Background to the report
In 2012 the government introduced reforms to the child maintenance system, designed to shift the focus away from government intervention by default, to encourage collaboration between separated parents while providing support to those parents for whom this was not possible, and to reduce costs. The reforms introduced the new Child Maintenance Scheme (CMS) to support the minority of separated families that seek assistance from government with their child maintenance arrangements. If the separated parents use the CMS, paying child maintenance becomes a legal obligation.
The CMS is demand-led. The Department provides an Options service to provide information to parents on how to set up a family-based arrangement without further government involvement. Where that is not possible, parents can use one of the CMS’s two services. Direct Pay involves the Department charging an application fee and calculating the maintenance due but parents transfer money between themselves. Collect & Pay involves the Department charging an application fee, arranging the transfer of money between parents and charging the paying parent 20% and the receiving parent 4% of the amount collected.
Scope of the report
We examined early progress on the CMS scheme in 2014 and concluded that the Department had simplified its administration of child maintenance, but that we were concerned about early signs that fewer than expected parents who had contacted the Options service intended to choose family-based arrangements. In 2017 we reported on the closure of the old Child Support Agency schemes, finding that it was taking longer than expected; that three-quarters of the arrears balance was uncollectable; and that fewer parents were applying to the new CMS scheme than expected.
This report looks at whether the Department is achieving value for money in its management of child maintenance, it examines:
- the child maintenance landscape following the 2012 reforms (Part One);
- progress in improving as far as possible the collection of maintenance through the statutory schemes (Part Two); and
- progress in improving the efficiency and quality of the CMS, while cutting costs (Part Three).
In 2012 the government introduced reforms to the child maintenance system designed to reduce government spending on administering child support and maximise the number of effective maintenance arrangements made without state involvement. These reforms have reduced government’s involvement in child maintenance and reduced costs to the taxpayer. However, the reforms relied on a wider set of integrated, cross-government interventions on separated families and have not, so far, increased the number of effective child maintenance arrangements across society.
The Department’s main focus has been improving its statutory child maintenance service. It has improved value for money in its management of the service and has significantly improved its accuracy and collection rates. The Department acknowledges, however, that there remains much more it can do to improve the service. It does not yet fully understand why those without an effective arrangement do not use its service. It could do more to help prevent around half of Direct Pay arrangements failing, leaving maintenance unpaid. It has improved Collect & Pay collection so that half pay the maintenance due, but its enforcement of the remainder can be too slow to be effective. Furthermore, it still has significant problems with its customer service, both real and perceived, that undermine trust in the service. Meanwhile, the Department has the challenge of what to do with the growing balance of unpaid debts on the statutory schemes, which is giving parents hope that they will receive money that will likely never be paid.