The UK has seen a doubled in the number of single parents who are unable to pay child maintenance.
New figures released today by the National Audit Office, (NAO), show that reforms to government child support services have brought improvements and reduced costs, but that there has been no increase in the number families in the UK who have successful child maintenance agreements.
In 2012, the government reformed child maintenance to encourage separated families to create private family-based arrangements, and to decrease the use of the government’s statutory services.
Following these reforms, the Department for Work & Pensions (DWP) retains responsibility for child maintenance policy, which it sees as confined primarily to the operation of the Child Maintenance Service (CMS).
MDU welcomes you to secure spaces
MDU initiative sees foundation doctor members raise over £30,000 for the Royal Medical Benevolent Fund and the Doctors’ Support Network
CMS offers Direct Pay – where a fee is charged for the calculation of child maintenance payments,2 but parents arrange the transfer of funds between themselves – and Collect & Pay, where the DWP charges more to calculate the payments, collect the money and transfer the money to the receiving parents.
While the number and effectiveness of family-based child maintenance arrangements has increased since 2012, there has been no change in the overall number or effectiveness of child maintenance arrangements. In fact, there has been an increase of parents with no child support arrangement.
Half of divorced families have a child maintenance agreement where at least some maintenance has been received. This is largely unchanged from 2011-12.
A third of the separated families have an agreement that is complete.
The percentage of separated families without a child maintenance arrangement has increased from 25% in 2011-12 to 44% in 2019-20.
The 2012 child maintenance reforms relied on a wider cross government set of policies on separated families. This was laid out in a 2011 Green Paper. According to the DWP, this broader range of cross-government actions is still not as clear as it was.
The DWP has cut the cost of child maintenance administration by keeping its caseload smaller and charging families to use the CMS. It cost the taxpayer £322 million to run CMS in 2020-21. The gross cost to the taxpayer has reduced by £242 million in real terms since 2011-12 and its net costs by a further £40 million from now charging parents to use Collect & Pay.
The DWP has decreased errors in assessing child support due to, from 2.17 percent of the monetary value assessed payments in 2015-16 to a record low 0.65 percent in 2020-21.
The DWP has also increased enforcement activity through activities like Deductions From Earnings orders. However, it can still take many years before child maintenance arrears will be paid if the paying parent doesn’t comply. Meanwhile maintenance arrears can build up, so on average parents owed £2,200 before civil enforcement action was taken and £2,600 afterwards.
The NAO highlight that affordability considerations limit the DWP’s ability to collect payments from parents on low incomes and on benefits. Low-income paying parents are more likely to build up arrears than the higher paid: 46 per cent of paying parents using the CMS do not earn enough to pay income tax (£12,570 in 2021-22), but these parents represented 62 per cent of those with arrears as at March 2021.
Child maintenance calculation rules also do not align with the DWP’s broader aims on employment and in-work progression and can mean some paying parents being no better off if they got a job.
The NAO recommends that the DWP should increase its understanding of why fewer than expected people are using the Child Maintenance Service; assess the affordability and interaction of child maintenance with the welfare system; improve the effectiveness of Direct Pay and Collect & Pay arrangements as it digitalises its systems, and review its write-off strategy for unpaid maintenance payments. These improvements could require the DWP going back to Parliament to amend legislation.
Gareth Davies, the head of the NAO, commented: “Government has succeeded in its goal of reducing both its involvement in child maintenance and the cost to the taxpayer, but its reforms have not increased the number of effective maintenance arrangements across society. Many parents who have separated are still not receiving the maintenance payments they are owed.
“Welfare and child maintenance rules need to align much better to support government’s wider objectives of addressing poverty and helping people into work.”
A spokesperson for DWP toldThe Daily Mirror newspaper earlier today that: “The CMS puts children first – in the last 12 months a record £1 billion was collected and arranged through the service.
“Child maintenance payments help lift around 120,000 children out of poverty each year.
“More than a third of separated parents make their own arrangements without any government support which is better for families and the taxpayer, allowing CMS to focus on supporting parents where that arrangement wouldn’t work or those who won’t pay.”
