Until Parliament Addresses Issues of
BOTH Receiving and Paying Parents, the CMS will Continue to Fail!
The Work and Pensions Select Committee Inquiry into Child Maintenance was published on 2nd May 2017, having taken extensive evidence from individuals, academics and stakeholder charities such as Families Need Fathers (FNF) and Gingerbread.
Families Need Fathers are disappointed that MPs on the Committee have missed an opportunity to get to grips with the underlying issues of the problems and difficulties in the collection of Child Maintenance. The Committee’s report rightly focuses on the difficulties for Parents With Care (PWCs), but fails to investigate or even acknowledge the written and oral evidence from paying parents and expert submissions. Such evidence included input based on a survey of over 800 Families Need Fathers service users as well as numerous individual submissions about the serious underlying problems of the formula used for calculating Child Maintenance. The report gives the impression of key evidence not even having been read. That this evidence does not feature in the Committees report is, we believe, a gross omission that must be rectified by the new Parliament after the general election.
In particular, the Inquiry report misses an opportunity to address:
1. 1. Affordability
The report fails to recommend a review affordability. People cannot pay what they don’t have and the current formula for Child Maintenance does not take into account paying parents’ cost of living. Indeed, the thresholds for paying Child Maintenance have not been adjusted for inflation since 1998 and the Report has nothing to say about this anomaly despite the clear evidence its failure. Dr Christine Davies’ authoritative written submissions on the non-affordability of Child Maintenance by paying parents on low incomes has also been disregarded – her evidence can be seen here and here.
- Discouraging Shared Parenting
The report fails to address the difficulties of shared parenting. In oral evidence the charity Gingerbread agreed with FNF that the Child Maintenance formula is counter to shared parenting arrangements after separation. That Child Maintenance must be paid by one parent to the other even when they essentially share parenting equally is an affront to modern living. It supports the outdated model of father as ‘provider’ and mother as ‘carer’. The 2014 Children and Families Act sought to begin to redress this and attempted to do away with the concept of ‘non-resident’ and ‘resident’ parents. This message seems not yet got through to the Department or the Committee. – Instead of facilitating shared parenting Child Maintenance discourages it.
- Increasing Family Conflict
Families Need Fathers appreciate that Family Based Arrangements, promoted by the Department for Work and Pensions, can and do work for many parents. However, the Committees Report does not address the multitude of ways in which the Child Maintenance formula provides separated parents with a stick with which to beat each other and fight over money rather than encourage collaboration in their children’s best interests e.g. there is a one seventh increase in child maintenance to the PWC for every 52 nights a child spends with the paying parent, however, if a court order for once a week visits is broken even once, the receiving parent can (and many do) ask for this reduction to be repaid – in effect rewarding the breaking of contact orders for children.
The failure of the Committee’s report to make a meaningful impact rests largely on its focus on the issues of receiving parents. Until key issues are addressed for BOTH receiving and paying parents are addressed major difficulties will continue e.g.
- Child Maintenance arrears of £4bn will continue to grow.
- A million children will continue to grow-up without their father in their lives.
- Children will continue to lose out on half of their extended paternal families: grandparents, aunts and uncles, cousins, etc.
These deeply damaging losses to children in both love and support as well as finance will continue and get worse.
Self-Employment
The Committee has put considerable focus on self-employment and the inclusion of the ‘lifestyle’ grounds for variation where it appeared that the paying parent was concealing their income and hence not supporting their child. The logic with removing the ‘lifestyle’ ground for variation was that the ‘income’ figure used moved from net to gross income. Thus, it is far harder to manipulate the primary input.
A re-introduction of this would restore added subjectivity that it was previously thought to be undesirable and which has directly led to many inappropriate assessments by the CSA. If the CMS are given any more discretion, it's likely to result in further challenges. Mandatory reconsideration figures will rise (at increased cost to the DWP) and calculations, which are already un-affordable will be made even more so. It will also lead to potentially vastly different ’legal obligations’ as far as maintenance is concerned for two people with very similar circumstances (that can't be ‘fair’).
Further, there is a difference between efficient tax planning and illegality. Gingerbread imply that these are one and the same, but we question that and suggest instead a focus on aligning the CMS formula with more realistic cost estimates on the cost of bringing up children as well as encouraging more participation of both parents in the process.
The issues of the self-employed, we believe, would be best served by remaining HMRC’s responsibility - to get an accurate picture of people’s earnings/assets and only then for the CMS to make assessments.
We believe that shifting ‘affordability’ assessment back again to the CMS would be a big and retrograde step. After all CMS have not shown themselves efficient or effective when it comes to difficult cases and it seems absurd to have separate assessments of people’s incomes through different departments. It must be more sensible to make HMRC do what it is supposed to do and to leave CMS to make formulaic decisions as much as possible. Additionally, it would appear that this would blur the lines of responsibility and risk further confusion and difficulties.
Poor Value for Money for Taxpayers
The CSA was discredited and replaced by CMS. Key failings of CSA remain unaddressed. The service costs £114m and offers very poor value for money to the taxpayer, parents and children. Child Maintenance needs to be re-thought from top to bottom.
In her evidence to the Work and Pensions Select Committee Inquiry into Child Maintenance on 7th December 2016, the Minister, Caroline Nokes, reported that the cost of Child Maintenance collection service is £114m (2015-16) and that it facilitated the collection of £594m in Child Maintenance payments. In her answer to a subsequent question, Ms Nokes stated:
‘The vast majority of people using the Child Maintenance Service are paying regularly. Seven out of eight non-resident parents are paying a contribution towards their maintenance liabilities every single month. That is the space that we are in: 90% of child maintenance is paid and it is paid on time. We are now talking about the remaining 10%.’
The implication of this is that the vast majority of the £114m cost of the service is spent on chasing around 10% of ‘difficult’ cases – a large proportion of which may be uncollectable given the failure to take into account affordability.
Difficulties of the Child Maintenance Formula
o It lacks an affordability test for the paying parent and thresholds to take into account paying parents’ cost of living have not been reviewed for inflation for almost 20 years.
o It takes no account of relative income.
o It takes no account of debts – mostly incurred in family proceedings
o 15% of paying parents driven into poverty, debt and ill health, some report suicide attempts and suicidal thoughts.
o It disincentivises work - 17% of ‘paying parents’ opt out of work completely.
o It also disincentivises Parents With Care (PWCs) (mostly mums) from working even when their children attend school full-time (32% surveyed).
o CMS 20% collection charge when NRPs have payment difficulties push many further into debt and despair and is inequitable.
o These shortcomings deprive families with children of over £200m a year……and huge amounts of love and parenting.
Jerry Karlin, Chair of Families Need Fathers says “Too many dads are downtrodden rather than deadbeats. Our child maintenance system is inadequate and undermines shared parenting. It discourages parents from working and pushes many into severe hardship and poverty. This Committee’s report simply tinkers around the edges, but does not address fundamental flaws in the system. For the sake of our children, CMS must be completely reformed.”
References:
Families Need Fathers submitted written evidence is here and here, including quotations from respondents to our survey of over 800 service users
Our oral evidence is recorded here.
Oral evidence from the Miniser is here.
FNF BPM Cymru’s written evidence is here.
Authoritative evidence of Dr Christine Davies can be found here and here.
The report of the Select Committee is here
Individual written submissions can be found here.
Please address any queries/requests for data to Michael Lewkowicz at FNF (michael.lewkowicz@fnf.org.uk) or admin@fnf.org.uk.
Notes for editors:
Families Need Fathers - because both parents matter
FNF is a registered charity providing information and support on shared parenting issues arising from family breakdown, and support to divorced and separated parents, irrespective of gender or marital status. FNF is NOT a fathers' rights group - we support the best interests of children - namely mature and collaborative parenting by both parents - an objective which is inadequately promoted in the family court system and associated services.
Our primary concern is the maintenance of the child’s meaningful relationship with both parents.
Founded in 1974, FNF helps thousands of parents every year.
