Single parent charity Gingerbread has welcomed the new Report from the Public Accounts Committee published on cuts to the Child Maintenance and Enforcement Commission.
The Report shows how plans to slash the budget of the Child Maintenance and Enforcement Commission by £117 million risk undermining plans for a new effective child maintenance service which delivers for children, says Gingerbread.
The Child Maintenance and Enforcement Commission has as its primary goal to maximise the number of children in separated families who are receiving regular child maintenance. Yet the Public Accounts Committee Report draws attention to the way cost considerations are taking first priority, leaving many children at greater risk of poverty.
Commenting on the Public Account Committee’s report, Gingerbread’s CEO Fiona Weir said:
“The Commission is under such pressure to achieve cost savings, the worry is that it will move too soon to start closing down existing CSA cases, hoping that fewer parents will choose to apply to the new system, thus saving it money. Yet parents need the new system and cannot afford for it to fail.”
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A recent poll of divorce lawyers in America has revealed a growth in the number of women paying alimony and child support over the past three years.
The survey, by the American Academy of Matrimonial Lawyers (AAML), found that 56% of respondents reported seeing an increase in the number of mothers paying child support, while 47% also note a rise in women being responsible for alimony following divorce.
Ken Altshuler, president of the AAML, commented:
"The court system always ends up reflecting changes in our society and this is certainly the case with issues regarding who pays child support and alimony. As more women achieve success on their career paths, they are also finding themselves increasingly responsible for financial obligations during and after the divorce process."
Gingerbread, the single parent charity, has issued a statement in response to the recent publication by the DWP of new quarterly performance data from the Child Support Agency (CSA). The figures show that more than 5,000 past and current CSA cases remain over £50,000 in arrears
Fiona Weir, Chief Executive of Gingerbread, said:
“These new statistics show just what an important role the CSA plays in collecting child maintenance from thousands of parents who simply refuse to pay voluntarily. But it is shocking that, in the future, parents looking after children will lose out when the CSA steps in – facing the deduction of up to 12% of any money they are due to receive for their children.
“In recent years the CSA has failed to halt rising arrears, which have grown from £3,761 million outstanding in March 2010 to £3,799 million in March 2012. While Gingerbread supports a renewed focus on taking all enforcement measures necessary to collect child maintenance, the new collection charges will punish the children whose parents refuse to pay.”
The Government has laid an order in Parliament to bring the Child Maintenance and Enforcement Commission (CMEC) back under direct Ministerial control.
Work and Pensions Minister Maria Miller said:
“The Government is clear about how important strong family relationships are for children. All children have the right to financial support from both parents, which is why we are reforming the child maintenance service to put children at its heart.
"Bringing the system under direct control of Ministers will help that process."
The move follows a consultation conducted last year by the Government. The matter will be debated in both Houses of Parliament, and assuming it receives Parliamentary approval, CMEC will be abolished, and its current operational units will become a business unit of the Department for Work and Pensions
Parents will be supported and helped to make their own, family-based child maintenance arrangements, although a new, streamlined and more efficient statutory child maintenance service will be introduced for those who need it.
According to the Child Maintenance and Enforcement Commission (CMEC), the cost of administering a typical Child Support Agency (CSA) case can reach around £25,000 over 18 years. More difficult cases can cost around £40,000, or more.
The case costings are based on two real CSA cases where sustained action was required to ensure compliance. The Government’s proposals for the reform of child maintenance are designed to eliminate from the system cases where parents have the potential to collaborate.
Case 1 was a ‘typical’ case, where the non-resident parent (NRP) paid just under £3,000 in maintenance over 19 months. More than 50 hours staff time was devoted to managing the case, including time spent on the telephone to both parents, tracing and speaking to the NRP’s employer, the calculation of four separate maintenance assessments reflecting changes in his financial circumstances and dealing with a complaint by the parent with care through their Member of Parliament.
Additional costs were incurred through the setting up of a Deduction from Earnings Order and instructing bailiffs when the case fell into arrears. The estimated cost to the CSA over this period was approximately £2,000. Over 18 years, a similar typical case would cost the taxpayer up to around £25,000.
Case 2 was a ‘difficult’ case involving multiple legal actions including liability Orders and County Court judgements, two Charging Orders on the NRPs main home and, ultimately, an order for its sale – at which point the NRP volunteered a lump sum payment. The latter action alone cost the CSA almost £10,000. Total staff time and enforcement costs over 18 years – excluding external solicitor’s fees – amounted to around £40,000.
The Government has recently launched a consultation, setting out how it proposes to deal with some of the £3.8 billion in unpaid child maintenance.
The government is determined to ensure the new, reformed system chases money more vigorously and prevents arrears escalating out of control again.
Work and Pensions Minister Maria Miller said:
“We must move on from the CSA’s past when debt was allowed to escalate at unacceptable rates. We will collect every penny in unpaid maintenance that we can and continue to chase old debt. It is children who lose out when parents refuse to pay.”
Credit industry data is being used to chase the one in five parents who fail to pay each quarter. If they apply for a new credit card, mobile phone or buy expensive luxury items, caseworkers will be able to locate and pursue them.
As well as tackling current cases, thousands of parents with arrears dating as far back as 1993 are having their cases re-examined. So far, more than 100,000 cases with around £600m outstanding have been identified for possible action. Officials have been locating parents’ new addresses and employer details at the rate of up to around 1,000 per week.
Meanwhile limited powers to write-off uncollectible debt in a small minority of cases, and close some others by agreement, will allow caseworkers to target debt that can and should be recovered for children.
More than 1,000 properties owned by parents with child maintenance debts have now been referred for possible seizure and sale. Orders for Sale have been obtained in 150 cases. Almost £2.5 million has been secured for deduction from parents’ bank accounts since new powers were introduced in 2009. The first half of 2011-12 saw a sharp increase in the number of accounts targeted for possible regular deduction order action.