to be closed by 2018.
After the closing of the CSA arrangements, the options are to make a direct arrangement with the other parent without the involvement of the CMS at all (a family based arrangement), pay through the CMS (Collect and Pay) or alternatively, contact the CMS for a calculation of the liability for child maintenance and thereafter pay directly (Direct Pay).
The Government was very much looking to encourage parents to deal with matters directly and one such way of doing that was to introduce charges for the use of their services.
The charges that are levied by the CMS (which applied as from 11 August 2014) are as follows:
- a charge of £20 to obtain the initial calculation of child maintenance;
- a charge of 4% deducted from the child maintenance received by the receiving parent if child maintenance is paid through the CMS (Collect and Pay); and
- a charge of an additional 20% to the child maintenance paid by the paying parent if child maintenance is paid through the CMS (Collect and Pay).
Alternatively, parents can pay directly (Direct Pay) if using the CMS (after the initial calculation has been carried out) and the fees of 4% for the receiving parent and the 20% fees for the paying parent referred to above will not apply.
Returning to the recent report, the Committee said that they focussed their enquiry on three main areas. Specifically, the moving of cases from the CSA scheme to the CMS scheme, the use of family based arrangements and individuals’ access to the CMS scheme and how the CMS dealt with enforcement.
The Committee’s recommendations were as follows:
- if a particular case has a history where the paying parent routinely underpays, the case should be transferred automatically from the CSA to the CMS Collect and Pay scheme and in these cases the Committee believe it is difficult to justify charging an application fee of £20 to the receiving parent “especially as such cases appear a low priority for enforcement”;
- applicants who apply to the CMS who are on means-tested benefits should be exempt from paying the charge of £20 to obtain the initial calculation/full initial application to the service;
- consideration should be given to, and a review should be made, as to whether the charges for both parents (on the Collect and Pay scheme) are meeting the scheme’s objective of encouraging more parents to pay directly between them;
- training should be given to staff at the CMS to help deal with domestic abuse cases, with relevant users of the scheme (the receiving parent) being committed to transfer to the CMS Collect and Pay scheme with the charges being waived for them;
- assistance should be provided to help families who may be “slipping through the net” – those cases where the CSA case has been closed and a CMS case has not been opened but there is the absence of an effective family based arrangement too;
- cases where are arrears of child maintenance need to be considered. The Department should set out the prioritisation criteria, as well as how it will deal with the relevant cases. They should also let receiving parents know if their case is an arrears case only and it is not going to be pursued;
- the Committee found that the CMS is “tentative in deploying its extensive enforcement powers” and believe that “a stronger approach to enforcement” should be taken and “recommend it adopt a presumption in favour of enforcement action where a payment has been missed, and proceed unless there is either evidence of a valid reason why or a credible reparative payment plan is in place;
- the rules changed previously so that they no longer allow child maintenance awards to be challenged on the basis of the paying parent’s assets and lifestyle being inconsistent with their stated income. The Committee believe that that provision should be reinstated. Linked to this, they believe that if such an application is made the higher payments should apply until the variation is dismissed; and
- A HMRC investigation team should work with the CMS, with the Committee believing that “child maintenance cheats are very often tax cheats too”.
Only time will now tell whether the recommendations will be followed or not.