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Work and Pensions Select Committee inquiry into child support
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Archive - October 2004. Further memorandum from One Parent Families
25 October
1. The continuing malfunctioning of the IT and telephony systems at the Child Support Agency, coupled with the very poor compliance and enforcement levels under the new scheme raise serious questions about the capability of the Government’s current child support reforms to deliver maintenance to children in poor families regularly and in full.
2. We believe the Committee, in its report on the Management of Information Technology projects within DWP (HC 311-I), was right to call for a final deadline date by which the new system should up fully effective in its handling of new cases and a timetable set for migration and conversion of old cases; and, in the event of the deadline not being met, contingency plans to be established to provide alternative strategies to ensure child maintenance obligations are met.
3. The failure of the Department to address this important recommendation in its response to the Committee’s report (Committee’s Second Special Report – HC 1125)) is a major disappointment, given the urgent need for an effective child support system in order to meet the Government’s target halving child poverty by the 2010.
4. We agree with the Committee that it is “make or break” time for the child support system in its present form. Unless the Agency can show in the near future that it can successfully handle both new applications and the transfer of old cases on to the new system, a re-think is called for as to how best to ensure that parents with care get the maintenance they are due.
5. We consider that the time has come for the Government to consider the introduction of an ‘advance maintenance’ scheme, whereby parents with care are guaranteed by the State each week at least a proportion of the maintenance they are due. Research undertaken by the Family Policy Studies Centre in 1999 found that the UK and the Netherlands are the only countries in Europe which have no specific scheme to advance child maintenance, apart from general social assistance.[i]
6. The advantage of such schemes is that they ensure the regularity of at least a proportion of child maintenance entitlement each week, thus enabling parents with care to make plans for the future based on an assured income. Rather than the consequences of erratic or non-payment of maintenance being borne by the recipient family, the State bears that risk. For lone parents in particular, the financial certainty engendered by receipt of regular maintenance can make returning to work – with all the upheaval that can cause in terms of extra expense and loss of benefits - a far more viable proposition. The living standards of children are also protected.
7. We envisage a system where the non-resident parent was assessed for liability as at present. In the event of non-payment, the parent with care would be able to apply for advance maintenance, paid at the full rate if liability is £10 or less per week per child, and otherwise at 75 per cent of the weekly amount due. Advance payment arrangements would then continue for as long as the parent with care wanted them.
8. Clearly, an ‘advance maintenance’ scheme would not cover all lone parents – for example, those who have become lone parents through bereavement, or those where the non-resident parent is living abroad. Nor would it address the current poor performance of the Agency in processing applications to the point of calculation. And in the considerable proportion of cases where the non-resident parent is liable to pay the minimum amount of £5, the financial gain to the parent with care would be small. Nevertheless, lone parents tell us that even this minimum amount could make a difference, in terms of giving them money to spend on “fun activities” for their children, and in putting towards the cost of essential items such as school dinners. An advance maintenance scheme is not a perfect solution; but it does at least ensure that those lone parents who are entitled to child support, do not lose out.
9. Under such a system, the onus would then be on the State to collect from the non-resident parent the advance maintenance paid out, as well as any excess still owing to the parent with care. This would hopefully create a much greater incentive on the part of the Child Support Agency to operate a vigorous enforcement and debt recovery strategy.
10. At present, debt recovery by the Child Support Agency seems half-hearted and lacking in urgency. In 2003-04 the Agency’s Standard Committee[ii] looked at the operation of debt management procedures, in particular, arrears agreements. These are voluntary agreements reached with the non-resident parent for collection of arrears by instalments. On new scheme cases, the new CSA computer system will advice the decision-maker to collect 5 per cent of the non-resident parent’s net income for arrears. If the non-resident parent refuses to make a voluntary agreement or fails to comply, a Deductions from Earnings Order or other enforcement action should be taken. In practice, the Committee found:
- in 97.8 per cent of cases monitored, there was no attempt to operate national procedures;
- the average arrears schedule length was 11.8 years, and in 82 per cent of cases monitored it would take more than two years to recover the outstanding arrears. This appeared to be due to arrears repayment rates being set at unacceptably low levels, with only 7.5 per cent of cases paying more than, or equal to, the enforceable amount.
11. The Agency’s Standards Committee also scrutinised the compliance of staff with enforcement processes. It found that, of the cases monitored in 2003, two -thirds (64.8 per cent) had enforcement action taken which was procedurally or legally incorrect, or the Liability Order calculations were inaccurate; and in a further quarter of cases (25.9 per cent) there were significant errors. The main significant errors were:
- a warning letter of enforcement action was issued but no subsequent action taken (20.4 per cent of cases monitored);
- a delay in enforcement action being instigated at the appropriate time i.e. as soon as it became apparent that a Deduction from Earnings Order was inappropriate or had been unsuccessful (16.7 per cent of cases monitored).
12. Many of the lone parents who contact One Parent Families are owed thousands of pounds in child maintenance arrears and are losing all hope of the Agency recovering what is due. It is unacceptable that such large sums of money are being allowed to accumulate without consistent, accurate and forceful enforcement action being taken to make non-resident parents pay. The effect of such inactivity is to create a culture where non-payment of child maintenance debts appears to be condoned.
13. We believe that the introduction of an ‘advance payment’ scheme for child maintenance would simultaneously improve the living standards of lone parents and make it easier for them to work, whilst incentivising the Child Support Agency to devote considerably more energy and resources to chasing up arrears and taking swift and effective enforcement action.
[ii] Available on the internet ( www.csa.gov.uk) as part of the Agency’s 2003-04 Annual Report.
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