The reality of the effect of child maintenance charging

Children|December 19th 2016

As part of its continuing drive to demonstrate to the world how wonderful its child maintenance policy is, the Government, via the Department for Work and Pensions (DWP), published a slew of research documents on Friday in connection with a review of the impact of charging by the Child Maintenance Service (CMS).

For the benefit of those who don’t know, charging parents for the privilege of accessing the child support/maintenance system is a central part of the Government’s policy to sort out the appalling problems that have bedevilled the system since its inception a quarter of a century ago (can it really be that long?). Basically, the system has never been able to cope with the strain of dealing with the vast majority of contested child maintenance cases in this country, with the result that, quite literally, billions of pounds of child support has never been collected, leaving millions of parents looking after children worse off, and those children suffering accordingly.

Clearly, the child support system was an embarrassment for the Government, so it embarked upon a policy of reform. The big idea behind the policy was simple: pass the buck. Instead of having the state sort out child maintenance arrangements for parents, why not get the parents to do it themselves? And if the parents couldn’t sort it out, the CMS would charge them for doing it for them.

The charges, the first of which were introduced on 30 June 2014, come in three flavours: a £20 application fee for using the service in the first place, enforcement charges for non-payment and, since 11 August 2014, collection charges for using the ‘Collect and Pay’ service, for those who need to have the CMS collect the maintenance for them, because the non-resident parent is a bad payer.

Ostensibly, the purpose of charging is to recoup the cost, or at least some of the cost, of the system, in these times of economic restraint. In reality, the primary purpose of charging is, of course, to discourage parents from using the system. In other words, it is part of that big idea: get the parents to sort out child maintenance arrangements themselves.

Charging has come under severe criticism in some quarters. For example, single parent charity Gingerbread has said that it has led to a significant drop in the number of parents seeking help, due to them not being able to afford the charges.

And that is where the DWP documents come in, as the Government seeks to fight back against criticisms of its policy. In actual fact, despite the fact that, as the DWP says, the documents are supposed to be part of a 30-month review into the impact of charging by the CMS, they don’t say much about charging at all. Amongst the charging-related points that I gleaned from the documents were the following.

The CMS carried out a survey of former CMS clients who had begun the process of applying, but had closed their application. Of these, more than half (53 per cent) had a ‘Family Based Arrangement’ (FBA) for child maintenance, i.e. they sorted it out themselves, without getting the CMS to do it for them. One in six (17 per cent) of them said that the reason for setting up an FBA was not that they thought it was a better way, but simply that they wanted to avoid paying the charges.

As part of the reforms, old cases that were being dealt with by the Child Support Agency are being closed over a period of three years. The DWP has undertaken a survey of outcomes in those cases that have closed. The survey looked at the influence of the charges on the decision of Receiving Parents whether to use the CMS. This found that:

  • 35 per cent of receiving Parents who paid the CMS application fee reported that the fee was difficult to afford.
  • Among Receiving Parents without a maintenance arrangement at three months, the £20 CMS application fee was cited as a factor in the decision by nearly a third.
  • Of those with a Collect and Pay arrangement, over a quarter found the ongoing four per cent charge difficult to afford.
  • Around a quarter of Receiving Parents with no arrangement said that the ongoing charges for Collect and Pay influenced their decision.
  • Collection charges also appear to have affected parents’ decision to use Direct Pay (whereby the CMS works out the amount of child maintenance to be paid, but does not collect it) rather than Collect and Pay.
  • Charges also appear to have influenced the decision to have a FBA to some extent.

Lastly, the DWP carried out a survey of CMS Direct Pay clients. Tellingly, this found that “those on very low incomes (i.e. with a gross annual household income below £15,600) were least likely to report that they could afford the [application] fee (14 per cent), indicating that the application fee may be acting as a barrier to some low-income families accessing the service.” Unsurprisingly, the survey found evidence that the collection charges were encouraging parents to choose Direct Pay, rather than Collect and Pay. However, most worryingly the collection charges also appear to be deterring at least some parents who could benefit from Collect and Pay from accessing this service, with ten per cent of those whose arrangement did not work (i.e. the payments were not being made) reporting that wanting to avoid charges was one of the reasons they had not moved to Collect and Pay.

So there we are. The DWP will not trumpet it, but its own research has found that charging deters parents caring for children from using the CMS, particularly poorer parents in the greatest need, it causes financial hardship for many of those who do pay the charges, it deters caring parents from using the CMS to collect maintenance from recalcitrant payers and it means that many of those recalcitrant payers are getting away with not paying what they should. All in all, hardly a glowing endorsement of the Government’s policy.

You can access the DWP documents here.

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  1. Andy says:

    I don’t usually make such a comment but what school of economic maths did any one go to..
    Gingerbread claim the £20.application fee should be removed…what about the bloody charge for the paying parents or have they forgotten..
    It’s idiots like this who clearly support one way traffic for the ever so hard up mothers..
    So the £15600..threshold as cannot afford to pay..what was the survey conducted on..
    Only single jobless mothers..i.e. the VickeyPollard ones who get more hand outs that a person in work…
    All surveys related to this are Bo##ocks.
    What next..fathers pay for the privilege of having a FBA next lets say £ start with…
    What bloody planet is this government on..and Ginger bread for the cause of Mothers..

  2. Andrew says:

    Court fees are now too high, but the principle that if you want to sue the State to collect you have to pay a fee is as old as the hills. Why should CMS be different? Are you seriously suggesting it should be free to use?

  3. Andrew says:

    I meant of course “use the State to collect”. Damn autocorrect.

  4. Christophe DeMoivre says:

    I think the author presents “one” way of looking at it. Another way is perhaps if people are “mature” (physically and emotionally) to procreate – then they should be “mature” enough to sort out finances. So the increased use of “Direct pay” is simply common sense.

    I don’t buy the argument that a “destitute” mother (relatively speaking, of course: someone in receipt of job seekers allowance, tax credits, child benefit, housing benefit, free education, free healthcare, discounted travel (in London), disability living allowance and personal independence payments is not someone I would call “destitute”…) in receipt of nil child maintenance from a father, would decide that she is better off not applying for a CMS case because of an upfront £20 fee. I mean, surely that is not the argument, is it? With regards to ongoing “costs” of collection (where the non-default collect and pay scheme is decided upon), 90-something percent of “something” is greater than 100-percent of “nothing”….My A level maths was some time ago, but I do believe the above comparison to be true.

    A C100 application to Family Court stands at over £200. Considering access to justice is supposed to be a right and not a luxury, I see this as a more acute issue.

  5. Yvie says:

    Its divorced dads earning around £20,000 or so a year who are the ones who are impoverished. By the time they have have paid tax and insurance and between 16-20% of their wages in child maintenance, there is very little money left to start again. No state benefits for them. In any case, they can always live in someone else’s spare bedroom can’t they?

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