Berkeley Lifford Hall Accountancy ServicesAlpha BiolabsFamily Law Week Email Subscription

Home > Articles > 2020 archive

Child Breakdown Service

Paul Pavlou, barrister of 4 Brick Court, highlights failings in the system of maintaining the children of separated families in the UK and calls for fundamental change.

Paul Pavlou, barrister, 4 Brick Court

In June this year, four single mothers issued judicial review proceedings against the government for failing to provide an effective method of obtaining unpaid child maintenance. According to Gingerbread, a charity that is supporting the action, there are about 1.8 million single-parent households in the UK and about 1.2 million people are owed child maintenance.

The figures are startling. The resultant economic damage being done to children and families is equally shocking. In a time where breaking from the past is at the forefront of everyone's mind, is there a better way?

Child maintenance is a regular contribution from an absent parent towards the financial cost of raising a child, usually paid to the parent with whom the child lives most of the time. There are traditionally two reasons given why the absent parent should financially contribute to the wellbeing of the child. Firstly, in most countries, there is a legal obligation on parents to financially support their child at least until his or her majority. Secondly, experience shows that the custodial parent, who is responsible for the child on a daily basis, should be assisted. This traditional formulation doesn't sufficiently enunciate the overarching interest of the State in having an effective mechanism for the collection of child maintenance.  An effective child maintenance collection can help reduce child poverty and therefore reduce welfare spending. Lone parents who do receive child maintenance have a lower child poverty rate compared with those who do not receive any 1. If lone parent families are adequately funded, then there is less recourse to the welfare state.

Around the world, the principles of paying child maintenance are applied in different ways. The degree to which the State intervenes in the process varies widely; in Scandinavian countries, for instance, payment of child maintenance is guaranteed by the welfare state as a matter of social policy, whereas in others, such as the UK, it is seen as a private obligation with a special administrative agency employed to assist.

In the UK, the Child Support Agency was set up in 1993 to ensure that absent parents contributed towards the cost of bringing up their children, replacing the court's power to make child maintenance orders. It was not regarded as successful in that it required too complicated and detailed information to establish a figure; had inadequate enforcement; and did not meet the need to bring children out of poverty. A shakeup in 2010 allowed for custodial parents to keep all that was received from the CSA, increasing the custodial parent's income to above social assistance levels. However, criticisms of the Child Support Agency remained and saw it replaced by the Child Maintenance Service in 2012, with new IT systems designed to improve the system.

The Child Maintenance Service brought with it a new ethos of promoting parents to try and resolve the issues themselves, with the Service in the background to assist. There are basically, two systems: Direct Pay, where the CMS calculates the amount of maintenance to be paid and the parents arrange the payments between themselves; and the Collect and Pay Service, where the CMS can collect and manage the payments between the parents. The CMS boasts that if the absent parent refuses to pay their child maintenance, the Service has a range of enforcement actions it can use, such as taking money from the absent parent's earnings or benefits, or directly from their bank or building society, or through court action. It also brought in a fee: a 4 per cent charge on all payments received by custodial parents using the Collect and Pay service and an initial £20 enrolment charge.

By 2017 a further £93m of unpaid child maintenance had developed under the new system with only about 22 per cent of single parents in the UK actually receiving child maintenance 2. The very latest figures show that 32 per cent of parents due to pay child maintenance through the Collect and Pay service paid no maintenance in the quarter ending March 2020.

According to Gingerbread, the Child Maintenance Service has collected a little over £30m through enforcement actions, which is less than 10 per cent of what is owed to single parents across the UK. These statistics formed the basis of an Early Day Motion in the House of Commons in July 2019 which criticised the CMS for having a culture of inaction on enforcement.

That figure contrasts sharply with the reported 100 per cent collection rate in Sweden 3. In Sweden, when an absent parent cannot pay, the payment of child maintenance is guaranteed by the State. In the UK, the State intervenes in cases when child maintenance payments are not honoured, but only to oblige the absent parent to respect his or her responsibilities.

Criticisms of the CMS include the payment of a fee to use the service, the ability of a self-employed absent parent to create complex financial arrangements that are hard to keep track, the inability to obtain funds where an absent parent puts his wealth in businesses in another name, the ability of the absent parent to reopen a case with the CMS after a legal agreement has already been reached in court.

Appallingly, the Government has sanctioned £1.2 billion of the £3.7 billion arrears accumulated under the 1993 and 2003 schemes to be written off in full. Without question, it is a failing system.

In Sweden, a custodial parent who doesn't receive payment or payment in time may receive the payment directly from the government. If an absent parent fails to pay child support, the case is referred to the governmental agency under the Justice Department that is responsible for the collection of all debts to the government, including child support. Specifically, when an absent parent whose child receives advanced maintenance payments fails to pay the amount agreed on, the National Insurance Institute will first send a notice requesting an explanation for the lack of payment. If the absent parent fails to respond, a second notice threatening collection is sent. If the parent again fails to respond, the case is turned over to the debt collection agency for further action. The debt collection agency reviews the absent parent's ability to pay the debt, and determines how much the parent should pay each month and how it should be paid. Garnishment of wages is the most commonly used method of payment and the most effective 4.

The measures in Sweden seem to be replicated in the UK but are far less effective. There does not seem to be any readily available explanation for the failures of debt collection in the UK making ascertaining the differences between the respective debt collection agencies difficult.

New enforcement powers have recently been given to the CMS which include the use of regular and lump sum deduction orders in relation to joint accounts, unlimited partnership, and sole trader accounts. The CMS can also apply for a court order to disqualify the absent parent from holding or obtaining a UK passport. These measures are not dissimilar to those available in Sweden. What these measures do not provide is the immediate payment to the custodial parent of child support.

Gingerbread says that it wants the DWP to use its resources to allow the CMS to investigate all absent parents through the HMRC to see all the payer's income and resources; and that there should be compensation, paid by the government to children and their families where the CMS have made mistakes.

This doesn't go far enough. In my view, there needs to be a fundamental change in the approach by the government. The priority should be in providing funds to children who are the most economically vulnerable. The government should then be given the role of collector for the money already paid out. An incentive that may reinvigorate a debt enforcement agency's efforts. A proper State-backed system would provide basic economic security for children with an absent parent. Any fees imposed for the use of the service on the economically most vulnerable should be scrapped. The obligation of the State to put the children's needs first or place them as its paramount concern should be axiomatic. The judicial review application is the latest attempt to try and resolve, or maybe just publicise, a system that is broken.

1 Hakovirta, Mia & Skinner, Christine & Hiilamo & Jokela, Merita (2018). Child Poverty, child maintenance payments and interactions with social assistance benefits among lone parent families: a comparative analysis. Journal of Social Policy.
2 With £2.5 billion of Child Support Agency 'legacy debt' owed to parents, representing approximately 970,000 individual cases.
3 BEAUMONT and MASON, EU Parliament, FEMM Committee, Child maintenance systems in EU Member States from a gender perspective, 2014.
4 Garfinkel and Sorensen, Sweden's Child Support System, Social Work, 1982.