Compliance and arrears consultation responses
Thu 14/12/2017
The public consultation opened today on the above and whilst it will not apply to me
as a now retired XXX XXX for one of the UK's XXX XXX I am very concerned about
the proposed ability to take arrears owed by one party on a joint account from that
joint account. What safeguards are you proposing to show that money held in that
account by the non-liable party is not used to reduce/clear the arrears due by the
other account holder? Your proposals will be against many decades of Case Law as
such joint accounts are basically a Trust account where one party owns 50% with
their holding the other 50% in trust for the other party with the same applying to the
other party. That means that each party owns all or nothing.
In addition you need to consider the Rule in Clayton's Case (Devaynes v Noble
(1816) 35 ER 781) and the first in, first out principal as that will really complicate your
attempts to take money from a joint account. Simply put the liable party has his
wages paid in as does the other party to the account. Prior to your attempting to
appropriate monies to reduce/clear the arrears either or both will have spent some of
the money but unless you use the Rule in Clayton's Case you will not be able to
determine what of the resultant balance is the property of the liable party with the
result that you use the monetary property of the non-liable party for the liable party's
liability. You are constructing a solicitor's paradise of cases to action.
So, what safeguards are you proposing to ensure that the non-liable party's funds
are not appropriated? You may wish to consult with HMRC who also wanted to do
this re tax arrears.
Thu 14/12/2017
Hello there I understand that you help with arrears and collection of child
maintenance ???
Sent from my iPhone
Thu 14/12/2017
Hi
I have serious concern of Child Maintenence committing fraud with there stratagy.
This is because your attempting to gain access ilegally to money from people that do
not own money. As your trying to access joint and partners accounts under false
pretenses you aquire personal financial gain. Under the guise of collecting arrears
which may or may not be valide.
Thank you
Fri 15/12/2017
Dear sir/ madam
As i see you seek to give the CMS even more power to create misery upon the NRP,
hows about you look into training your case handlers into basic maths when
calculating income.
Ive always paid my maintenance on time and yet its come to an annual review and
theyve plucked a random figure out of thin air and now im over XXX in arrears after
only XXXX. I believe the CMS is not fit for purpose and only lifts children out of
poverty after stepping on the heads of other children! I believe that the fact you can
go off GROSS pay and not NET is to further increase your profit while plunging
families into yet more poverty!
Ive never come across such a biased un regulated government body like it, im sure
its run by femanists. I can see why so many people dodge the CMS like an ebola
victim after fathers who are willing to pay are just financially raped and pushed to
suicide, lets just hope the next father whos pushed to the edge doesn't take a few of
you out with him.
Kind regards
Fri 15/12/2017
Further to the news that your requesting "public views" instead of me stating mine in
an email I would very much like to air my views at said consultation, so therefore
please send me date(s) and location of said claimed consultation so I can then have
my views actually listened to and acknowledged instead of this method your using
which in turn will only result in the "negative" responses being dismissed and the
"positive" (if any) actually used.
XXX
The CMS is like the CSA unfit for purpose, a glorified CRIMINAL ORGANISATION
who do not have children's interest at heart and only listen to hearsay and REFUSE
TO ACKNOWLEDGE CLEAR EVIDENCE OF FRAUDULENT BEHAVIOUR and your
constant support of said behaviour
I wish to attend said consultation and demand my voice be heard IN SAID
MEETING. so you lot actually hear the REAL SIDE of the suffering your corruption
causes
Mon 18/12/2017
I am writing to provide feedback about the recently published consultation document.
I also would like to speak to someone urgently about the new proposals.
I feel very strongly about my own experiences as a paying parent being treated
unfairly perhaps due to previous cases making purposeful attempts to avoid paying
for their children out of their care.
XXX
More crucially, there should be due consideration for any court order in place that
deals with contact to reflect the ability of the paying parent AND consideration to gifts
made to the parent with care prior to separation. Calculations should consider the
paying parents own specific costs such as loss of income to maintain contact and
other costs besides subsistence and travel eg supervision for contact and XXd costs,
loss of income.
In that way, any assessor will gain a more accurate picture of what calculations
particularly when there are other dependent children involved.
Should you require further clarification on the above feedback, please do not hesitate
contacting me via email or by telephone
Kind regards
Mon 18/12/2017
These are my thoughts on child maintenance:
1.
It's a deeply sexist notion and practice, a remnant of the previous era of bred-
winner and housewife family model
2.
It does not take into account affordability of both parents and income of
residential parent
3.
The starting point for CAFCASS and the family court system should be why
the child has one residential parent, usually the mother, only, in the first place. Why
shared parenting is not a presumption in law?
4.
Most residential parents, that is usually mothers, blackmail non-residential
parents, usually fathers, the mantra being "give me more money to see your child". I,
personally, am the victim of such anti-child-centric practice that promotes one thing
alone: parental alientation
The government and government agencies have to address now the issue of child
maintenance by getting to the bottom of the problem and this is by making shared
parenting a presumption in law. This will address head-on sexism.
I shall be happy to provide further evidence if required.
Thu 21/12/2017
As a parent who is fighting this joke of a system, I would like to make a few
suggestions as to how to improve the work of the CMS.
XXX
Now, to your recent publication:
Removing passports – I absolutely agree with this. I think it should also be illegal to
go abroad (even on holiday) if one owes child maintenance, just as it is if one has
other type of debts (e.g. council tax, TV licence).
Call for evidence – request for ideas for tough collection and enforcement measures:
just like local councils can hire a collectors company to come and threaten people to
pay their council tax, I believe the CMS should do this. And in case of areas above a
certain amount, to put an interest rate on them to make the debt higher and higher
(similar to what it is with council tax debts). And as it is with collectors companies - if
one doesn't pay on time, a Sheriff knocks on your door. If local councils can collect
their money, you sure can too!
Debts owed to receiving parents – I absolutely disagree with “forgetting” about old
debts. If I don’t pay my rent or bills, I am sure my landlord and the government will
do what they have to get their money. So should do the CMS!
Debt owed to government – same as above!
In addition, I believe all bank accounts of the non-complying parent should be frozen
with no notice and the necessary sum taken out. If they have a mortgage for a
property in West End (XXX), then this property should also be confiscated to recover
the debt – if one can afford to pay mortgage in West End, one surely can afford to
pay 10% of his salary for his child!
Deadlines and timeframes should be much tighter – have provided ALL details of my
ex, including NIN and place of work (XXXXXX)! XX, XXX XXXXX XX XXXXXX
XXXXXX involved (including a trial) – do you think DV victims should even be
allowed to use the Direct Scheme, meaning more control for the abuser?!
Last but not least, maybe, just maybe - if you introduce not only prison sentences but
also unpaid work and fines (yes, more money for the non-compliant parent to owe),
then maybe he or she will get a bit scared of the legal consequences and actually
pay?!
Thank you for your time. I hope my remarks will be taken in consideration.
Merry Christmas!
Thu 04/01/2018
XX welcomes the consultation of this and are keen to ensure that the views of
parents are considered in the consultation process.
With that in mind we would like to raise awareness of XX’s long standing expertise in
consulting with parents on behalf of government departments, organisations and
governing bodies within Northern Ireland. We are able to expertly offer a range of
consultation approaches including focus groups, online surveys, online polls and
telephone interviews.
As a lead organisation in supporting and representing parents/carers and their
families we are in a unique position to recruit parents for consultations. With a long
and abiding relationship with the parents of children of all ages, XX is uniquely
positioned to ensure that the voices of parents are taken into account in this
important consultation. Our work in engaging families across Northern Ireland and
accurately reporting the views and concerns of parents would guarantee that any
change resulting from this consultation accurately represent the opinions of parents.
XX has over 2000 members made up of individual parents and parent support
groups as well as a number of established Parent Groups across Northern Ireland.
We also publicise consultations of interest to parents via Facebook and Twitter as
well as through our monthly ebrief which is widely distributed across our networks.
XX has within the last 12 months carried out consultations on behalf of key
government departments and other leading agencies including:
If you are interested in ensuring the views of parents are included in your
consultation, we would be happy to meet with you to discuss a prospective
consultation along with an outline of costings. If you would like to discuss this further
Thu 04/01/2018
I strongly suggest you look at your ficticious arrears policy you are already overly
heavy handed enforcing incorrectly! The amount of people who will end up claiming
back of the goverment is going to be bigger than the ppi scandal !
This whole CSM department is in shambles poorly managed & discriminating daily.
The whole family couts system bias heavily towards the woman & the false dv claims
to get own way is being abused which puts a slant on the genuine dv cases!
Try chasing regular non payers & false accounting by self employed before
victimising genuine payers with extortinate payments! Taking assessments off gross
pay is a double tax & driving honest working men out of work & in some cases to
their death !
Sun 07/01/2018
Further Improving Compliance Paras 39-41
Views are requested in respect of the notional rate which should be selected for the
proposed deemed income from capital. The 8% rate may have been fair in 1991 but
certainly was not by 2012. Neither is it fair, however, for there to be no deemed
income at all. I suggests that unless income is derived from capital at a greater rate,
there should be deemed income of 2% above base rate in each financial year. This
would avoid the injustice of there being no deemed income, and also the opposite
injustice of a rate at huge variance from the sum which could reasonably be obtained
from capital.
There has to be a balance struck somewhere and it is accepted that any firm rate will
produce unfairness in the cases at either end of the norm. I do not propose that the
rate of 2% above base rate should apply in those cases in which actual income is
earned and declared to HMRC. It would apply in those cases in which a lesser
amount (or nil) was being either earned or declared. Foreign capital could thus be
brought into play. There could of course be practical problems of proving foreign
income and foreign capital but addressing these problems would be better than
ignoring them.
Paras 97-119
Proposals are made in respect of writing off maintenance debt owed to parents.
There is an imperative to carry out such an exercise at a reasonably low
administrative cost, but I suggest that the method proposed emphasis that criterion
at the expense of those who have relied – and have been entitled to rely – on the
assumption that the arrears would be collected.
Letters to each PWC should be sent in such a way that undelivered mail is returned
to CMS. No debt in such cases should be written off.
If the PWC replies to the effect that she wants recovery then recovery should be
effected, or at least, attempts should not be abandoned. Parents With Care have
been statutorily to those arrears and should not be cheated of them just because
DWP has not sufficiently funded the service which should have collected them. If the
fault has been that of the PWC then there may be an argument for write-off. If it has
not then the fault has been that of the NRP or DWP or both. In those circumstances
the arrears should certainly not be automatically written off. The proposals in paras
117-119 are not only acceptable – they should not have been made.
Thu 11/01/2018
Child Maintinace is a disgusting filthy operation
It should have less powers not more Its legalised theft and plundering of peoples
wages and accounts is disgusting,
No wonder we have social problems we do have today, deceitful woman encouraged
to steal peoples DNA and be backed up by the government giving them money
through plundering and theft of assets of the non resident parent
Child Maintenance Service discriminates against all men , that needs looking at,
CHILD MAINTENANCE has bred a new breed of womam whos soul aim is to steal
DNA and get payments,
What should be looked at is a total overhaul
CHILD Maintenance should only apply to Divorcees as children derived from a
marriage are legitimate,
To Avoid misuse of Child Maintenance Service or Children of convenience
unmarried couples at the point of conception or within 4 weeks, should follow this
process thats fair and works for men and woman,
The mother to be should have informed the father to be of her preganancy, and a
consent form must be signed infront of a GP, that states He \ She had planned the
child , 2, the father is in a position to support the child ,
If the father is not in a position to support the child that is noted on the consent form
freeing unfairly treated men from the burden of child maintenance claim in the future,
and also failure to have the consent form signed by the father through non
notification by the mother will also void any future claims for maintenance
As for the mother she has then 2 options, 1 she can continue to have the child thats
her right but knowing before hand she will never be able to claim for maintenance,
Or 2 Have an abortion
This is a fairer system thay works for all and not just the few,
XXX
So stop looking for ways to thief of men, overhaul the system and process ,
discourage illegitimate child births right from the outset by better life choices inturn
changing society for the better
Sun 14/01/2018
I am a single mother and would like to know why the Mothers of the old CSA get a
free service but I have had to pay £20.
I would like to see this changed
Mon 15/01/2018
All arrears from totally absent parents should be tracked down and made to pay
every penny.
Cms can be used by the nrp as a weapon to other parents that pay and support their
children as well as feed cloth and look after them when in their care with no help at
all taking them virtually to breaking point.
My view is to leave parents who pay the (so called main carer)and dads who have
and support their kids. CMS should only get involved when fathers leave don’t come
back and those that don’t give a penny! And chase after the dead beat dads
because the kids loose out on a parent so why should they loose out on every penny
owed?
Mon 15/01/2018
I think the ‘penalties’ for non payment are good if they were actually used.
I would also like to see face to face meetings with non payers like benefit fraud
investigations.
Also the use of private investigators to find information on the ‘difficult’ cases (as cms
says these are in the minority the cost should be low after all) A zero tolerance on
non compliance, not sending information when asked, not updating address, change
of work when required.
Failing all this I would like the government to take over payments and then recoup
this money themselves using hmrc, and other details held.
With regard to the passports being confiscated, if arrears total more than £1000 then
the passport gets blocked. After all these non payers can’t afford to pay for their child
then they can’t afford a holiday.
And also name and shame like hmrc does with companies that don’t pay the
minimum wage. But more localised to the area the debtor owes.
But above all.
Anything that is decided MUST be used! Not threatened. That’s what has allowed all
these arrears to grow in the first place. And will again unless backed up by actions.
---
Tue 16/01/2018
1. Payments should be calculated on current income for that year. Wage slips are
evidence. Do not use out of date historical hrmc data.
2.Affordability of payments should be taken into account, in much same way bank
loan assessments are made.
3. Clearer English should be used in communications.
4. XXX
4. How to apply for child contact costs should be more visible, and costs
standardized..eg Xp per mile to travel to maintain contact.
5. Complaints and appeals procedure needs complete overall. Near impossible at
moment. Suggest a named person as a case manager.
Tue 16/01/2018
This means we are literally pennies from being able to claim any tax credits while the
PWC claims full tax credits. This is leaving our children in poverty. Surely CMS
Maintenence money should be included in the PWC income and not our family
income as we don’t see any of that money?
Tue 16/01/2018
If you were to combine both taking a 'Driving License and a Passport’ on one
application to court along with where appropriate a Liability Order against the non
paying Party, then this would concentrate their mind in one go on their failure to pay.
I am sorry to hear that you feel that a 'Lifestyle' variation is not appropriate; this has
in twenty-two years of practice been a valuable tool in gaining an accurate level of
payment. HMRC do not always have accurate information on everybody?.
I also feel that the formula is biased vs the paying party. The biological imperative is
that both are involved in the conception and both should be financially responsible.
Income of both parties including all those that you cite that payments can be taken
from and to include 'Universal Credit’ should be taken and then compared
percentage wise and the paying party's payment reduced by the percentage
calculation.
Mon 15/01/2018
I think it is absolutely disgusting that you would take any child maintenance from a
joint universal credit claim. This would force the NRP and their family into more
poverty. The fact you would even consider taking money for their children and giving
it to the RP who probably already claims universal credit. I believe that child
maintenance should include both the NRP and RP income jointly together so it can
be split 50/50. Any maintenance should be taken into consideration for benefits and
universal credit purposes for the RP as this would make a much fairer system.
Mon 22/01/2018
I am writing to provide my comments on the public consultation on the “
Child
Maintenance: A New Compliance and Arrears Strategy”. I am writing as an
individual. I am XXX. I am the XXX for the XXX of XXX XXX (XXX). Please find
below my comments on the consultation.
Deduction from Benefit
13. “We propose to extend these powers so that we can continue to deduct from
benefits to collect arrears of unpaid maintenance and intend to apply these powers
to a broader range of benefits including Universal Credit”
Clarification is required as to which benefits this will be extended to before it can be
assessed what impact this would have on paying parents. Clarification is also
needed as to what % the deduction will be from the newly included benefits. This is
especially a concern with regards to Universal Credit. Typically, deductions from
Universal Credit are at higher rates compared to legacy benefits and this is putting
people in financial hardship. For example the Magistrate Court Fine deduction rate
under Universal Credit is 40% of the Standard Allowance (£317.80pm), which works
out at £127.12 per month, compared to £26 per month on the legacy benefits
system. This is putting claimants in extreme financial hardship. Implementing
something like this for CSA arrears/ payments would make financial hardship worse
for paying parents who are likely to already be facing hardship under the new
Universal Credit system.
Call for evidence – request for ideas for tough collection and enforcement measures
16. “
We would like ideas from stakeholders and members of the public on how to
increase compliance from non-compliant clients in this group and others”
If the CSA/ CMS could review a paying parents self-assessment tax return, to see
what assets they have declared, this could provide an indication as to which would
be the best enforcement option to utilise i.e. if they have a car could then instruct
bailiffs.
If no information is provided because the paying parent will not engage and it is not
possible to gather any information because they are self-employed, then could
consider going straight for suspension of driving licence / passport.
If deductions from Universal Credit are allowed then CSA/ CSM will be able to make
deductions on self-employed paying parents Universal Credit, which they would not
have been able to do under the old WTC system.
If CSA/ CMS enforcement powers are increased then the following should be
implemented to try and foster better relations between CSA/ CMS and paying
parents. These are based on my own experience of contacting the CSA/ CMS on
behalf of my clients;
1) The CSA/ CMS should accept written authority, signed by paying parents to
speak to third parties, such as advice agencies and debt advisors about the
case. Often the written authority is mysteriously not showing on the system or
the CSA/ CMS staff just refuse to deal with the third party;
2) A new/ shorter time scale for providing information, regarding breakdowns of
calculations, to paying parents once they have gotten in touch following
enforcement action;
3) Paying parents given more time to dispute calculations they feel are incorrect;
4) A list of what proof CSA/ CMS considers evidence of income from previous
years when a paying parent feels the calculation is wrong
5) The CSA/ CMS to take into consideration genuine cases of hardship and
either freeze collection or consider write offs if the children are adults.
Handling of arrears built up on Child Support Agency cases
Debts owed to receiving parents
17. “
Much of the debt is old (many of the children involved are now adults) and
operational experience is that we have unreliable data for lots of the parents in these
cases”.
If the debt is over 6 years old and no payments have been made in this time then the
debt should be written off, especially if the children are now adults. This would be
the case if the arrears/ debt were a credit debt (s.5 Limitation Act 20180). CSA
should not be allowed to pursue arrears forever.
20. “
Currently, before debt owed to parents is written off we send a letter asking both
parents if they would like to make representations.”
In the letter to the paying parent, they should be given a full breakdown of the
amount outstanding and how that amount has been calculated each year. The
paying parent should then be given the opportunity to challenge the amount i.e. if the
circumstances listed are incorrect for certain years etc. This should be at least 30
days.
Purpose of the consultation
26. “
Deductions from joint bank accounts and the business accounts of sole traders
and partnerships without limited liability”
I do not feel the CSA/ CMS should be allowed to make deductions from joint bank
accounts and this could negatively affect the joint bank holder, who is not the parent
and not responsible for paying the arrears. In a joint bank account it is too difficult to
tell whose money is whose.
---
Sun 28/01/2018
I am responding as an individual with an interest in this subject.
Given the the Government's aim is to support parents and to reduce conflict many of
your
proposals will in fact only increase it.
The CMS primarily deals with parents who FAIL to agree a family based agreement
so the conflict
is already there.
The CMS formula for calculating payments is unchanged in 20 years and causes
hardship in low
income Non resident Parents.
For example:-
A 24 year old working 37 hours in minimum wage of £7.05 per hour would earn
£260.85 per week.
£13.564 per year. After tax and NI he would take home £12,503 per year.
They would not receive any tax credits as the income threshold is above £13,400 for
a single
childless person.
They would pay £36 per week child maintenance if they have contact 1-2 nights per
week which
comes to £1,872 per year.
£12,503 - £1872 = £10,631
or
Gross income £13,400 - £1872 = £11,528 (before tax and NI) yet they cannot claim
working tax
credit as their gross salary is above the £13,400 threshold.
Are you deliberately pushing them into poverty?
This is what happens when the rates remain unchanged in 2O years.
Do you really think this is enough for them to live on, to cover contact costs and have
'quality time'
with their children when they come to stay, to buy them Christmas and birthday
presents, to take
them out for day on top of paying rent, electric, gas, council tax, insurance?
Non Resident parents get NO support for their children, nothing at all. This does
NOT encourage
contact. If they have them less because they cant afford the rent as well then their
his CMS will go
UP. Does the money matter more than their relationship with their children?
Failure to let them have more of their income can only nudge them AWAY from their
children. One
must ask if is this is intentional as if it is then the Government is complicit in parental
alienation.
For someone like this arrears may be inevitable if there is a small crisis of some sort.
Nothing is
done by the government to prevent this. There is a total lack of compassion and
understanding.
Child maintenance each and every time is only ever revised UPWARDS. What have
you ever done
for non resident parents?
Object 1
A single parent aged 24 with two children earning £13,564 per year would get
Working Tax credits
(couple rate) Child tax credits and child benefit. A non resident parent is only entitled
to tax credits
as a single childless person which they are NOT.
There is a huge imbalance here which is unfair. If you do not encourage contact you
are complicit
in parental alienation. It is right that single parents get the help that they do but does
that mean it is
acceptable to push non resident patents into poverty and thus affect their quality time
with their
children?
If a non resident parent is on JSA (£73.10 per week) how do you suppose they feeds
those children
if they stay over twice a week AND meet their other obligations such as gas and
electricity, rent,
travel to work etc.? If he cant afford to have them his CMS payments again go UP.
£7.00 might not
sound a lot but coming from the very low amount £73.10 it is a lot. Again you fail to
encourage
contact by not supporting them you are in effect nudging them away from their
children.
JSA is manifestly inadequate for a person to live on never mind support children.
The whole child support system is too punitive. It needs to be fairer and more
affordable for non
resident parents which in turn would benefit their children when they come to stay
with them.
Case in point - CCHPR's research for Commonweal Housing into housing for non-
resident
parents exposes social injustice faced by children, where maintaining a relationship
with both
parents after separation may be a privilege linked to income.
https://www.cchpr.landecon.cam.ac.uk/news/inisghts-into-housing-for-non-resident-
parentspublished-
by-commonweal-housing?
utm_content=buffer4eb4a&utm_medium=social&utm_source=twitter.com&utm_cam
paign=
buffer
Now lets look at this graph from Joseph Rowntree's analysis of Poverty in the UK in
2017.
What happens to the income of couple families where on of the adults pays child
maintenance to the
single parent?
What does that mean for the children of the couple, will they be worse off as a
family? Are they
actually receiving tax credits only to pay some of them out again to the single
parent?
Does the single parent ever get taken BELOW her benefit entitlement, the amount
he law says her
family needs to live on?
Do the couple families after the paying of child maintenance get taken below the
amount the law
says their family needs to live on? The answer to that is clearly YES. Clearly CMS
causes hardship
to the children of second families. Is this fair?
Is the need to punish the non resident parent so great that you effectively punish the
entire second
family, including their children, financially if they do not have enough for their family
to live on?
This defeats the purpose of the benefit system.
I bet XX never told you of the effect on these families.
This is crazy, taking of the poor to pay the poor when ALL should receive what the
law says their family needs to live on.Again arrears may be inevitable for non
resident parents who go on to have second families.By way of prior family
breakdown a single parent can also be a non resident parent. The children of
single parents can go on to become non resident parents. No one knows what life
has in store for them. Should non resident parents on very low incomes or on
benefits really pay child maintenance? Is this the result of not changing the rates
used to calculate payments for 20 years?
Historic Arrears
The NAO has stated that the CSA arrears figures are inaccurate and have always
been thus. I quote -
'The Department for Work & Pensions (the Department) has not managed 1993 and
2003 child maintenance cases with enough accuracy. Since child maintenance
schemes
began in 1993, the Comptroller and Auditor General has qualified his opinions on the
1993 and 2003 scheme accounts, because of inaccurate assessments and incorrect
adjustments to arrears. Inaccurate assessments can mean that some parents
receive too little for their children while others face hardship because of paying too
much. Arrears are maintenance payments that are owed but have not been paid '
XX who ran the Child Maintenance Enforcement Commision (CSA) to the House of
Commons Works and Pensions committee in 2009 -
'Our average arrears across the case load are about £3,000 something. More than
half of them are less than a thousand— 56% are less than a thousand—but then
there are some very big ones. Typically, the very big ones are what are called interim
maintenance
assessments where, to frighten people into giving us information, we made an
estimate—a process that was used in the 1990s that we do not use any more now—
and about £1.2 billion, so almost a third of the total arrears, is these estimates, and
most of the very big arrears are these figures which were deliberately made big in
order, as I say, to push people into providing data. It works for the Revenue,
apparently, but it has not worked for us. When we eventually catch up with these
people and get the information, typically we write down that calculation by about 70%
because the estimates were very high.' You cannot chase inaccurate arrears.
If you do choose to chase arrears the non resident parents must be given dates and
figures so that they can challenge amounts owed as given the history of inaccuracies
it would be unjust not to do so.
Joint Accounts
This should NOT be attempted given the history of inability of the CSA/CMS to
correctly calculate arrears and it would be an invasion of the privacy of a third party
who is no blood relation to the children of their partner.
This also has huge potential to destroy any good relationships between the resident
and non resident parent which you profess to wish to support. It could also affect the
non resident parents contact with their children should the resident parent decide to
withold same. Our family courts bear witness to the large number of non resident
parents seeking to establish or restore contact.
Passport Removal
Frankly this is gimmicky. How many driving licences have you seized?
Universal Credit
|The roll out of Universal Credit has not been good so far, rent arrears,
homelessness etc. when it collides with the CMS things can only get worse. Again
you should NOT touch the Universal Credit of any partner or person living with the
non resident parent it will only worsen conflict and can only increase conflict in new
relationships which could lead to more broken families. The 5/6 week wait for
Universal Credit will cause a non resident parent to accumulate CMS arrears on top
of everything else plus the repayment of any hardship payment, The amount of
arrears that can accumulate for anyone on UC, single parents, families, single
people is hard enough for them but for a non resident parent it is that bit worse as he
has a bill that true childless person do not have. Again I ask why non resident parent
on benefits have to pay child maintenance given that they only
receive benefits as a single CHILDLESS person or for a second family.
The ONE thing you have never tried is a child maintenance system that is fair and
affordable. A fair and affordable system would most likely lead to regular and
sustained payments and result in much less enforcement. The current system is too
punitive, doesn’t ensure a non resident parent has enough to live on AND meet the
expense of child contact if on low incomes. Australia gives both
parents an allowance. There is much room for improvement and the current
proposals are closer to reverting to the old, failed punitive CSA model rather than to
a modern day child maintenance model that actually cares for both parent and their
children One that lets NO one involved be pushed into poverty and onethat is not
based on contact thus removing the potential to financially gain by witholding
contact. Shared care (50/50) needs to become the norm.
---
Wed 31/01/2018
I make this submission as a former XXX whose, uncompleted & therefore legally un
established, CSA2 case was overtaken by statutory case closure (there no longer
being any qualifying child) in 2008 showing a “fictitious” negative balance.
This “fictitious balance,” having been “processed” through the “Closure & Transition
scheme” to the 2012 Rules Scheme,” was transferred in XX ignoring my objections,
to the Child Maintenance Service (CMS) 2012 Rules Scheme, as a Historic Closed
Arrears only case, supposedly for collection,.
I submit these representations to the consultation process, in respect of “Child
Maintenance, A New Compliance & Arrears Strategy, on my own behalf as an
individual & as a representative of the 5,0000 combined membership of three
established Social Media help & support groups, Child Support Rip Off’s Original
(2550), Child Support Rip Offs (1113) and CSA Hell (1400) a number of whom may
well make their own representations.
As the names of these groups suggest their members, mostly Paying Parents, (PP’s)
have been misused by the Child Maintenance Service (CSA) or the Child
Maintenance Services & their staff.
Consequently they have first hand experience & knowledge of the corporate culture
of prejudice & discrimination, against PP’s in favour of receiving parents (RP’s) ,
labelling them & treating them all as “Deadbeat Dads” or “Absent” Parents”.
Their views have been assembled from their “postings” on these “sites” as are the
examples, “quoted” in all their interventions, by XX
They have suffered the arrogant & aggressive attitudes of caseworkers, & their
general ineptitude, ignorance of the legislation, policies, protocols & procedures
governing their work. Also their inconsistency & failure to observe the Civil Service
Code of practice by not responding to questions or correspondence promptly,
truthfully or in full.
Their repeated failure to record conversations or to accurately record or act upon
information given together with their complete refusal to admit or acknowledge
mistakes or to take remedial action.
These kinds of failings, by the Agencies front line staff & their complete disinterest &
dismissal of personal circumstances, relating to any “ability to pay” the sums
demanded under threat, has caused many of them to have lost their homes or
become alienated, at the hands of a Receiving Parent who is narcissistic,
manipulative & controlling but actively encouraged & enabled by the CSA/CMS, from
their children that are involved.
Others have had new relationships fail as a result of the pressures, imposed on new
partners of a PP, with their inability, as a result of excessive demands & enforcement
action made on behalf of their RP, to financially support the children of their “second
families” & so the relationship,
In these circumstances, being unable to support themselves, still others have been
forced to give up working & resort to claiming benefits in order to simply survive!
The derisory allowance made for second family children is highly discriminatory, not
only against them but against PP’s, in that a RP can have as many more children as
she or he may like with no fear of financial consequence whilst, a PP & any new
partner, must take into account the affordability of the increased costs of doing so in
the light of ongoing maintenance demands that they might no longer be able to meet.
This is an intolerable imposition which very frequently affects a PP’s ability to pay
leading to arrears situations that render a PP “non compliant.” The ensuing
enforcement proceedings & subsequent fees resulting in increased payment
demands of up to 40% of gross income can adversely impact directly on an
uninvolved new partner & child.
The PP is not automatically a “deliberate evader or dead beat” but simply moving on
& making a life for themselves but unlike the RP this opportunity is being denied
them as the CMS again makes no attempt to mitigate this major social issue but
seeks to make it immeasurably worse’
In my experience most other common concerns centre around the denial of the
PP’s“ Right To Be Believed,” & being “required” to provide “proof,” which if not “lost,”
is then mostly ignored in favour of what the RP has said in a telephone conversation!
The complaints resolution policy which, if not ignored & actually implemented, takes
you absolutely nowhere neither addressing nor resolving anything. Also the delay,
when advised, in implementing “change of circumstances reassessments”
frequently resulting in contentious arrears. Whatever the CMG might have us
Page 1 of 15
believe, very few potential PP’s enter the process of accepting liability for
maintaining their children, with the avowed intention of “avoiding their
responsibilities.
The tenaciousness & pugnacity of enforcement against themselves, when they
clearly lack any ability to make the payments demanded of them, is often in stark
contrast, when compared to the circumstances of their former partners & children to
whom they are often denied access.
It is these kinds of unmanageable situations makes some of those facing them seek
to minimise, (by perfectly legal means) or as a last resort, default on their assessed
payment simply to be able to survive in the face of extreme hardship & not to
deliberately evade.
Many are amongst the most vulnerable & susceptible members of society who find it
difficult to understand or question what is being done to them & struggle to stand up
for themselves or to cope or express themselves in the face of the abuse of power &
authority they are subjected to.
They are however the very people who truly understand the failings, that you are
now seeking new harsher powers, supposedly to reinforce the pressure you are able
to place on them.
In the interests of equality, not your strong suit, they should have the right to be
heard.
They are frequently told by caseworkers that they have a “responsibility” (changed
from legal obligation which is not in fact true) to maintain their children but again this
is not quite the truth. Responsibility would be more accurately defined as that both
parents have a duty of care towards their offspring both individually & jointly to
support & provide for them according to their means & ability. Neither parent has an
exclusive absolute legal “obligation” or responsibility.
Until the Agencies acknowledge this & stop looking to PP’s alone to support their
children & start considering all cases in “the round,” as involving two participants &
take due notice of both their circumstances, not just those of the RP, then higher
rates of “compliance” will remain an unattainable pipe dream.
In order to “improve” compliance & ongoing “collection rates” you need to recognise
& act upon the fact that it is your own culture & approach that is the single largest
underlying root cause of your historical & present failure in achieving this!
Those that you treat with so little respect or consideration are not going to continue
to respond to an agency which is so prejudiced against them & discriminates against
them at all levels whilst seeking to denigrate them & actively oppress them. In the
course of this you do them real harm & destroy their lives by the abuse & misuse of
outdated & now totally inappropriate legislation & powers.
Just in case you should be tempted to dismiss this submission & the views, of myself
& the 5000 likeminded people, on whose experiences I have drawn in making it,
considering it to be less worthy or to carry less weight, than the submissions, that will
undoubtedly be made by XX & its supporters,
then I would remind you that, as well as being “perceived” as being “the problem,”
we are also a vital & integral part of any solution, the success of which ( if any be
possible) or not, of will very much lie with us!
Ginger Bread represents the wishes of mostly Receiving Parents & is driven by a
small clique of radical activists prepared to sacrifice, their children’s birthright/
unalienable right to have a relationship with both their parents, on the pyre of their
own sense of entitlement.
They are committed to increasing levels of child maintenance, with no thought
whatsoever as to ability of PP’s to pay, to the point at which child support effectively
becomes the “spousal maintenance” to which they believe they are “entitled” but
were denied in the divorce courts which have long since abandoned the principle.
To achieve this they simplistically also, want harsher & harsher enforcement
measures & penalties with increased action to enforce maintenance payments as
well as the recovery of the £4bn + CSA arrears deficit which they seem to think is
money that is lining the pockets of PP’s & somehow immediately accessible to be
paid to them.
Similarly, along with politicians in general & successive responsible Ministers, they
seem to be entirely unable to grasp the concept that, a very significant proportion of
the “uncollected arrears balances,” do not actually exist but are entirely “fictional”
created by your failings & inadequacies over the twenty seven years or so of your
existence.
As such they are not legally “owed” by anyone to anybody, other than by the DWP
by way of Compensation to the RP’s that you have misled & unilaterally failed over
the years.
It would seem, that in the proposals you are putting forward for consultation, that
once again you have allowed XX to “do your thinking for you” in that you addresses
all their aims but totally ignore, the circumstances or “ability to pay,” of the PP.
Page 2 of 15
That you consistently do so is the principle driver, not avoidance or evasion as you &
they would have it, of the continuing increase of the arrears accruals rate within the
CMS that you professes to be trying to reverse.
That this is clearly the case appropriately demonstrates the degree to which this
pressure group has been allowed to exert undue influence, on your strategy &
political thinking, to reduce so termed “non compliance” & “avoidance, so reducing
ongoing accruing arrears levels as well as to recover as much of the, legally mostly
uncollectible historical arrears only balances, as is possible at least cost & without
reflecting upon or examining & acting on the part your own culture & abject failure
plays.
Simply, because basically their stance is in line with the short term performance
objectives of your senior management & exploits the general lack of understanding
or interest in the issues involved, of politicians or the general public, then their views,
are invariably listened to & acted upon rather than any of those of NRP’s. It’s the
“easy option!”
XX is a registered Charity so must be “good.” Unfortunately there is no obligation
upon them, as there is on say medical professionals, to do no harm” & in reality they
are no more than a “pressure group” like any other professional paid for lobbyist, that
uses its excellent public relations facilities & skills to “lobby” on the part of the
“unacceptable face of child support” which is perceived as PP’s not making their
payments.
Ironically it would seem that you have not learnt from past mistakes in that it is
largely, as a result of bowing to these pressures in the past, that you find yourselves
in your current dilemma to which their published “preferred solution” is more of the
same but harsher.
I would suggest, that the need for the current proposals, demonstrates that this
stance has not worked for you in the past & is unlikely to work going forward.
It is clearly time for a complete change of emphasis, to examining the internal
culture, thinking & rationale as to the way you operate & function, for yourselves
rather than to simply
“request further ideas for even tougher ideas of collection
& enforcement” which in itself is no more than a desperate admission of your own
outright failure.
Having presented my credentials & set out my stall so to speak, I will move on to
address & comment on the “Paper” & the proposals now offered for consideration.
MINISTERIAL FOREWARD
I note that no Minister has put their name to this but whoever it was has clearly
simply believed, untested, every thing that they have been told by the senior
management, McCormack et all & added their own political spin to it.
I quote, on this element, from an analysis of these proposals entitled
“Another
Biased DWP Consultation On Child Maintenance, carried out by “Voice Of The
Child” who research & comment on such matters as this & family law.
“Ministerial Foreword.
“This sounds like a lot of self congratulatory nonsense. Our recent survey into the
Child Maintenance Service gave them a Net Promoter Score of -89 (on a scale of -
100 to +100). Over 86% of the surveyed parents rated the CMS as “Terrible” or
“Poor” in relation to the management of their cases. These results are not at all
indicative of a service “working well”.
EXECUTIVE SUMMARY
This is undoubtedly the information upon which the Ministerial Foreword was based.
Whereas with the exceptions of items at 4 & 5 (not enumerated) under “
Objectives”
as they
stand these
are not unreasonable, in relation to what you are about & in line
with what I expect you imagine Ministers would want to see.
Such statements no doubt meet with political approval as indicating positive, largely
popular & acceptable action, according to the “Deadbeat Dad” mantra, & so also find
general political & public favour, however they show, that the thinking behind the
proposals, goes no further than “hit them harder for longer & spread, the
responsibility for liability, wider to those who presently have no part in it but support
& succour them.
You would do well to remember & take account of the fact that statistically over
recent years the majority of divorces are being initiated by those who will become
RP’s by it & that PP’s are not necessarily responsible for
Page 3 of 15
the breakdown of their own relationship but most often bear the financial brunt of the
consequences which an be catastrophic emotionally & seriously adversely affect the
finances of the one having to leave the family home.
As for the majority of the rest of its content, as to your proposed intentions for
achieving them, then in the context of the above the kindest thing that can be said for
it is that they are “economical with the truth” in their interpretation & expression of
that which is presented as fact.
Encouraging Collaboration Between Parents, & The Role Of The CMS 3 - 10
As to your role in “Encouraging Collaboration Between Parents” a recent survey
found that the vast majority considered their relationship, with their former partner, to
be significantly worse following intervention by the CMS.
I would suggest that item 5 under this heading is pure fantasy. What is the name of
this programme, where can this “locally delivered support” be accessed, where is the
proof that it is “proven to help parents work together. I can’t find any reference to it
or indeed anyone who has any knowledge of it.
If it is a reference to CM Options mentioned at 4 then their only practical function is
to encourage RP’s to open a case with CMS.
Item 6 at least acknowledges that you know full well that the majority of RP’s “want
to do the right thing for their children” but to say that the “reformed CMS system
supports them to do this is simply untrue, it certainly does not, the exact opposite in
fact.
This is supported by it’s present parlous state, far from the completely false &
unsupportable “claim” that the CMS has been a “success” to date. (10) & in that you
need to call for these additional powers at all in order to “allow you to” build upon the
success of the CMS.” What success?
At this point I would profoundly challenge that the views being expressed in both the
Ministerial or Executive summaries & at 30 & 31 as being any kind of “
Background”
at all against which these proposals can be considered or justified.
The truth, that these proposals need to be tested against lies in my comments &
criticisms above & in the continuing text.
I cannot believe that those who commissioned, wrote & sanctioned these remarks,
can be so naïve or deluded, as to believe what they are saying themselves, let alone
expect others to.
If they do then they are on the cusp of being certifiable as criminally insane & they
certainly have no place to be running the operation they are responsible for.
If CMS were a public company they would have been “let go” long ago.
Proposed Compliance Measures
Improving Calculation compliance 11- 24
I must particularly contest the claims, made for any superiority of the CMS 2012
Rules scheme or its IT system, over the previous CSA1 & 2 Schemes (as made at
8.0 The calculation process may be simpler & quicker but this is not translating into
acceptable levels of “backlog” with it currently taking at least some 12 weeks to
establish a case & produce an assessment & payment details.
If the you supposedly use information via a “hook up” with the HMRC system (you
are required to use the latest HMRC gross income details – there is an upper Tier
Tribunal ruling on this) why are you repeatedly still making assessments based on
the highest earnings from previous years?
This is one of the most common complaints I see. Gross income is “cherry picked” &
an assessment made that the RP has no hope of making on his present or latest
earnings. A complaint is made & the PP is asked to provide wage slips as proof.
Next thing he hears is that he is in arrears & being put on Collect & Pay. Only once
this is in place is his initial complaint addressed & the assessment reduced but he
remains on Collect & pay & fees are charged for at least 12 months before he is
considered for Direct Pay but probably for the duration of the case.
I will leave you to draw your own conclusions from this but it sounds like a pretty
good business model to me!
The increased automation of the, one size fits all concept & its accompanying IT
system is far from “more efficient” in that, whereas it may be capable of “speeding
up” the actual “sums” of the calculation processes it still relies on information being
inputted. The untouched by human hand approach has resulted in a huge
Page 4of 16
increase in levels of queries & complaints as a result of the non, incorrect or
incomplete information being entered by staff.
This is not then being dealt with immediately so the problem “automatically”
compounds creating, as did the CSA1 & 2 systems, fictional arrears.
Queries/ complaints are so numerous that they are being ignored with the waiting
time, for a response, being anything from three months to mostly never whilst all the
time the “automated” system goes on clocking up arrears which it is then claimed
can only be dealt with at the time that they are “discovered” & can not be back dated
to the point of origin which is theft.
The reality is that like its predecessor the CSA is fast becoming a truly is outrageous
& diabolical scandal
I will deal in detail with the measures (12- 24) being put forward for consultation
individually later as they arise in the “Consultation document.
25 – 29 Consultation details
30 – 31 Background I have covered in my opening remarks
32 Debt owed to government
33 – 38 Closure of CSA - Really?
Further Improving Compliance
CM calculations & new compliance improvement measures (39 – 41)
So far as I can see the only difference, between the 2003 scheme approach detailed
at (40) which is rejected as having “been ineffective in the past” with there being “no
plans to reintroduce it,” is the proposal at (41) is that assets & unearned income
rather than earnings alone are immediately brought to the assessment. If not actually
contrary to the provisions of the 1991 Act this would certainly fly in the face of the
spirit of its Intention which was that a PP should be liable to pay Child Support based
upon earned income only.
Are we to understand that the amendment, to the “information given to RP’s upon
their application, will direct them to include any assets they “might” believe the PP to
have in their possession in order that they might be “investigated” by the expanded
Financial Investigation unit prior to an assessment being made?
If this is to be the case then it would be prejudicial & discriminatory against PP’s if
they are not given an equivalent opportunity to initiate, an investigation of any assets
they might believe the RP to hold with the view to reducing the “need” for additional
Child Support, as it allows a RP to acquire & hold assets without it affecting the
maintenance they receive
It should be remembered that upon divorce the courts will apportion assets between
PP’s & RP’s as it sees appropriate in consequence an asset held by PP may well
have been awarded them to “balance” another awarded to the RP who consequently
has had an equivalent benefit also divorcées a precluded from benefiting from any
subsequent inheritance of the other which I take to include any income from it.
Further it is highly discriminatory to consider the assets of a PP & not to also take
account of any that are held by an RP.
Unless assets are acquired directly from earned income, that would be liable
assessment, in order to specifically reduce liability then ownership of assets is not
“evasion” & should not qualify for assessment under the provisions of the 1991 Act.
Will it be further proposed that the1991 Act be again amended to include assets &
unearned income?
It is difficult not to see this proposal as simply a way to make such RP’s, considered
to be “wealthy,” pay a surcharged level of Child Support in order to satisfy the
objectives of XX who have been very vociferous on the subject
In this context it is ridiculous that Child Support should open ended to earnings of
£3000 per week £156,000 a year resulting in a payment of around £460 p.w. being
due for 1 child far beyond the needs of that child. If a couple were to have remained
together would their spending on their children’s needs have increased expidentially.
It moves Child Support into the realms of “spousal support” again in line with the
ambitions of XX!
It is to be hoped that none of the CMG/CMS management ever find themselves
liable for Child maintenance!
I would anticipate that this proposal will prove to be as open to abuse by RP’s &
therefore as contentious &
Page 5 of 16
expensive to administer as the 2003 scheme was but with many more cases being
involved.
It is of course entirely contradictory to the statement made at (40) that such
measures were not planned to be reintroduced.
Views on :-
If this proposal should be accepted notional income should be calculated, as 20% of
the current “bank minimum lending rate” to a maximum of 3%, on half the value of
any asset.
Minimum values should be set, at half the current local Average House Value, to a
maximum of £150,000.
I strongly disagree that these measures strike any kind of balance or will improve in
any way, on how “complex earners” are assessed but only discriminate against &
further disadvantage them. It is to perversely categorise them all as “non compliant
evaders” & treats them punitively.
Far from “protecting tax payers,” as it will certainly be totally arbitrary & often
contested, it will undoubtedly cost them more for very little return.
The thinking behind this illustrates just how patently Child support is prejudiced in
favour of the RP & actively discriminates against PP’s & just how far the CMS
prepared to go in order satisfy the demands of XX.
Changes To Deductions From Benefits. 42 - 45
Deductions From Universal Credit. 46 - 57
As always with Child Support the underlying motives & strategy behind any new
power is carefully concealed & camouflaged to seem, in themselves, quite trivial &
inconsequential whereas against the full picture the true agenda can be momentous.
The devil is always in the detail which often carries far reaching implications that not
actually expressed.
In these proposals the true intentions are revealed (45 & 52-55) as being :-
1) To effectively include a partners earnings, (45 54 & 55) in the discharge of an
RP’s liability, to increase the amounts that can be collected from PP’s presently
claiming income XXd & non income XXd benefits in their own right or living with a
partner who claims
2) To extend the use the “deductions from benefits system (DFBS),” administered
within the Collect & Pay service as part of the 2012 rules in order to establish a
precedent for the power, currently denied to them under the1991 Act or other Child
Support Legislation, (CSL), to exercise enforcement measures in the collection of
arrears in closed cases where there is no continuing liability in that they are also
proposing that these measures should “apply to all Child maintenance schemes.”
As the two CSA schemes have very few live cases left, do not take on new cases &
are all to be closed by the end of 2018 this seems rather pointless in view of the time
that would be left after implementation.
Is the intention therefore to try to apply these proposals, retrospectively via the
DFBS, to closed arrears only cases, across the CSA 1 & 2 schemes/CMS schemes,
bringing them within the scope of 2) above so as to partially circumvent the
strictures, imposed on collections in respect of these accounts, by the terms of the
1991 Act to which it would be contrary?
If this were to be so then it would not comply with the provisions of the Act which
clearly requires that all agency activity (including enforcement) should end when a
case closes & the liabilities & obligations of all the parties ends, when there is no
longer a Qualifying Child
Is this what is meant at (55) by “helping collect outstanding arrears”
The proposals will collect negligible amounts & they go neither to avoidance or
arrears accruals on the part of the individuals concerned. To me they seem merely
spiteful!
At (52) the intention to add the previously exempt State Pension is added to the
proscribed list of benefits.
In this, as is usual these, measures are the easiest to implement & specifically target
the poorest & most vulnerable particularly Old Age Pensioners who rely solely upon
their State Pension which was previously exempt. ( exploiting the demographics of
an ageing population?)
£8.40 a week may seem a trifling amount but I can assure you, that to those it will
affect, the loss of nearly £500 a year can indeed be a matter of life & death.
Page 6 of 16
More importantly it follows that the vast majority of “pensioners” potentially affected
by this “combination,” of apparently unXXd proposals, will be those with “Historic
Cases” that should likely be written off under the proposals for dealing with such
cases.
Unless & one must suspect from past experience it to be the case, deductions from
their state pensions were to be instigated retrospectively on their closed CSA1/2
cases. These would be involuntary, there being no right of appeal or way of
contesting such a deduction.
Such deductions, from their State Pension would appear to disqualify such cases
from being even considered for write off, under the proposed New Approach For
CSA Debts (99 – 119), as being “current payment being received.”
Hidden away, at Page 23 – 106, in just the few little words
“where a case is more
than ten years old it is” (most if not highly likely) “that the figure we hold is
incorrect” is the “motive” for this subterfuge to exclude “Pensioners,” perhaps to
avoid, the costly required detailed individual examination of the most aged cases,
from the write off scheme proposed later?
This would be despicable enough in itself but it may also be perceived as leaving the
door open for one final chance to collect, which would be lost with write off, by
lodging upon death, a claim as a “Creditor,” with the estate executor upon so
depriving a grieving partner (Adds new depth & menace to Page 15 item 56 “even if
we have to wait until they claim their pension - or die maybe? Does it not!)
In point of fact, as you have in the past & still continue do, you are exceeding your
authority in this as it is the former RP that legally “owns” the debt on an historic
closed account not the CSA/CMS & you have absolutely no legal remit, under
current CSL, to act on behalf of or for them in making a claim.
It would be for the former RP to make a claim, if they could support it with CSA/CMS
documentation that would pass the civil court standards of proof, but a former
spouse would precluded under the terms of their divorce from making a claim on
their former partners estate anyway.
The CSA/CMS of course know this but as, unfortunately few Executors are aware of
it, you are prepared to chance your arm on attempting it & it has proved simple,
cheap & effective for you over the years.
I note that at (57) you quietly slip in your intention to deduct £8.40, to include
charges, from all benefit collections even when the PP isn’t liable to them under
CML. This means that these people will pay some £73 a year more than they are
legally required to. You say that this extra will be applied to the arrears balance of
these individuals but…..
You will also be making a 4% deduction £0.30p per week, £14.50 a year from what
You will pass on to the RP who will receive just £6.72 will this be also applied to the
arrears in these cases?
Small beer maybe but, when applied to the number of cases involved, a not
insubstantial additional revenue.
My views :-
,For the reasons above I completely disagree most strongly with every tenant of
these proposals. They are deliberately specifically targeted at the most vulnerable
ignoring any changes in their circumstances that might affect their ability to pay &
have little or no link to non compliance or evasion.
I believe that they carry a carefully concealed strategy to mitigate the extent of the
“proposals to write off historic debt” both in value & work involved (which with the
manpower you will likely devote to it would keep the CSA systems up & running for
years.) It would keep a steady, if comparatively small, revenue stream flowing
cheaply, from within the benefits system, modestly reduce the remaining CSA
accrued uncollected arrears balances & can be managed on the 2012 Rules system
by transferring it, as you already are, to the CMS 2012 Rules Scheme.
I would urge, that if this is in indeed the essence of your thinking, then if you
do nothing else, please think again on these particularly perfidious proposals.
Deductions from joint accounts 58 - 60
Deductions from sole trader & partnership business accounts. 61 - 70
Choosing to earn a living on a self employed basis and arrange & structure their
personal finances in any way that is most propitious to themselves is an inalienable
right of a free citizen of any democracy.
Having a sole trader or partnership bank account is most often a legitimate
operational necessity for the self employed. This is fiscal awareness & propriety not
“evasion.
Page 7 of 16
I find it difficult to see any differential between this & a RP denying overnight access
in order to exploit the fact that it will increase the amount that they will receive from
the PP yet one attracts oppressive & punitive treatment whilst the other goes
unremarked.
Many PP’s, in today’s economy, are forced into self employment as an alternative to
“zero hours contract” employment, by a change in their circumstances such as the
loss of employment through the failure of their employers business, redundancy,
accident, illness or disability or the inability to live on their income after CMS
deduction orders are put in place. Many would not wish to have to do so but have
little option otherwise
Having either type of account or indeed, a joint personal account, is not any way
absolutely indicative of non compliance or evasion, To portray it as such it is highly
discriminatory as it is to target individuals or their personal joint accounts or business
bank accounts purely, so far as I can see, to be able to access funds that the PP is
not necessarily the beneficial owner.
The principle concerns regarding the proposed processes of implementing such
orders against partnership joint accounts are very much the same as those raised in
the consultation regarding joint “personal” accounts but that have been largely
ignored, in that whatever their rights of representation are given, after the event,
these do not then address, concern before the fact, in respect of the non liable joint
accountholder whose right to privacy & best interests is ignored & compromised by
the request for information prior to any notice being given or order being made. this
represents a gross & considerable breach of their expectation of confidentiality & an
invasion, “of their rights to privacy”
.
I am surprised that deposit takers are prepared to contemplate this as it breaks their
professional codes of conduct & obligations to the non liable account holder. I
wonder how they would stand, even in the face of any legal provisions that might be
brought forward, if the non liable, joint personal or business account holder, gave
specific prior written instructions to the deposit taker that no information was to be
released, without their specific agreement, to any third party regarding their personal
financial affairs, involved within any joint account, on pain of liability, for any resultant
potential hardship, theft or loss of income to themselves or to their business interests
including those attributable to any loss of credibility or
confidence, preventing it from meeting its obligation to its suppliers & loosing credit
facilities as a result their joint account being “frozen,” for any period of time.
They are not going to be satisfied, by unsuccessful “representations” to CMS, they
will look to law, other than that of Child support that of civil, contract, partnership,
business or even criminal law for remedy against the CMS for having meddled in
their affairs.
Both the Deposit Takers & the CMS should brace themselves for breach of trust &
compensation claims from individuals, not connected to the CMS case, but arising
from their actions in pursuing it via both joint personal & business joint accounts
The fact is that it is absolutely impossible to determine beneficial ownership of
monies in a joint account which is why HMRC & deposit takers, adopt a notional
55:50 model on ownership, for their own purposes.
My belief is that, like HMRC, CMS will not have the capability or resources to even
attempt to calculate definitive ownership & will resort to a policy of simply reviewing
say the last three months statements & then take their best guess around 50% + or –
as indeed, they undoubtedly will also do with joint personal accounts, knowing that
whatever they decide will be near impossible to challenge simply by mere
representations but with business accounts the consequences will be far wider &
greater than with personal joint accounts as in many cases, they will actually be
stealing from individuals completely unconnected from their remit who may well react
by bringing criminal actions against them for theft by doing so.
Quote: Voice Of The Child paper “Another Biased DWP Consultation”
“Where it is not possible to establish what funds in the account belong to the
paying parent, we propose to assume that a proportionate share of the funds
in the account belong to the paying parent. The share would be based on the
number of account holders. This means if there are two partnership business
account holders then each would be considered to own an equal share of the
funds held. Accordingly, only the paying parents deemed 50% share of the
funds would be subject to the deduction order.”
Page 8 of 16
The probability is that CMS, full of false confidence from their completely unXXd
“experience” with sole, not joint, personal accounts, will attempt to use these
proposed powers for a time until they realise that deductions from joint accounts,
personal or business are proving, a very different proposition, than they foresaw from
their so called testing & quietly stop using them as the cost is too great in relation to
the return
My views :-
No matter what time, it is decided to let implementation lapse for “representations” to
be made, makes no difference. Those other than the PP whose money will likely be
stolen are unlikely to waste their time trying to argue with CMS but will take advice &
look to other remedies of which there are plenty.
More than enough small business’s fold even with the £2000 allowed by HMRC it’s
the loss of confidence & credit whilst the account is frozen that does for them. There
is no level at which this will not remain a possibility for some.
I think that with the likely small returns, which will diminish rapidly as joint account
holders take perfectly legal action to prevent these orders effecting them, that you
should seriously reconsider the whole issue of orders being made against joint
accounts, personal or business, before CMS get themselves into a whole heap of
bother trying, in their usual inept way, to use them!
I see no way that this fits with the assertions that it will “increase money flowing to
children.”
Removal of passports 71 – 78
This is absurd. It is predicated upon the assumption, that great sums money
supposedly spent by “dead beat” PP’s, on “luxury foreign holidays,” will somehow
become “available” to pay child support.
This is as distasteful derogatory & discriminatory (RP’s can & do indulge themselves
in as many expensive holidays as they like whilst purporting to need child support)
as it is unworkable
It ignores two basic facts
1) That many PP’s such as lorry drivers need a Passport as a condition of their
employment enabling them to travel & work abroad on behalf of their employer who
bears the cost so nothing there “for children.” It’s loss will inevitably lead to
unemployment, again nothing but detrimental, to the best “interests of Children”
2) It is not necessarily the PP who pays for such “holidays” I myself have been able
to enjoy several expensive holidays whilst also being a PP. As is the case, with
many RP’s with new partners, my wife paid for them! Why should I be discriminated
against in this way removing my basic right to freedom of movement, & potentially
preventing me from working or enjoy a holiday when my Ex wife is perfectly free, to
enjoy the wealth of her new husband, with no reflection whatever upon any re
evaluation of her need.
But what do the CMS or our Government care as to the rights, freedoms or equality
of it citizens?
Of course you have this unused power already but now want to use it in the same
way as those you have for imprisonment & driving licences but on your own
admission (71 of this consultation document) rarely even use to further threaten,
bully, harass & coerce PP’s, to reach beyond their ability to pay.
To supposedly “commence to use” the threat of passport removal is simply to
increase the ability to “threaten & intimidate” in the attempt to
“nudge,” (at 15
page7) hard pressed PP’s already struggling to survive & being simply unable to
meet, the often excessive demands being made with no reference to their individual
circumstances, into making payments they cannot afford or for children they are
denied access to or contact with or, as a result of the CSA’s incompetence, don’t
even owe.
An innocent mistake or flagrant manufacturing of figures to “frighten people”?
The House of Commons Work and Pensions Committee (which is the same
Parliamentary Committee that recently recommended increasing sanctions on
paying parents) was told the following in 2009. XX MP asked the following question
(Q49 in the document) of Stephen Geraghty (who ran the Child Maintenance
Enforcement Commission / CSA) at the time.
“
What you said earlier about using calculations,
in a sense, in order to scare
the absent parent,
it also lulls the parent with care into a false feeling of
confidence that she, as it usually is, is going to get more. She thinks she is
going to get so much and she is never going to get that.”
In his reply Mr Geraghty said
“it works for the Revenue, apparently, but it has
not worked for us.”
But you are still using the principal as an integral part of your enforcement strategy!
Page 9 of 16
Quote: Voice Of the Child “Another Biased DWP consultation”
“As with our current powers to remove driving licences and commitment to
prison, we expect the threat of losing a passport to nudge paying parents
towards compliance”.
Once again, as a way of avoiding & operating outside the due processes of law, it is
being proposed that this process will be by way of an application being made to a
Magistrates Court or the Sheriff (in Scotland) ie. the lower courts.
Magistrates/Sheriffs are ley people drawn from the great & good but have limited
legal knowledge. When dealing With Child Support Cases their powers are severely
restricted by CMS/CSA regulations. In effect they are “directed,” by CSA/CMS as to
what they can consider against an order & must approve the application as
presented.
This is certainly not justice & is entirely inappropriate & prejudicial to the PP that an
“order” can be made, on matters which can have so great a detrimental impact,
when it is not possible for them to contest it, at a hearing before the Magistrates,
even as to correctness of fact,.
Applications for charging orders & orders of sale are already made to the County
Court which is where applications, of such implication & importance to the PP
Liability orders, the removal of driving licences, the removal of Passports or indeed
the loss of liberty through imprisonment should rightly be made.
Unlike monies owed to the exchequer via HMRC or the social welfare fund alleged
Child Support arrears are not a “debt” to a “Government Agency” they are to the RP
& merely calculated & administered, on behalf of the RP, by the CMS for the duration
of the case after which ownership remains with the RP.
Where the debt is alleged, by a service that has such an atrocious history with
regard to the accuracy of it’s staff & computer systems. Has been publicly censored
by the National Audit office who have qualified & repeatedly refused to sign of on its
accounts & which has publicly admitted It’s failings then it is again both prejudicial &
discriminatory to alleged defaulters to set it’s enforcement & the measures
employed, outside the parameters of the Civil Debt Process.
I would suggest that “publicity” of the possibility of a County Court appearance
would have far greater “deterrent” value & prove far more likely to “encourage” those,
who seek to evade & avoid their maintenance payments, whilst enabling, those who
genuinely are not, to have the opportunity to make their case to the Court.
My Views :-
It is the place of the Court to set the conditions of surrender according to the
circumstances of the plaintiff. It should be entirely at the discretion of the court & it is
not appropriate for any time scale to be indicated or directed.
I don’t think adding passport removal to the already extensive armoury of
enforcement measures would be any more effective than those already in place.
I think it will do little to “improve” collection rates but that it has the potential to do
significant harm to a PP.
loss of livelihood, loss of home & possessions, disruption of relationships & the
potential loss of the ability to pay in the longer term that would not be in the “interests
of children” or “keep money flowing to them.”
Call for Evidence. 79 - 80
(An abject declaration of failure)
You acknowledge that you are aware that “it is more difficult to establish & maintain
compliance from some “targets” who will go to great lengths to evade.” You admit
that they are small in number & that you want to reinforce their responsibilities.
Why is it then that you treat so many, who are aware of their responsibilities & willing
to meet them, so badly that you force them to disengage with you?
The few true recidivist offenders I believe that you know you probably can do very
little about which is why you basically put so little effort into dealing with them as its
not “cost effective”.
The remaining majority of those who you term “non compliant with arrears evaders”
are so, in the main, because your own intransigence has driven them to it.
You can do something about these cases!
I would suggest that the most significant thing that should be considered is the use of
the power & ability that has always been there & open to you.
Page 10 of 16
Dismiss the present stale CEO & Senior Management Team which, by this “cry for
help”, shows that it lacks the will, understanding or innovation to adequately address
the problems it faces.
Quote: from “Voice Of The Child paper Tom McCormack Must Go
“In any normal commercial private sector organisation it is a generally
accepted principle that if you do a bad job you will be reprimanded. If you
continue to do a bad job then you will be made redundant or unceremoniously
fired.”
Replace them with new individuals who can bring a fresh approach & who are
committed to changing the prevalent culture of prejudice, discrimination & defeat by
putting their own house in order with regard to observing the Civil Service Code,
abiding consistently by the legislation, stop ignoring or “loosing” written
correspondence which should be answered promptly & truthfully. The same goes for
complaints which should be dealt with definitively & honestly including those against
staff.
In recruiting these people you need to look beyond the confines of the DWP. Senior
managers with a retail personal banking background would I suggest be more
appropriate as having the right experience of a high transaction level, customer
facing environment. Who know & understand the vital importance of good customer
relations & service, in engendering confidence & approval in achieving business
objectives as well as the need for the continual ongoing investment in the
technology needed to maintain customer satisfaction.
The only difference, from the business world they know & are successful in, is for
them dissatisfied customers vote with their feet whereas in failing child support they
stop paying!
Whilst you are about it you might want to look at “internal leakage.” It is becoming
increasingly clear that there are increasing levels of inconsistency between monies
paid by PP’s & that being actually received by RP’s. This should have rung alarm
bells long ago.
Another multimillion investment in IT should put most of this right. Compare, to that
of your own, the levels of ongoing IT investment made by deposit takers in order, to
keep up with technological advances in order to, avoid problems, not dissimilar to
your own & to maintain & improve accuracy as well as service levels in respect of
similar sized data bases, transaction numbers & complexity.
Oh & could you actually call back when you say you will.
All this whilst eliminating the concept & use of the catchphrase “dead beat dads,” &
recognising the PP’s “right to be heard & believed by listening to & taking account
of their circumstances.
As I have said PP’s are consistently prejudicially portrayed & targeted with harsher &
harsher punitive penalties as being “the problem” rather than also being a vital part
of the solution.
CMG must not just pay lip service but also react to the fact that the vast majority
enter the system with all good intention & a genuine willingness to support their
children according to their means & ability.
It is only when this ability is exceeded to the point that their very survival is
threatened & when confronted by the crass & provocative manner in, which they are
treated & discriminated against, that their good intention & willingness begins to
waver. In this they are not “criminals” but are invariably treated as such.
In this vein it is ludicrous to continue deny, that child support is integrally linked to
“access” & to pursue a regime that actively encourages RP’s to withhold access in
return for increased payments whilst many PP’s find, that the costs of facilitating
contact, in the face of excessive payments, prohibits them from continuing to see
their children.
Similarly it does not help to effectively ignore a PP’s right, to have & to support,
further children within a new relationship by the derisory & inequitable allowance
made for those children.
As an RP can do this without penalty this is yet again gross discrimination.
The gross income calculation, because of the anomalies within the tax regime in the
treatment of benefits in kind, particularly with respect to the use of company
vehicles, adversely affects many.
It is only by listening to & gaining the trust & cooperation of RP’s “the target group”
that these problems will be addressed to any meaningful extent.
Under these circumstances, & there are many others, it is hardly surprising that
many, already vulnerable, loose any motivation they might have had to want to “do
the right thing.
In my experience it is true say that under these circumstances many respond by
becoming depressed & loose the
Page 11 of 16
ability consider their situation objectively or rationally.
Having to deal with CSA/CMS is not unlike suffering from PSTD with very similar
symptoms being manifested.
You might be surprised at the numbers of those in this position who will tell you, that
even the ultimate sanction, of loss of liberty, no longer bothers them as it would be
better than the place that they are now in.
Some & they number in the thousands, of course feel that taking their own life is the
only option they have left to them.
I understand that these events are not even recorded let alone reported upon!
I don’t recall ever seeing a single instance reported where CSA/CMS have been
cited as being implicated in the suicide of an RP!
This is of course unconscionable in respect of a government sponsored body.
None of this is the doing of the unfortunate PP concerned. It can only be laid fairly &
squarely at the door of the CSA/CMS & their past the past culture, strategy on
enforcement & the direction being taken in ever aggressively pursuing alleged
arrears. Any
new “Compliance & Arrears Strategy,” in order to gain the respect & so their
acceptance by PP’s, must of necessity, include a public admission of & an apology
for, past culpability in respect of so many unnecessary needless deaths together with
proposals for recording & statistically reporting such events & the measures that you
intend to put in place, as a matter of urgency, in order to reverse this unnecessary
ever increasing toll.
It is only by addressing you own in house failures & listening to & regaining
the trust & cooperation of PP’s, “the target group,” that these problems will
ever be addressed to any meaningful extent.
Now we come to the nub of the matter & what this list of inconsequential
pathetic proposals is really all about.
Managing “Historic CSA Arrears”
Is the debt collectable? 81 – 83
What are the costs to collect the debt? 84
Up to 25 years of accumulated “suspended” arrears totalling £3.7 bn of which, that
predating 2008, is now admitted to be likely incorrect (fictitious) 57% relating to
“children” who are now
“adults” of which 57% are no longer “Qualifying children” under the current
provisions of the 1991 Child Support Act putting any fictitious arrears relating to
them firmly beyond the scope of that act
This money is allegedly owed to RP’s that have been actively mislead & lied to as to
their expectations & the CSA/CMS’s total lack, despite the assertions of XX, of any
remit & hence any actual ability to collect it for them.
The costs of attempting, mostly illegally, to collect the full £3.7bn by “working every
case”, as they have alluded to the National Audit Office that they will, is put at £1.5
bn with an over estimated minimum return of “possibly” £0.1bn.
What have we done (in the past to try to collect this (alleged) debt 85 – 87
Part payment trial 88 – 90.
Current write off powers 91 - 92
Well whatever it is it hasn’t been spectacularly successful so far has it!
Even including this in this consultation document is merely to avoid the public
admission, which is somewhat tellingly omitted, that you lack the legal powers to do
any thing but “ask”, using false threats, that you hold no authority or powers to
enforce that former PP’s (FPP’s)should make what amounts to a “voluntary”
payment.
To be fair you have had some limited success with this as a significant number of
FPP’s have succumbed, to what is basically fraud, & paid the fictitious arrears being
demanded of them despite knowing that they do not owe them. Many will have put
their retirement & security in old age in jeopardy by doing so.
Effectively theft with menaces.
Page 12 of 16
Many FPP,s have suffered for many years, with the uncertainty & anxiety as to,
“what, if any, further illegal enforcement” might be attempted against them & when
this might rear it’s ugly head again. Whilst many former receiving parents (FRP’s)
have lived far too to long with the illusion & bitterness of false expectations.
The CSA is correct (for once) to say (96) that it is time to “finally draw the line under”
the uncertainty & misery they have inflicted for so long not only upon FPP’ but also
on government & the “tax payer”. It most certainly is but is this, even now, in fact the
true intention of your proposals?
Options For Managing CSA (alleged) Debt 93&94
Neither 93 or 94 can be seriously considered to be viable options with no others
offered other than:-
The Preferred option 95&96
Unfortunately neither is this a workable solution because it continues to ignore one
basic legislative fact just as the CSA has done for years & the CMS is still doing.
All Child Support activity, Rules & regulations are contingent upon the provisions of
The 1991 Child Support Act (the Act) as amended & the various Orders, Regulations
& amendments that stem from & are covered by it.
The Act is very specific as to who is subject to its provisions & the circumstances
under which they do so & also defines the circumstances under which that liability
statutorily ends.
No where, in any of this Child Support Legislation, is it allowed for that the various
provisions of the Act, including information gathering, calculations, payment
demands or the imposition of enforcement measures should extend beyond statutory
case closure on there ceasing to be any “qualifying” child.
Neither does it bestow any authority upon CSA/CMS to continue as an unpaid debt
collection facility on behalf of a FRP as the client relationship is effectively severed
by case closure.
As any alleged remaining debt is to the RP personally, not the CSA/CMS, then you
cannot pursue it on your own account.
Under the Act, so far as you are concerned, you have no authority, powers,
obligation or remit to continue with the case other than to issue a formal closure
notice. The case is closed just that closed
Of course you know this. I realise that it probably took you some time for it to dawn
on you , perhaps until the early CSA1 cases began to close in numbers in the later
1990’s, but when you did, someone Minister, Senior Executive Management
whoever, took the decision to ignore this “inconvenient” fact, to keep very quiet about
it & carry on in the manner, that you had already gained a thoroughly deserved
reputation for & continue to threaten & bully to extort alleged arrears that you knew in
a lot of cases could not be substantiated & were most likely entirely fictional &
attributable only to the mistakes & failures of the CSA itself!
The legacy of that decision is still with you to this day & this proposal is but its latest
manifestation. The time has come to tell the truth on this & not continue to try to
conceal it behind this :-
Attempted Collection Or Write Off
Debt owed to parents 97- 98
Proposed new approach for CSA debt 99
Opportunity to make representations 100 -107
You advance an approximate IT cost of £700,000 which (with your “value for money”
record is most likely a gross under estimation) but you give no costs of processing
these cases in the way that you are suggesting.
I fear that the prediction, of two thirds uptake, based on the dubious information
gleaned from the limited & selective trial of “part payments” will prove to be overly
optimistic. What is there not to like, for a FRP, in the prospect of a tax free lump
sum?
For some it will also reopen the opportunity to once again, whatever the amount but
the bigger the better, adversely affect their former partners lives. The desire for
“revenge” should never be discounted.
Again even if, my suspicions are correct that eligibility for this scheme is intended to
be reduced by retrospective deductions from benefits on state pensions, is correct I
would suggest that “ “work would be needed to be done” to put far more, than the 90,
000 cases predicted, through “attempted collection route.”
Even, if the cases selected, are subjected to the most cursory of examinations as
evidenced by those supposedly included in the Closure & Transition To the CMS
2012 scheme, rather than the detailed forensic work required to substantiate &
establish that the figures are legally correct (“figures in cases more than ten years
old are most likely to be inaccurate”) then they will generate huge volumes of
contentious dispute & complaint.
Page 13 of 16
The total “costs” of implementing such a scheme is likely to be very considerable
indeed when compared to any realistic level of recovery.
At 104 you acknowledge that for the sake of costs you will only pursue higher value
cases but that these will more likely involve “children who are now grown up.” Just
how compatible is this proposal with “focusing on “collecting money for today’s
children”?
Your “selection” criteria take no account of any, “ability to pay,” on the part of those
being targeted (as being above £500 or£1000.) The higher levels of alleged historic
arrears does not intrinsically indicate greater wealth or ability to pay now but are
more likely the result of a level of poverty then that simply resulted in low level
arrears being accrued over a longer period. This could well still pertain now!You give
no indication as to your expectations of return. I would expect them to be minimal &
certainly not at “reasonable cost to the tax payer!” The proposal is still outside your
powers to implement on historic closed cases with no continuing liability. To do so
would be would still be to act ultra vires.I note with concern that all “opportunities” to
make representations XX specifically & only to the RP
Potential collections activity 108-115
At 108 you say “if the RP responds to our letter saying they still want you to collect
their arrears. How does this accord with the fact that once a case is statutorily closed
you have no obligation or remit to even ask them, leave alone consider, any
representations from
them.
In doing so, as you have no remit or obligation towards them, you
merely continue to mislead & foster their expectations as to your ability to do so.
They have absolutely no part whatsoever in what, is essentially your decision, as to
whether or not to continue acting ultra vires & exceeding your authority & powers in
continuing in attempting to collect any of these monies that you can by fair means or
foul .
Their response to your letter in this, is therefore, entirely irrelevant.
Similarly you do not have the authority or powers, under the ACT, to carry out any or
all of the proposed actions or to make any of the decisions you list at 109 to 111.
Case handling 116
Given, that the whole process lacks any legal standing, that it is predicated entirely
around representations made by RP’s speaks volumes as to the culture of
discrimination & prejudice, within the CMS/CSA, against the PP.
According, to the “step by step process collections activity & write off for debt
owed to parents” flow chart thoughtfully provided, it would seem that the PP is not involved
until the fourth stage of the process.
At this stage they are not invited to make counter representations within 60 days
(reminder @ 30 days) the only option being made available to them being “to
negotiate payment” ie be subjected to intense harassment & threats.
If you wish to proceed with this charade then I would suggest that when a case is
selected as meeting the criteria for consideration then stage three “attempt to trace
paying parent/check case” should be the first stage. Only when this has been done &
the case not having been written off, should a second stage be implemented
whereby both parents should be written to, notifying both, that their case is to be
considered for write off & inviting each of them to “respond” within 60 days (30 day
reminder) with their views & arguments as to, why or why not, the case should not be
written off.
This letter should clearly state the limitations to the CSA/CMS’s powers in the matter
& that any payment would be on a voluntary basis.
To simply ask the one parent “do you want the debt written off yes or no” is totally
unacceptable in terms of equality!
On receipt of both responses the case worker should decide as to whether or not the
case has sufficient merit to warrant contacting the PP to put the RP’s case for what,
from necessity, would be a voluntary payment, not made under threat, by them in
full & final settlement.
Some may well be able to agree & accept the validity of the sum involved & be in a
position to make it
If this is rejected then the RP should be contacted again with an apology, on behalf
of the agency, for this & its past failures. The debt should then be written off & the
case closed on all IT systems.
Page 14 of 16
My views :-
I think that I have made my views, abundantly clear above, as to the legality of any
“action” that you might take in respect of alleged “CSA historic arrears,” it’s efficacy
& likely outcome
The only “reasonable” cost effective option available to you is to write them all
off now.
This will allow you to fully “focus” on reforming the CMS in order to “collect money for
today’s children.” This is much more important, going forward, than devoting
resources to historic cases where you have no ability to achieve any worthwhile
success.
CMS is presently tottering on the brink & unless it is radically restructured soon it will
undoubtedly fail, in the same way & for the same reasons as did the CSA.
The time in which representations may be made is far to long 28 days or 4
working weeks is more than adequate & reminders are unnecessary. In this matter
anyone who wants to respond will do so within the time limit without reminding (save
the taxpayer some money) however this is largely unimportant.
What really matters is that whatever is sent out should be equably & neutrally
worded & goes to both parents at the same time. It should not give individual case
details & should be honest & truthful as to the exact legal position with regard to the
position of the CSA in collecting any debt.
It should include a statement, that for any case prior to 2008, any outstanding
balance is most likely incorrect nor can it probably be supported from CSA records of
the time.
No mention should be made of any threat or offer to enforce collection or of potential
enforcement action being taken as to do so is beyond your powers!
Write off notification, which again should be sent to both parents, needs to contain
no information other than an unequivocal statement that any debt has been written
off, that the case has been closed & that the CSA will take no further interest in it.
The selection criteria for the opportunity to make representations are inappropriate.
All those involved, PP’s & RP’s, are entitled, in the interests of transparency &
equality, to know what is happening in respect of their own particular case
It is “reasonable,” in my opinion, that no written “notification of write off” need be
given on balances below £250.00
Concluding Summary In Respect Of The Proposals Advanced In This “Paper”
1) Additional enforcement measures
None of the measures put forward have the slightest hope of reversing the
continually expanding levels of accruing CMS arrears or of assisting in collecting
Historic CSA cases & lack any appreciation or understanding as to the reasons
driving increasing levels off arrears.
They are unimaginative & lack radicalism. They appear to have been formulated
simply for an easy life for you & to appease Politicians, the general public but most of
all the aims of XX.
They should be withdrawn, whilst the responsible Ministers & the DWP, set about
replacing the
present CEO, Service Heads & senior managers with the appointees
to be tasked with the responsibility of root & branch reform going forward & to
formulate, as a matter of urgency, a completely new compliance & arrears policy,
with as little emphasis as is possible on achieving compliance through enforcement
alone but is reactive to & considers personal circumstances & ability to pay.
The tide is turning against you & the policy & tactics you currently employ, which
belong in the 1990’s, & were outdated even then. They are simply no longer
appropriate for the present day.
They are definitely not working for you now but are fostering growing resentment &
avoidance in those involved.
If you continue as you are the CMS will surely fail, sooner rather than later & with it
any general appetite for the concept of state interference in child support.
2) Dealing with alleged CSA Historic Accrued Arrears.
These have for far too long overshadowed every thing you do. By continuing to
deploy resources, to defend & pursue, past CSA mistakes you neglect the present
problems with CMS & your obligations to today’s children.
You, propose to use your “limited” resources & spend taxpayers money, over what
will surely be an extended
Page 15 of 16
period, by illegally acting outside of any legal remit to FRP’s, in attempting to collect,
alleged historic arrears that you admit you can’t substantiate & are mostly fictitious,
on behalf of FRP’s to which they may well be not entitled to or be even owed by
FPP’s.
You intend to embark upon collecting this, with no legal powers of enforcement,
against FPP’s a high proportion of whom you will undoubtedly “nudge” below the
poverty line. Many will prove unable to pay it. At least at 84 page 20 you finally
acknowledge that “ some will simply not have the resources to pay these debts.” Still
more will undoubtedly contest it.
All this for the sake of collecting a tiny fraction of the potential £415 million, that you
estimate there might be some unlikely possibility of recovering, on the 900,000 cases
that you would have to work on.
Undoubtedly the CSA IT systems would also continue to have to be maintained,
beyond The extended closure date for the CSA itself, December 2018, at £30 million
a year, whilst you try to complete this work.
You have already sought& been granted an extension, from December 2017 until
December 2018, To finally close the CSA.
In my submission to the consultation into that request I said in opposing it that
however much more time you were allowed it would never be enough for you &
indeed in the Executive Summary of these proposals I see that you are still only
“approaching” this objective with even now no definitive date being given.
If you adopt this proposed scheme how many more years extension are you going to
have to request in order to complete it? Several I would think.
You put this forward at the same time that you reveal that you can see no other
alternative but to write off the remaining balances of around £3 to 4 bn or so.
I am sorry but this doesn’t look like least cost or value for money for the taxpayer to
me. Quite the opposite in fact it looks more like a gross misuse of public money. I
wonder how many Nurses, the cost of all this, could put on hospital wards?
OR:-
You can elect to withdraw these proposals, in favour of simply writing-off all historic
CSA accrued uncollected balances now, as the only reasonable or indeed practical
way of achieving your stated objective of addressing this “historic debt” & finally
(after nearly 3 decades) being able to draw a line under the mismanagement, IT &
staff failures & the appalling problems of the past.
30th January 2018
---
Wed 31/01/2018
Calculating on gross is wrong as they never take in to account pension plans, I
know they are meant to but this is not the case in most cases, the percentage of pay
to be taken is way to high it should be lowered to a reasonable amount, the way the
people speak to you over the phone is disgusting treated like crap especially if you
are a male, they would rather you go with out food yourself as long as you pay, it
says in there handbook that they like you and other parent to sort it out first, totally
rubbish they push for collect and pay so cms make money, this is totally wrong your
punishing the paying parent, cms believes the price parent knowing that they are
lieing about overnight stays, pushing the nrp to get a court order in which the nrp has
to pay for, how is that fair, cms is taking more than 40 % in which this is a maximum
that they can take but they take more, more suicide to nrp every year according to
numbers because cms is pushing and pushing to get money, also lies about what
the nrp owes in arrears which is mostly proven wrong due to system error they say,
rubbish, you cms should really look at these emails and Facebook groups to sort this
out, I promise in the future the people, us, will take account of your ways and people
eg cms employees will go to prison over this
Thu 01/02/2018
All areas from CSA should be scrapped. The rule of 25% wage change should also
be scrapped. Payments should solely be on the current wage, not previous wages
---------------------------------------------------------------------------------------
Sun 04/02/2018
I am a XXX, XXX and XXX, practicing in XX. A substantial part of my work has
involved the XXX XXX since before it XXX XXX and since when I have been
desperate to see established the mechanism of child support that the country
needs. I have worked in the XXX XXX XXX XXX throughout this time and have
given XXX XXX XXX on the topic on two occasions.
I very much hope that the upshot of this work will be to step in the right direction.
Yours sincerely
A. Calculation
The proposal to re-instate the “underused assets” category is a step in the right
direction but will not solve the problem of some NRPs getting away with very low
awards. Reinstating this category may pave the way to fair provision for some
children currently left out in the cold but it will not meet the requirements of all and
there are better options. To address this need properly would require:
1) Underused assets
2) Lifestyle inconsistent
3) Removal of “the 12 month rule.”
4) On account payments (and NRPs being confident that repayment would follow
promptly if there had been overpayment)
The extension of these powers would in our view also reduce the burdens upon the
Service and the HMCTS. I look at each in turn.
1) Underused assets
This category was successfully used to create realistic figures in some situations for
many years. Unfortunately it is an expensive and time-consuming approach to
clarifying capacity to pay, requiring:
1) The statutory task of defining assets that come into the mix;
2) The officer or Tribunal being able to identify the assets of the relevant kind that
a party has in a particular case; and then
3) Valuing those assets.
There will be cases where this process can be carried out efficiently but the nature of
the high-net worth international family with complex asset structures will make this
very difficult indeed in a minority, carrying the risk of long proceedings, with
unsatisfactory outcomes:
- What of the NRP in the valuable London home, owned by a Jersey based
company, of which the shares are in a BVI trust?
- What of the NRP who rents his substantial home, drives an expensive car,
takes significant foreign holidays but whose income is relatively low, coming from a
company of which the shares are very hard to value. These arrangements may be in
place for legitimate tax reasons and so be hard to address through a diversion
application.
- What when that person’s share-holding is diluted through a range of family
members who appear to take no significant part in the business?
Valuing company shares or tracing foreign assets:
- Is usually prohibitive for the PWC who does not have the resources to get the
case off the ground;
- If it is done then the case is unlikely to be disposed of at CMS level; an
appeal is very likely when days of tribunal time will be taken to pin down asset
values, from which a notional income is taken from which an award eventually
emerges.
Underused assets would be a useful approach if there were an easy way of clarifying
the assets and an easy way of linking asset owning with capacity to
pay. (Sometimes it works the other way, one case involved a low earning NRP with
an equally low earning – but theoretically valuable, tenanted sheep farm. He was
crippled by the high award that the PWC was able to secure from the tribunal.)
2) Lifestyle inconsistent
Whilst assets can be buried within complex structures and thus lie hidden (unless
revealed through tribunal procedure, at great expense) the same cannot be said for
the “lifestyle inconsistent” category which in my experience has operated far more
effectively as a catch-all for the hard case than underused assets.
- Lifestyle tends to be hard to hide;
- It tends to be what the PWC knows about … she can identify the cars, the
holidays, the purchase price of a home. The provision of the NRP’s credit card
statements provides a relatively quick route to showing the sort of life the NRP is
leading.
- It is a far more accurate indicator of capacity to pay. It also draws the NRP to
the realisation of the disparity between what the child has with the PWC and his own
way of life (and so may generate outcomes that are better accepted).
- It is far quicker at tribunal level – the uncovering of assets and their valuation
is a process as expensive and drawn-out as it is pointless (given that assets may
only be coincidentally an indicator of capacity to pay). But an experienced tribunal
chair will be able to make findings about – in effect – capacity to pay relatively
quickly by examining just a few aspects of the NRP’s life and so dispose of the case
with a finality that is very much harder to appeal than the findings on underused
assets.
The policy makers should review their interest in assets and rejection of
lifestyle. Para 40 of the consultation paper records the DWP’s view that the lifestyle
category was ineffective. That is not my experience of dealing with these cases, nor
the anecdotal experience of colleagues who do this work.
That leads me to wonder whether the rejection of lifestyle inconsistent has more to
do with the ongoing instinct of policy-makers to cleave to what is measurable and
reject what involves discretion (as smacking of the court-based system that the
administrative one has sought unsuccessfully to replace). This mindset has dogged
the search for success since 1991. It creates the risk of significant cost for a system
that is likely regularly to miss the target. Lifestyle inconsistent may appear to be
more of a ranging shot but
- It is cheaper to operate,
- Harder to appeal; and
- More likely to identify more accurately authentic capacity to pay in the
majority of cases.
Furthermore it is not a leap in the dark. We have seen it in operation and it works.
My informal discussions with tribunal members leads me to assert that the tribunals
would prefer the restoration of this avenue to permit them to deal more efficiently and
fairly with the cases coming before them. I hope that policy decisions will not be
made without proper consultation with tribunal members who may not feel that it is
their part to respond to a public consultation. But they are the ones experienced in
the operation of CS2, with significant experience as regards what parts of that
scheme would assist the better operation of CS3.
3) The 12 month rule
The “12 month rule” has been with us for so long (3/3/2003) that it has become for
the DWP part of the unquestioned fabric of the scheme.
1) CS3 represented a completely new approach to determining child support:
a. Prior, the policy goal was to bring families within the administration.
b. Post, it has been to minimise the number of families making use of the service.
2) It is strange to have a policy therefore that
a. Ignores the courts grasp of the realities of the financial position,
b. Seeks to carry out that process anew (when the policy endeavour is to reduce
the service’s spending and the pressures on the tribunal service); and
c. Strips the parties of their child maintenance order (which is usually based on
the CMS formula anyway, unless as is now done regularly, the parties have adopted
a higher-than-cms-formula figure),
d. to replace it with something (usually) lower, when the policy intent of the
service is to promote the needs of children.
3) It serves parents and children particularly badly given that
a. The award is then terminated for all purposes, but
b. the CMS then abandons the children after A-levels, leaving them either
unprovided for during their university years or with a disproportionately expensive
court fight for provision. As university costs rise, so this is likely to create a barrier
for more to entering higher education.
The anomaly operates directly contrary to the interests and intent of the current
scheme and should go. Sir David Henshaw thought so in his landmark report
(Recovering Child Support: routes to responsibility), quoted in the Dec 2017 public
consultation. The restoration of court powers remains one of the very few of his
recommendations not put into being:
Therefore, all parents should be able to access the most appropriate route for
arranging child support:
– completely private arrangements;
– arranging consent orders through the courts; or
– a back-up government provided service for those unable to use other routes.
(at page 28)
58. I recommend that consent orders obtained through the courts should not be
able to be overturned by the administrative system. This would remove the
current 12-month break-point which enables parents to move between consent
orders and the administrative system. The order from the court would be given
primacy and the courts would become responsible for varying and enforcing
consent orders, in effect tying such cases into the legal system. This would treat
new consent orders in the same way as those made before 2003. Variations to
the original order would be decided through the courts if parents could not agree.
This is expected to add a small number of court hearings each year. Further
work is needed to model the number of parents likely to use this route to agree
child support and to assess the detailed impact this would have. This work
should include further analysis on the impact on the courts’ caseload and
resulting costs.
Again this route is tried and tested. It was in place from April 1993 when the
CSAgency went live until 3/3/2003 when CS2 went live. It worked well. It
recognised that duplicated functions (at public expense) were pointless and created
opportunities for the well-resourced and well-advised to scam the system to reduce
their child support obligations. As Lord Wilson of Culworth put it, when sitting as a
High Court Judge
… for a judge to rail against the statutory block placed upon his justification to order
child maintenance is not a knee-jerk reaction to loss of power, nor yet is it the
product of perceived deficiencies in the working of the statutory system. Its basis is...
that the level of child maintenance bears upon the content of the other orders for
capital and/or income provision which it is for the court to make; and that its hard-
won possession of all the relevant material makes it absurd that its resolution of that
one issue has to be foregone. But until Parliament looks again at the interface
between the jurisdictions, judges have to tread an awkward path between the
provisions of a sensible dispute-resolution service for the benefit of children and their
parents, and loyalty to the existing statutory provisions.
V v V (Ancillary relief: Power to order child maintenance) [2001] 2 FLR 799
4) On account payments
It is accepted that complex cases are likely to take a longer period to
determine. Policy is urged to consider whether a “ranging-shot” on account scheme
should be created. Here a standard £100 pw (perhaps) for 1 child on account
payment should be levied so that there are some resources passing to the child
whilst liability is determined thus avoiding arrears build up, creating the habit of
payment, providing some limited provision during this period and avoiding the tactical
incentive on the NRP to delay.
5) Summary
The defects of Child support policy over the years may be seen as a result of a
series of leaps in the dark. The policy makers have today an opportunity to review
what worked well in the past and create from those parts a scheme that better meets
the needs of children and those with responsibility to provide for them. They have
turned to underused assets but are at risk of overlooking tools that would work more
effectively.
B. Arrears
Policy reformers have tended to focus on the extension of powers for the
administrative body, presumably because this plays well with those critical of the
body’s performance. For many years, however, enforcement problems have been a
consequence of lack of use of powers rather than extent. It is against that
background that I consider the proposed removal of passport powers.
The last CSA quarterly stats (March 2017) suggest only ten suspended committals
and five suspended driving licence disqualifications in the 2 years from April
2015. This does not point to regular use of such powers and gives the lie to the idea
that an extension of powers to encompass passport removal is where the policy
makers should be focusing their efforts: an extension of powers when those that
exist are not being used should not be a priority in these reforms.
C. Debt
The write off of debt owed to Government is to be welcomed.
The scale of the debt is a consequence of the structure of the scheme which,
removing discretion has created the difficulty of requiring pound-perfect analysis of
arrears. Opportunities should have been taken in the past to promote mediated
settlements, whereby there is more of a focus upon what the PWC is prepared to
accept and what the NRP can make available to bring the situation to a close. The
proposed writing-off of government debt is the sort of step that creates slack
sufficient for such agreements to be more likely. Our experience to date is that the
administration gives scant encouragement to the promotion of deals and as a result
the possibility of agreements that pass at least some funds to the household of the
child are let pass by.
Other matters
The process at para 41 for considering other income sounds very significant but
insufficient detail is given in the consultation for me to understand what is envisaged
and thus provide a response. I am concerned that errors may be made, where those
with experience of the scheme are unable to make a meaningful contribution to what
may be a significant initiative.
----
Thu 08/02/2018
The non paying parent are getting away with not paying. Once the arrears build up
there isn't any action not there is it's very little . Strict action needs to take place.
Currently the service is not fit for purpose . I've never heard anything good a bout the
service.
The DWP can make an order that disqualifies the person against whom the order is
made from holding or obtaining a “travel authorisation”, such as a passport .Why
hasn't this been brought into force.
There are far to many loop holes in the system. Especially for those who are self
employed and diverting large amounts of income.
Money should be deducted from the business accounts of those who are self
employed
The FIU should be working together with HMRC. how do they currently interlink
surely this will save time and money.If someone is being investigating by hmrc
do child maintenance get notified?
---
Thu 08/02/2018
XXX is the largest XXX XXX in xx representing over XXXXX members employed
across the whole of the XXX XXX in organisations such xx and Voluntary sectors.
This submission on the Public Consultation has been compiled from views gathered
via the XXX internal advisory structures from our members and reps.
Background
1. The Child Maintenance Service (CMS) 2012 scheme was launched in November
of that year to replace the Child Support Agency (CSA) and, prior to that, the
Child Maintenance Enforcement Commission (CMEC). A phased transition is
taking place and while the majority of child maintenance cases continue on the
CSA system, new applications for child maintenance are processed on the 2012
CMS scheme.
2. In December 2017 the Department for Work and Pensions launched a public
consultation entitled Child Maintenance: A New Compliance and Arrears Strategy
including proposals for Debt write-off of both arrears owed to the Secretary of
State and arrears owed to Receiving Parents and new enforcement powers to
recover outstanding arrears.
3. The strategy is intended to inform decisions on which arrears should be
transferred from legacy systems onto the CMS system for future collection as
well as those on additional collections and enforcement powers for the CMS.
Key Concerns
4. The proposal to defer, restrict, limit or write off completely the collection of historic
arrears owed to Receiving Parents (previously termed Parents With Care under
the 1993 and 2003 Child Support schemes) is one which has inherent risks, both
to the individual whose lives may be adversely effected by the impact of being
deprived of the funds to which they are entitled and to the Department for Work
and Pension’s/Department for Communities in Northern Ireland and the Child
Maintenance Service’s reputation. In doing so it will have failed to deliver one of
its core services for a significant number of customers and will also have
undermined the principle that parents have a responsibility to financially support
their children.
5. The presumption of agreement to write-off arrears owed to Receiving Parents
has significant risks both to the Receiving Parent, the (current or former)
Qualifying Child, and to the reputations of the organisations involved (listed at
point 4 above).
6. The proposal not to collect historic arrears owed to the Secretary of State is one
which risks reputational damage to the DWP/DfC/CMS. By failing to recover
funds owed to the Secretary of State, which could be used for funding vital public
services at a time when finances are under increasing pressure CMS risk failure
to perform one of their key functions.
7. That the decision to write-off significant sums of arrears goes against the
principle that parents should take responsibility for supporting their children and
this may drive future non-compliance with Child Maintenance as an individual or
societal activity.
8. That careful consideration of the level of any deduction from Benefit or State
Pension is required in order to ensure that no negative impact is caused to the
welfare of the child in the case for which arrears are owed, the Receiving Parent,
the Paying Parent or any member of their respective households.
9. That careful consideration of increased enforcement powers are required,
particularly in relation to deductions from benefit and recovery of arrears from
assets, property and bank accounts held in joint name in order to ensure
appropriate safeguards are in place to prevent unintended transfer of child
maintenance arrears liability to parties other than Paying Parents (otherwise
termed Non-Resident Parents) under the 1993 and 2003 Child Support schemes.
10. That lack of resources should not be used as a justification for write-off of arrears
owed but rather that appropriate funding is required in order to ascertain correct
arrears balances and subsequent collection on cases with outstanding arrears.
11. The business case for the Arrears Strategy and CMS’ planning for
implementation are based on assumptions. One key assumption is the number of
Receiving Parents who will make representations for CMS to continue to pursue
their outstanding maintenance arrears. The current assumption – 20% - was
based on very little evidence and as such is a risk.
12. A trial is being undertaken regarding this but was only commenced on 19 January
2018, during this consultation period, therefore results will not be available until
after the close. This demonstrates that the assumptions throughout the
consultation paper are unsafe and also demonstrate the lack of preparedness in
CMS to make confident and evidence based decisions on the future arrears
strategy.
Proposed Compliance measures
13. XX questions the lack of detail provided on the intention to strengthen cross-
Departmental investigation links with HMRC intended to expose hidden income
and assets. We believe that in order for a coherent view to be formed on the
“wider range of income information” referred to in Para. 11 of the consultation
paper that clarity needs to be provided on what will be available, how this will be
factored into any calculation of either maintenance assessment or debt recovery
action; including clarity on which (if any) current tax laws are being scrutinised
and reviewed as part of this process, which currently allow Paying Parents to
exploit loopholes and legally (or semi-legally) divert certain types of income
before it is declared to HMRC.
14. The consultation document refers in Para. 12 and 41 to increased resource in the
Financial Investigations Unit (FIU). This is a welcome proposal as the work done
by the members in this area is central to exposing instances of wilful non-
compliance with collection and enforcement activity. XX believe that the level of
additional resource must be commensurate with the levels of outstanding arrears
and deliberate activity to frustrate collections and enforcement of outstanding
arrears and that on this basis there is a need for a significant increase in the level
of resource increase in the FIU. It should be noted that recent FIU recruitment
was to replace losses through attrition and did not in effect increase the overall
team resource.
Handling of arrears built up on Child Support Agency cases
15. XX question the conclusions that the vast majority of arrears is considered
uncollectable. The criteria for determining un-collectability is not clear, nor is
whether this determination has been made in conjunction with consideration of
the effect of extra additional powers proposed by this consultation.
16. It is XX’s view that the criteria for un-collectability should be explicit prior to any
decision and that this consideration should be made in light of a presumption of
the increased powers proposed being granted. This measure should also only be
applied to cases once the arrears balance has been determined by the cases
being brought up to date with a confident figure which can be worked on by the
CMS should it be deemed collectable.
17. XX believe that the most effective use of taxpayers money is to collect the arrears
that are owed for Child Maintenance both to current and historical Parents with
Care and to the Secretary of State, which in turn will produce revenue to reduce
some of the burden on the welfare state.
18. Furthermore XX believe that the XXs write off of arrears will not serve to
encourage future compliance but instead may in effect promote the view that
Child Maintenance arrears can be successfully avoided if payment is sufficiently
delayed.
19. The default position regarding contacting Receiving Parents before write-off to
ask if they require their Child Maintenance arrears collected must be that if no
response to the request is received then this should be treated as a request to
collect the arrears. The view that failure to respond automatically leads to write
off has a significant risk of future challenge.
20. This proposal begs the question therefore as to what will be the position for a
Receiving Parent who did not receive notification and can prove that it was not
their fault (e.g. hospitalisation, CMS sending notification to an incorrect address,
etc.)? Will they have access to an appeal against the decision? Will a reversal of
the decision be possible and if so will there be any negative impact on the ability
to recover this money i.e. if the Paying Parent has been advised that the arrears
has been written off or any system or clerical records relating to the case have
been destroyed as a result of the decision?
21. Past experience of XX members shows that CMS records, including addresses,
may not always be accurate or up-to-date on Departmental systems. Simply
sending two letters 30 days apart to an address which may not be ‘confident’ or
current, before deciding to write-off potentially huge amounts of arrears is in our
view a significant risk to both the individuals concerned and to the Department’s
reputation.
Improving future compliance
22. XX believe that the lack of detail regarding the calculation of notional income and
unearned income is problematic on forming a view on this aspect of the
proposals. Whilst not in opposition to this in principle we are keen to ensure that
notional and unearned income are taken into account fairly for all parties and is
based upon a set of clearly defined guidelines to aid administration of this by our
members in CMS. XX also have concerns that in the past arbitrary figures have
been used regarding notional income and that there needs to be more
transparency as to how figures are arrived at.
23. XX are concerned that proposals to remove passports are fraught with difficulties
in Northern Ireland where all citizens born there are also entitled to Irish
passports.
Deductions from Benefit
24. It is XX’s view that the need to recover outstanding Child Maintenance arrears
and the wellbeing of both the child and the Receiving Parent must be balanced
with the wellbeing of the Paying Parent and that any recovery from benefit must
be carefully considered in order to ensure that none of these parties suffer
detrimental conditions to their future.
25. XX believe that whilst deduction from UC is already in place for those without
earnings at the £8.40 rate that there should be no increase above this level for
UC recipients in receipt of earnings and that for both types of case provision
should be put in place for a reduction where hardship can be demonstrated as a
result of these charges.
26. XX have similar concerns regarding the deduction of arrears from State Pensions
and would wish to ensure that safeguards are put in place to ensure that the level
of collection of any arrears are set at a level which does not have the potential to
cause hardship to either the Paying Parent of anyone within their household.
27. XX would advocate provision for a reduction where hardship can be
demonstrated as a result of these charges on State Pension.
Deductions from joint accounts and deductions from business accounts of
sole traders and partnerships without limited liability
28. XX members working in CMS and the legacy schemes have been clear that the
difficulty in securing outstanding arrears from Paying Parents with only a joint
account is a source of frustration for both the Receiving Parents and
caseworkers. Measures would need to be applied however, to ensure that the
cost of Child Maintenance arrears was taken from the Paying Parent’s share of
the property and that the cost was not transferred to the other party or parties
jointly owning the property or assets.
29. XX believe that despite the measures outlined in Para. 64 to 67 there remains a
significant risk that arrears owed by Paying Parents could be unwittingly or
deliberately transferred to domestic or business partners and that any legislation
or regulations would need to preclude this kind of transfer of responsibility for
arrears payment to non-liable parties.
30. Measures to deliver this may include the requirement of the Paying Parent to
repay this money to the business or domestic joint account prior to being able to
draw upon funds above a certain level per month.
Call for evidence
31. With regard to potential additional Powers to help recovery of arrears, Charging
Orders and Order for Sale jointly owned properties and assets; currently, if a
property or asset is jointly owned by the Paying Parent and another person, the
court process to secure a Charging Order on the property can be followed, but it
will ultimately be ineffective in forcing the Paying Parent to pay the arrears owed
before the funds from the proceeds of a sale of the property or asset can be
released and the charge lifted.
32. Where the property or asset is solely owned by the Paying Parent, once the
charge is applied on the property or asset, the PP’s solicitor is legally obliged,
subject the proceeds of the sale being sufficient, to make arrangement to pay the
arrears covered by the charge on the property or asset, before releasing any
further balance of funds to the seller.
33. There is currently no such legal obligation on the solicitor where the property or
asset is jointly owned. The solicitor is only legally obliged to notify the owner of
the charge of the impending sale. We believe that remedying this situation so
that a charge can be effectively levied from the Paying Parent’s share of the
Property or Asset would be beneficial in securing outstanding arrears in this
situation.
Managing historic CSA arrears
34. XX are concerned at the number of estimates used to draw conclusions on
collection of these historical arrears.
35. XX believe that it is incorrect to draw conclusions that simply because a former
Qualifying Child in a case is now an adult that this should be a reason not to
collect arrears which were owed to a Receiving Parent for their upbringing. There
will undoubtedly be costs which have been paid by Receiving Parents which
make it inappropriate to deprive them of funds which they were entitled to expect.
This proposal again undermines the principle of parental financial responsibility.
36. It is XX’s belief that the primary reasons for the amount of uncollected arrears
has been historic and ongoing under resourcing of the CSA, Child Maintenance
and Enforcement Commission (CMEC) and Child Maintenance Service (CMS)
combined with a history of poor IT systems and questionable policy decisions
regarding the imposition of unsupported interim maintenance decisions in the
past which have led to the current arrears position.
37. XX believe that the best solution now is to provide the requisite resources and IT
to rectify the situation and not to write off billions of pounds of arrears which
otherwise may be collectable for historic Child Maintenance.
Attempted Collection or Write-off
38. XX disagree with the requirement for the confirmation of the request to collect
arrears to be in writing. The CMS accept decisions and notifications via email, the
online portal and telephone on a wide range of issues from its clients. Case notes
made following calls etc. form the basis of decision making audit trails in other
circumstances, and to restrict the decision regarding the arrears in this way
appears to be an attempt to impose an unreasonable barrier to the request to
collect arrears owed to Receiving Parents.
39. XX have concerns that the period for the arrears will not be provided to Receiving
Parents prior to the decision on whether to request collection or not. We believe
that it is unreasonable to expect a decision without possession of the facts of the
case and that failure to provide this may lead to decisions based upon false
assumptions e.g. that the arrears were for a different period and therefore may be
for a lesser amount than the reality of the case.
40. XX also have further concerns that the figures for the arrears for cases over 10
years old will not be provided to Receiving Parents prior to the decision on
whether to collect or not. We believe that it is unreasonable to expect a decision
to be made on this basis and that this will result in decisions which may be
detrimental to the individuals concerned.
41. XX believe that there is a risk that once the 1993 and 2003 scheme computer
systems are de-commissioned there will be reduced availability of critical
information required to identify and calculate arrears owed (such as clerical case
papers) and the detail of the division between arrears owed to the Receiving
Parent and arrears owed to the Secretary of State. This will also impact on any
late challenges due to incorrectly addressed letters.
42. XX question the robustness of the retained records following transfer of records
to CMS and therefore the ability to account for the correct level of arrears owed
on a case. In order to prevent this we believe that all work required should be
done to bring cases up to date and ensure a confident arrears balance and
robust justification for this prior to any decision being requested on collection or
write-off. Sufficient staff resources should be provided to CMS to ensure that this
work is done prior to closure of legacy systems.
Potential collections activity
43. XX are concerned with the proposals in Para. 109 of the paper which concludes
that following checks on the level of arrears and confirmation that the Receiving
Parent requests collection that should the view be that collection appears unlikely
that the arrears will be written-off without agreement by the Receiving Parent. We
believe that this is a very dangerous position and will potentially cause
reputational damage to the Department. XX are also concerned that there is no
detail as to what level or grade within CMS these decisions will be taken at.
44. It is XX’s view that these decisions should not be taken without the agreement of
the receiving Parent as the Department would in effect be depriving them of the
prospect of potentially significant sums despite their categorical request for
collection.
45. XX believe that should such a decision be taken, which we oppose entirely, then
there must be a full Mandatory Reconsideration and Appeal Process available to
the Receiving Parent.
46. Para.111 states that only after decisions on the level of arrears fulfilling the
minimum requirements for collections and confirmation from the Receiving Parent
that they require collection will the arrears balance be checked. It is our firm view
that the checks must be performed prior to the decision on the level of arrears
fulfilling the criteria and the request for collection or write-off.
47. XX question the lack of consideration for the welfare of the child in the decision
making on arrears write-off. We believe that this should be one of the principle
considerations in any decision of arrears write-off for money owed to Receiving
Parents.
48. XX do not agree with the restriction of court based action to exceptional cases. If
the intention is to increase and extend compliance and enforcement why then
restrict this to exceptional cases? We further question what types of cases will be
considered exceptional and what criteria will be involved in this decision.
49. Para. 112 proposes that, where collection activities are exhausted, remaining
arrears will be written off and both clients notified of the decision. XX have grave
concerns that this proposal could lead to the write-off of significant sums of
arrears and that this goes against the principle that Parents should take
responsibility for supporting their children. We believe that this may drive future
non-compliance with Child Maintenance as an individual or societal norm and is
something which should be avoided at all costs.
Writing off debt owed to the Government
50. XX’s view is that a central role of the Child Maintenance Service is the recovery
of arrears owed to the Secretary of State for historic Child Maintenance. It is our
view that to elect to simply write off a potential £1.2 billion of arrears without
taking all reasonable action to clarify the accurate balance and use all available
means to collect them risks a failure to undertake a core activity. Another risk is
the fact there is ongoing enforcement activity on some of these cases.
51. XX advocate the provision of adequate resources to identify the correct arrears
owed to the Secretary of State on each case before consideration of write-off and
believe that investment in order to do so is critical in reaching an informed
decision on what is a reasonable cost for recovery on a case by case basis.
52. XX believe that in making this decision consideration must also be given to the
potential for increasing future non-compliance of a XXs arrears write-off and for
reputational damage by failing to undertake recover the potential £1.2bn which
could otherwise be re-invested in the Public Sector. A scenario where previous
Paying Parents who paid their maintenance decide to seek legal redress cannot
be ruled out.
Your views
53. In relation to the questions raised regarding case handling and the degree of
action required (bearing in mind the under resourcing of the CMS) XX rejects the
premise of this question as we believe that it is incumbent upon the Department
and therefore the Government to first decide the correct actions which should be
taken to handle the outstanding Child Maintenance arrears both to Receiving
Parents and to the Secretary of State and then provide the adequate resources to
perform that function.
54. XX believe that in basing decisions upon available resources and deciding
collection activity based upon the arbitrarily imposed financial restriction is
morally repugnant and that this is an abrogation of the responsibility placed upon
the Department to serve the public. If the central principle that parents have a
responsibility to financially support their children is to mean anything then a
properly resourced CMS arrears collection function is vital.
55. XX believes that some of these proposals and the writing off of historic arrears in
particular has the potential to cause detriment to women in particular and as such
should be subject to an Equality Impact Assessment (EQIA) under Section 75 of
the Northern Ireland Act (1998).
Methodology
56. XX contend that the business case for the Arrears Strategy and CMS’ planning
for implementation are based on a number of untested assumptions. One key
assumption is the number of Receiving Parents who will make representations for
CMS to continue to pursue their outstanding maintenance arrears. The current
assumption – 20% - was based on very little evidence and as such is a risk.
A trial is being undertaken regarding this but was only commenced on 19 January
2018, during this consultation period, and the results will not be available until after
the close. This demonstrates that the assumptions throughout the consultation paper
are unsafe and also demonstrate the lack of preparedness in CMS to make confident
and evidence based decisions on the future debt.
---
Thu 08/02/2018
Further proposals for non-compliant parents
Enforce fines when a parent is proved to have lied to CMS or tribunal.
Enforce fines when a parent wilfully fails to co-operate.
Enforce powers legislated to register debt on the credit register.
National public database of parents in arrears over £1000, including name,
address and company details if self employed or officer of Limited company.
Feedback on status of case from HMRC when reported for tax evasion.
Extend deductions from partnership and sole trader bank accounts to include
Limited company accounts where the non-paying parent has deemed control
of business.
Extend power to remove passport until arrears are paid in full.
Introduce interest calculation on arrears.
Revoke the 4% charge for receiving parents, the receiving parent should not
be penalised for the non-compliance of a non-paying parent.
Historic Debt
Opt-out not Opt-in
My view is an opt-out rather than opt-in letter should be sent to receiving parents.
The government admits (para 17) that they have unreliable data for lots of parents in
these cases. Therefore, many receiving parents may never receive the letter and be
denied the option of these debts being pursed.
The governments part payment trial (para 90) concluded that 32% of receiving
parents wanted their debt written off, or in reverse 68% did not want to write off the
debt.
The government should assume that all receiving parents wish to pursue historic
debt until they opt-out.
Receiving parent able to enforce privately
If the government wish to relinquish responsibility for collecting historic debt, they
must give the receiving parent the ability to privately enforce the debt via court
proceedings or be able to assign the debt to a third party and including interest.
Government to pay outstanding arrears
The government should not unilaterally decide to cancel debt owed to receiving
parents.
If the government intends to write off 1.2bn owed to the tax payer as it is deemed to
be a further waste of tax-payer’s money, it can also compensate the receiving
parents who are owed the remaining £3.7bn.
The government admits that ‘policy, operational and IT issues have contributed to
the build -up of considerable arrears (para 91) – The government should remedy the
situation.
-------------------------------------
Thu 08/02/2018
The writer has personal experience of 12 yrs of Child Maintenance regimes; the
CSA, CMEC, CMO/CMS, ICE, FTT (Social Entitlement Chamber) and Administrative
Court.
‘Historic’ debt
The government’s proposals only XX to outstanding arrears on cases in the 1993
and 2003 schemes (see para.97), some of which dates back 24 years (see para.83).
That presumably also includes all arrears on CSA cases right up until the last one
has been transferred to the CMS, which hasn’t happened, yet. So, some of this debt
is accruing at this moment and is not ‘historical’ at all.
Summary of the government’s proposals
Of the total £3.7bn of outstanding debt, £2.5bn is owed to parents, equating to
approximately
970,000 cases (see para.31).
The government is proposing to write off all debts below £65 unilaterally – which
equates to approximately
495,000 cases (see para. 113).
The government is also proposing to write off all debts less than ten years old that
are below £500, and all debts that are more than ten years old and below £1000,
unless the debtee makes representation within 60 days – which equates to a further
405,000 cases (see para 115). This is because, based on undisclosed ‘business
assumptions’, the government expects just
90,000 cases to proceed to ‘further
collection attempts’.
For comparison, student debt is not written off for between 25 and 35 years.
Of the £2.5bn currently owed to parents, the government expects only £415million
(see para.115) to remain, after this exercise – just 16.6%
In brief, the government proposes to write off the debts owed to
880,000 people
(that’s 970,000 minus 90,000), predominantly women, without making any ‘further’
effort to collect it.
The government proposes to assume that if a debtee does not make representations
after 60 days that they are happy for the debt to be written off.
The government proposes ‘not to include the debt figure in letters where the case is
more than ten years old’ (see para.106) ‘as it is likely that the figure we hold is
incorrect’! This is a most peculiar statement as the government itself cannot possibly
know whether or not the debt is £1000 or more.
Implications of the government’s proposals
Disproportinate impact on women
Firstly, the government has a legal duty to consider how this policy may
disproportionately affect women, the Equality Duty (see the Equality Act 2010).
These are women, predominantly, who may have fallen into debt themselves in
order to provide for their families the resources that the non-resident parent has not
(I don’t refer to them as the ‘paying’ parent, as clearly they are not). Moreover, they
almost certainly will have paid interest on their own debts, whereas no interest has
been applied to the child maintenance arrears (some of which is over a decade old)
at all.
For comparison, the rate of interest on Student Loans is up to 6.1% whereas debts
to the government accrue interest at the Statutory Rate of Interest which is 8%.
While the outstanding arrears may appear small, their relative worth to the debtees
themselves is much greater.
It may not be efficient for the government to pursue a debt of £500, but they have
removed the ability of the debtee to pursue the debt themselves, possibly more
efficiently.
Indeed, while all these cases have been in the hands of the CSA (and other
reincarnations), those families have been denied the right to apply to the courts for a
proper financial settlement.
But quite apart from the pecuniary implications of the government’s proposals, these
debts represent years of anguish to the debtees. Years of having to deal with the
ineptitude, even incompetence, of the government’s successive child maintenance
regimes. This proposal is no less than a kick in the teeth for 880,000 women who
have shouldered the bulk of the responsibility for their children entirely on their own,
and sends an unambiguous message to 880,000 recalcitrant fathers that, having
strung the whole process out for years they will now be rewarded, and relieved of all
financial responsibility for their children.
It is irrelevant how old those children are, now. Imagine how they have suffered and
how much £2.5bn could have relieved that suffering had it been available while they
were growing up. What will they make of this proposal?
Opt-in versus Opt-out
The government admits that in their experience they have ‘unreliable data’ for ‘lots’
of parents in these cases (see para.17). How, then, can they be sure that all debtees
who will be offered a ‘final chance’ to request further enforcement action, will actually
receive any letters that they send? They can’t. Who knows what proportion of
debtees who might have the right to make representations will
never know of the
government’s proposal to write off the arrears?
In effect, the government will assume that if these debtees do not make
representation that they are implicitly agreeing to the debt being written off. This is
not a safe assumption. Even if a third of debtees in the part-payment trial wanted
their debt written off (see para. 90), no reason is given and it is very likely that, on
the basis of their previous dealings with the CSA, they simply do not want to go
through it all again.
But, at the very least this data confirms that two thirds of the debtees who never
receive a ‘final chance’ letter from the government DO want them to pursue the debt
further.
Criteria for refusing further enforcement activity
The government proposes to ‘perform a number of checks to establish whether there
is a realistic chance of collection’ (see para.19). But they do not elaborate on this
anywhere in their consultation document.
If there was an interim maintenance assessment in place, will that preclude a case
from further enforcement action, as implied by para.81?
If a payment has never been received, or has not been received since before 1
January 2012, will that preclude a case from further enforcement action, as implied
by para.82?
If the child is older than 20 years old, will that preclude a case from further
enforcement action, as implied by para.83?
Clearly, the government has not used their existing enforcement powers fully, to date
(see para.71). This is demonstrated by the fact that only now are they proposing to
‘commence’ powers that they were given by Parliament a decade ago (see paras.15
and 72).
And yet, there is a huge potential for the government to unilaterally decide NOT to
take ‘further’ enforcement action on many of the cases where debtees have the right
to make representations. And there is NO ability to appeal this decision.
Future non-compliance
Clearly, the government’s proposal to write off £2.085bn (£2.5bn minus £415million)
of outstanding child support arrears (that isn’t even owed to them) will totally remove
any deterrent to current and future deadbeat dads.
Recommendations
Opt-out
The government should assume that all debtees wish to make further representation
unless they explicitly opt-out.
Further action post-representation
The government should clarify what action has already been taken to enforce all
debts less than ten years old that are below £500, and all debts that are more than
ten years old and below £1000.
The government should list the criteria that they intend to use to determine whether
or not to take further action on cases post-representation.
The government must explain what appeal process is open to a debtee post-
representation, if the government decides there is no realistic chance of collection.
The debtee must be able to enforce the debt directly
If the government wishes to relinquish responsibility for collecting debt, they must
confer on the debtees the ability to enforce the debt via court proceedings, as is the
case in Australia, or assign the debt to a third party, either in whole or in part.
The government should pay the outstanding arrears
As the government admits that ‘policy, operational and IT issues’ have ‘contributed to
the build-up of considerable arrears of unpaid maintenance’ (see para.31), it is surely
incumbent on them to remedy the situation.
And whatever attempts they have made to recover these arrears, which isn’t
explained in their consultation document, have been singularly ineffective. They were
unable to explain to the Work and Pensions Committee Inquiry into the CMS, what
proportion of the debtors has ever been prosecuted for child support evasion.
The government anticipates saving
£90m between 2017 and 2023 (see para.98),
which doesn’t quite accord with the previous statement that they expect to incur
£30m per year for decades (see para.93). Nevertheless, they will save themselves
the cost of transferring all the debt to the CMS (
£230m – see para.94) and the
estimated
£1.5bn that it would cost to attempt to collect the whole of the £3.7bn CSA
debt (see para.84),
£1.2bn of which is owed to the government (see para.31) and
which they intend to write off, in full.
This is £1.2bn which is actually owed to the tax-payer! So, if the government can
afford to waste £1.2bn of tax-payers’ money because they deem it a further waste of
tax-payers’ money to enforce the debt, then they can also afford to compensate the
people who are owed the remainder of the £3.7bn of outstanding debt. It isn’t good
enough, and is quite possibly illegal, for the government to propose to unilaterally
cancel debt owed to anyone else.
These proposals do not contain any estimates for the cost of writing to 405,000
people (once, at least, and possibly twice) and then dealing with the unknown
number of resulting representations.
And it is impossible to calculate the inevitable future cost of dealing with increased
numbers of recalcitrant fathers who will interpret the government’s proposals as a
licence to play the system!
So, there is an overwhelmingly good case for the government to
simply send a
cheque to each debtee for the full amount of the arrears owed to them, out of
the savings they will make by carrying out these proposals, and out of the fines and
collection fees generated by the CMS.
----
Wed 07/02/2018
14. Partnership / Sole Trader business accounts
I would urge caution here, especially in 'partnership' accounts. Without considerable
tribunal/investigative resource it may be difficult to avoid challenges (in the High
Court under Company Law) which will prevent you getting hold of the funds.
If you think you can marshal sufficient resource in order to be able to 'prove' that
funds are purposely being hidden, then it could work.....otherwise, it will only take
one successful challenge at the High Court to close down this avenue
15. Removing Passport
This may be an option to 'punish'...but does not secure any funds. Removal of a
passport may actually be preferential to a driving license, as the latter may well effect
a person's ability to earn an income more significantly than having a passport.
You have said it would be applicable in England, Scotland and Wales.....why not
Northern Ireland?
It shouldn't be done lightly - only if people 'won't' pay......not if they 'can't' pay.
17. Handling of arrears
Have you considered handing over details to Receiving Parents, who could engage
private solicitors (on a no-win no fee basis) or bailiffs, to see if anything can be
recovered?
----
Wed 07/02/2018
Please look at the workings of the CMS again, why should children be penalized by
having to pay to receive money. And please if it's true CMS has powers to sieze
assets to cover arrears then do it.
---
Wed 07/02/2018
1. About us
1.1. XX(XX) is a UK-wide, independent service set up by Government to
improve people’s ability to manage their financial affairs. Our free and
impartial money advice is available online, and by phone or webchat.
1.2. We are responding to this consultation in light of our statutory role working
with the debt advice sector, and our role in improving the financial
capability of the UK.
1.3. Our statutory objectives are set out in the Financial Services Act 2010. In
20121, we were also given responsibilities under statute to improve the
availability, quality and consistency of debt advice across the UK. We are
funded by a statutory levy on the financial services industry, raised by the
Financial Conduct Authority.
1.4. As the statutory body for financial capability, XX has led work with
financial services firms, the third sector, government and regulators to
develop the Financial Capability Strategy for the UK. This 10-year strategy
aims to improve financial capability, giving people the ability, motivation
and opportunity to make the most of their money.
1.5. The Financial Guidance and Claims Bill 2017, to make provision
establishing a new financial guidance body was introduced in the House
of Lords on 22 June 2017.
2. Summary of our response
1 Financial Services Act 2012
http://www.legislation.gov.uk/ukpga/2012/21/contents/enacted
2.1. We are pleased to respond to this consultation and want to use this
opportunity to highlight the importance of targeting debt advice at parents,
especially those who have recently separated.
2.2. We know that single parents, and parents in general, are more likely to be
in debt, and the negative impacts of being over indebted are spread to
their families. We also know that the Child Maintenance Service (CMS) is
uniquely placed to help direct parents into debt advice.
2.3. We have proposed pilots to CMS to look at the best route to get parents
who are struggling financially to debt advice and we strongly encourage
that this work is progressed so that more struggling families can access
help.
2.4. We also wanted to highlight the positive economic impacts to creditors
and to society at large, of providing debt advice to over-indebted people.
We believe the CMS would see similar positive results by introducing debt
advice as an option to parents who may not be engaging.
2.5. We have not responded to the questions in their entirety but have centred
our response expanding on topics in the consultation around:
A request for further ideas on collection and enforcement
3. Responses to consultation questions
Single parents are more likely to be in Debt
3.1. Single parents are more likely to be in debt. Our research2 shows that
amongst single parents, 1.13M are over-indebted, accounting for almost
14% of the over-indebted population.
3.2. The likelihood of single parents being over-indebted rises when they have
larger families, with a third of single parents with three or more children
being over-indebted. This is one-and-a-half times the probability of a two-
parent family with the same number of children being over-indebted.
Drivers of Debt
3.3. The common drivers which push people into problem debt can be due to a
number of factors, including; a) long-term structural problems (insufficient
earnings to cover costs) b) temporary personal economic disturbances,
such as job loss, or a combination of the two3 .
3.4. Our own research4 with our funded partners shows that people who come
to them for debt advice, cite that the trigger for unmanageable debt was a
major life event that reduced their income and/or increased required
expenditure. Job loss (27%) and sickness/disability (18%) were the two
most common reasons mentioned by clients. Relationship breakdown
was the other life event commonly triggering debt problems5 which would
be of salience to single parents- 8.14% of XX funded advice was
provided to people that are in debt due to relationship breakdown
3.5. Another study6 reported that relationship breakdown was a major reason
for a change in the financial circumstances of the families. About half of
the women interviewed in this study were lone parents, who had
experienced a reduced income when they separated from their partner –
either because of having to live on a single wage, or having to leave work
themselves because of their additional caring responsibilities. The
relationship between major life events, debt problems and mental health
issues is complex; with any one potentially triggering the other. Once
established, it appears to be a cycle that can be difficult to break.
3.6. Acknowledging the increased likelihood of, and detrimental impact to
families of parents in financial difficulties, we have identified this group
(especially where they are renting) as one which needs extra support. We
have set out a clear strategic intention within our Debt Commissioning
2
3
.
Strategy for debt advice services to target delivery of advice and support
to target groups, including parents in rented accommodation7.
Ideas on Collection and Enforcement Activity;
Child Maintenance Service uniquely placed to help people
3.7. In addition to collection and enforcement activity, we would encourage
CMS to broaden its options in encouraging people to pay. We recognising
that the Child Maintenance Service is uniquely placed given its direct
interaction with parents and their financial matters, and therefore should
include referrals to help as part of its collections activity.
3.8. We also know that CMS is a trusted body by both sets of parents. As part
of our programme of research8 we trialled attitudes towards several
referral interventions to encouraging people to seek debt advice. We
tested several target groups including parents who have recently
separated/divorced from a partner, and we proposed the idea of referrals
via the CMS to debt advice, for parents who may show signs of financial
difficulty.
3.9. CMS was perceived to have a number of positive attributes which form
the foundation of any successful referral intervention. Most notably the
following features of CMS were most valued by the parents we
interviewed:
Reliable source- People placed a higher value on referrers when they
were perceived to be role models and authority figures who were
respected in the community. It should be noted that referrers were also
trusted organisations, not just individuals.
Intuitive/logical: Financial matters by their very nature can feel abstract
and complex- it is important that the journey into debt advice (as well as
the advice itself) does not isolate the individual further and there is a clear
link between the intervention proposed and how it XXs to debt advice- in
this case, CMS directing individuals to further sources of help to assist
with their payments.
We also had the view expressed by some fathers that public bodies are
inherently biased towards mothers, thus CMS directing financially
struggling fathers to sources of help, instead of punitive measures, can
contribute towards a more positive perception of CMS. Fathers were also
more open to the idea of taking debt help where there was a perception of
fairness.
Work with CMS to date
3.10. We have been in contact with CMS and have initially received positive
feedback on our proposals to design debt advice referrals for parents.
Looking at how CMS operate, we designed and proposed the following
interventions targeting parents at particular points in their journey with.
Our proposed pilots and rationale for targeting these touchpoints are
summarised below:
Pilot
Rationale
CMS arrears
Receiving parents who do not
These parents may fall into financial difficulty if
receive payments referred to debt
they continue not to receive maintenance.
advice when call CMS for help
CMS are currently reviewing the messages
they are given at this point where they are told
to wait for payment.
CMS arrears
Paying parents who fall into arrears Receiving debt advice will help struggling
parents pay their maintenance (due to
referred to debt advice
improvement of financial situation & increased
awareness of the priority of maintenance)
CMS telephony
Telephone referral to debt advice
Referring Child Maintenance Options callers
provider if in financial difficulty
who are struggling, to debt advice may
increase the percentage opting for Family
Based Arrangements
CMS new applicants
Intervention to signpost to debt
Increased engagement with debt advice will
advice.
reduce likelihood of financial difficulty.
Subsequent CMS outcomes will depend on
the target group/ form of intervention
3.11 In addition to CMS’s position as a trusted organisation, we would encourage
CMS to take into consideration behavioural science techniques to route people to
advice in its service design. To that end, we would be willing to help CMS with our
knowledge and experience of working with organisations who work with people on
their financial matters. We have recently released a publication9 on engaging people
with debt advice using behavioural science, and helps organisations working across
a range of channels, including those who have phone-based services, such as the
CMS does.
3.12 We also want to use this opportunity to demonstrate to CMS the value of taking
an approach of routing people to debt advice. We know that debt advice works: debt
advice offers a range of positive outcomes to those struggling with debt or wider
financial difficulties. These include negotiating affordable and effective mechanisms
of repayment with creditors, clearing or at least reducing debts even within a short
period and improving financial capability for clients’ long-term benefits. Outcomes
extend to reductions in stress and sleeping difficulties, improved family relationships
and emotional and mental wellbeing10.
3.13 We recently conducted research11; The Economic Impact of Debt Advice, which
shows that the benefits of debt advice extend to sectors beyond financial services.
This research showed that debt advice has a direct, beneficial social impact on
health through improving the state experienced by those suffering from health
conditions and, in doing so, alleviating part of the service costs incurred by the health
system. The financial benefits of heath improvements associated with receiving debt
advice range from £50 to £93 million per annum. The research also showed that
debt advice is making an indirect contribution to enhanced productivity by helping to
resolve financial distress. The increase in productivity resulting from debt advice is
estimated at £67-£137 million per annum.
3.14 The total social benefits across the UK that can be robustly quantified are
estimated at £301-£568 million annually12. This can be seen as a conservative
estimate, in that there are many impacts of debt advice which this study considers
well-proven but for which there is insufficient evidence to allow the monetary impact
to be quantified robustly.
3.15 In addition to social benefits, this research13 also illustrated benefits to creditors.
Debt advice can help lower debt levels and can therefore improve creditor recovery
rates. This research estimates that taking debt advice reduces costs by at least
£135-237 million and additional creditor recovery of £133-360 million annually across
the UK.
3.16 We are committed to continue working with CMS and have offered our
assistance on their work plans, including assisting them as they look at the client
journey that leads up to non-payment (where CMS have never received a payment
from the paying parent). The expectation is that non-payment is likely to be due to
combination of factors – some of which may be process driven but there is an
expectation that financial difficulties also plays a part.
3.17 We would reiterate the importance of helping parents who are in financial
difficulty and would strongly encourage CMS to use their unique position to help as
many people get debt advice so that ultimately more people and their children are
supported and financially resilient.
---
Wed 07/02/2018
xx Submission to the Department for Work and Pensions Public Consultation on
Child Maintenance: A New Compliance and Arrears Strategy
Introduction
.
XX(XX), represents around 190,000 members in the civil service and XXd agencies,
bodies and contractors.
Within this, XX represents over 51,000 members in the Department for Work and
Pensions (DWP), of which over 5,000 work in the Child Maintenance Group (CMG).
Our members have considerable experience of administering child maintenance and
many also use the services themselves.
This submission on the Public Consultation has been compiled from views gathered
via the Union’s internal advisory structures from our members and reps.
Background
1. The Child Maintenance Service (CMS) 2012 scheme was launched in November
of that year to replace the Child Support Agency (CSA) and, prior to that, the Child
Maintenance Enforcement Commission (CMEC). A phased transition is taking place
and while the majority of child maintenance cases continue on the CSA system, new
applications for child maintenance are processed on the 2012 CMS scheme.
2. In December 2017 the Department for Work and Pensions launched a public
consultation entitled Child Maintenance: A New Compliance and Arrears Strategy
including proposals for Debt write-off of both arrears owed to the Secretary of State
and arrears owed to Receiving Parents and new enforcement powers to recover
outstanding arrears.
3. The strategy is intended to inform decisions on which arrears should be
transferred from legacy systems onto the CMS system for future collection as well as
those on additional collections and enforcement powers for the CMS.
Key Concerns
4. The principle of deciding not to collect historic arrears owed to Receiving Parents
(otherwise termed Parents With Care under the 1993 and 2003 Child Support
schemes) is one which has inherent risks, both to the individual whose lives may be
adversely affected by the impact of being deprived of the funds to which they are
entitled, and to the Department for Work and Pension’s reputation, as in doing so it
will have failed to deliver one of its core services, the collection of child maintenance,
for a significant number of customers.
5. The presumption of agreement, from the Receiving Parent, to write-off arrears
owed has significant risks both to the Receiving Parent, the (current or former)
Qualifying Child, and to the Department’s reputation.
6. The principle of deciding not to collect historic arrears owed to the Secretary of
State is one which risks reputational damage to the Department for Work and
Pension. By failing to recover funds owed to the Secretary of State, which could be
used for funding vital public services at a time when finances are under increasingly
huge pressure, CMS risk the failure to perform one of their key functions.
7. The decision to write-off significant sums of arrears goes against the principle, on
which the CSA was set up and that CMG are still meant to be operating to, that
parents should take responsibility for supporting their children, and this may drive
future non-compliance with Child Maintenance as an individual or societal activity.
8. That careful consideration of the level of any deduction from Benefit or State
Pension is required in order to ensure that no negative impact is caused to the
welfare of the child in the case for which arrears are owed, the Receiving Parent, the
Paying Parent or any member of their respective current households.
9. Careful consideration of increased enforcement powers is required, particularly in
relation to deductions from benefit and recovery of arrears from assets, property and
bank accounts held in joint name, in order to ensure appropriate safeguards are in
place to prevent unintended transfer of child maintenance arrears liability to parties
other than Paying Parents (otherwise termed Non-Resident Parents) under the 1993
and 2003 Child Support schemes.
10. The lack of resources made available for the collection of child maintenance
arrears, should not be used as a justification for the write-off of debt owed, but rather
appropriate funding should be provided in order to ascertain correct arrears balances
and subsequent collection on cases with outstanding arrears.
11. The business case for the Arrears Strategy and CMS’ planning for
implementation are based on assumptions. One key assumption is the number of
Receiving Parents who will make representations for CMS to continue to pursue their
outstanding maintenance arrears. The current assumption – 20% - is based on very
little evidence and is a significant risk to the welfare of thousands of children.
12. A trial is being undertaken regarding this aspect only commenced on 19 January
2018, during consultation period, and results will therefore not be available until after
the close. The assumptions throughout the consultation paper are unsafe and also
demonstrate the lack of preparedness in CMG to make confident and evidence
based decisions on the future arrears strategy. The evaluation of data gathered
during the trial is, in XX' opinion, the minimum pre-requisite to reducing the risk of
these assumptions.
Proposed Compliance measures
13. XX questions the lack of detail provided on the intention to strengthen cross-
Department investigation links with HMRC intended to expose hidden income and
assets. We believe that in order for a coherent view to be formed on the “wider range
of income information”, referred to in paragraph 11 of the consultation paper, that
clarity needs to be provided on what will be available and how this will be factored
into any calculation of either maintenance assessment or debt recovery action; this
should include clarity on which (if any) current tax laws are being scrutinised and
reviewed as part of this process, which currently allow Paying Parents to exploit
loopholes and legally (or semi-legally) divert certain types of income before it is
declared to HMRC.
14. The consultation document refers, in paragraphs 12 and 41, to increased
resource in the Financial Investigations Unit (FIU). This is a welcome proposal as the
work done by the members in this area is central to exposing instances of wilful non-
compliance with collection and enforcement activity. XX believe that the level of
additional resource must be commensurate with the levels of outstanding arrears
and deliberate activity to frustrate collections and enforcement of outstanding
arrears, and that on this basis, there is a need for a significant increase in the level of
resource required in the FIU. It should be noted that recent FIU recruitment was to
replace losses through attrition and therefore did not increase the overall team
resource available.
Handling of arrears built up on Child Support Agency cases
15. XX question the conclusions that the vast majority of arrears is considered
uncollectable. The criteria for determining this assumption is not made clear, nor is
whether this determination has been made with any consideration of the effect of
additional powers proposed by this consultation.
16. It is XX’ view that the criteria for determining the collectability of arrears, should
be explicit prior to any final decision and that this consideration should be made in
light of a presumption of these increased powers proposed being granted and
successful. This measure should also only be applied once a confident arrears
balance has been determined, by bringing the cases up to date, and which can be
worked on by the CMS should it be deemed collectable.
17. XX strongly believe that the most effective use of taxpayers money is to collect
the arrears that is owed for Child Maintenance, both to current and historical Parents
with Care, helping alleviate financial difficulties and increasing spending power which
can only benefit the economy, and to the Secretary of State, which in turn will relieve
some of the burden on the welfare state.
18. Furthermore XX believe that the mass write off of arrears will not serve to
encourage future compliance but instead may in effect promote the view that Child
Maintenance arrears can be successfully avoided if payment is sufficiently delayed.
19. The default position regarding contacting Receiving Parents before write-off, to
ask if they require their Child Maintenance arrears collected, must be that where
there is no response to the request, it should be assumed permission to collect the
arrears has been given. The view that failure to respond automatically leads to write
off has significant risk to the Department and increases the prospect of future
challenge.
20. Consideration should be given to what will happen in the event a Receiving
Parent, did not receive notification, and can prove that it was not their fault (e.g.
hospitalisation, CMS sending notification to an incorrect address, etc.)? Will they
have access to an Appeal against the decision? Will a reversal of the decision be
possible and if so will there be any negative impact on the ability to recover this
money i.e. if the Paying Parent has been advised that the arrears has been written
off or any system or clerical records relating to the case have been destroyed as a
result of the decision?
21. Past experience shows that DWP records, including addresses, may not always
be accurate or up-to-date on Departmental systems. Simply sending two letters 30
days apart to an address which may not be ‘confident’ or current, before deciding to
write-off potentially huge amounts of arrears is, in our view, a significant risk to both
the individuals concerned and to the Department’s reputation.
Improving future compliance
22. XX believe that given the lack of detail regarding the calculation of notional
income and unearned income, forming a view is problematic on this aspect of the
proposals at this stage. Whilst not in opposition to this in principle we are
keen to ensure that both notional and unearned income are taken into account fairly
for all parties, and is based upon a set of clearly defined guidelines to aid
administration of this by our members in CMS.
Deductions from Benefit
23. It is XX’ view that the need to recover outstanding Child Maintenance arrears
from already low rates of benefit needs to be carefully considered and approached
with caution. The wellbeing of both the child and the Receiving Parent must be
critically balanced with the wellbeing of the Paying Parent, and any other
dependents, and that any recover from benefit must be carefully examined in order
to ensure that none of these parties suffer detrimental conditions to their future and
there is no risk of increasing poverty.
24. XX strongly believe that whilst deduction from UC is already in place for those
without earnings at the £8.40 rate, there should be no increase above this level for
UC recipients in receipt of earnings and that in both types of case provision should
be put in place for a reduction where hardship can be demonstrated as a result of
these charges.
25. XX have similar concerns regarding the deduction of arrears from State Pensions
and would wish to ensure that safeguards are put in place to ensure that the level of
collection of any arrears are set at a level which does not have the potential to cause
hardship to either the Paying Parent of anyone within their household.
26. We would advocate provision for a reduction where hardship can be
demonstrated as a result of these charges on State Pension.
Deductions from joint accounts and deductions from business accounts of sole
traders and partnerships without limited liability
27. XX members working in CMS and the legacy schemes have been clear that the
difficulty in securing outstanding arrears from Paying Parents with only a joint
account is a source of frustration for both the Receiving Parents and caseworkers.
Measures would need to be applied however, to ensure that the cost of Child
Maintenance arrears was taken from the Paying Parent’s share of the property and
that the cost was not transferred to the other party or parties jointly owning the
property or assets.
28. We believe that despite the measures outlined in paragraphs 64 to 67, there
remains a significant risk that arrears owed by Paying Parents could be unwittingly or
deliberately transferred to domestic or business partners, and that any legislation or
regulations, would need to preclude this kind of transfer of responsibility for arrears
payment to non-liable parties.
29. Measures to deliver this may include requirement of the Paying Parent to repay
this money to the business or domestic joint account prior to being able to draw upon
funds above a certain level per month.
Call for evidence
30. With regard to potential additional Powers to help recovery of arrears, Charging
Orders and Order for Sale jointly owned properties and assets; currently, if a
property or asset is jointly owned by the Paying Parent and another person, the court
process to secure a Charging Order on the property can be followed, but it will
ultimately be ineffective in forcing the Paying Parent to pay the arrears owed before
the funds from the proceeds of a sale of the property or asset can be released and
the charge lifted.
31. Where the property or asset is solely owned by the Paying Parent, once the
charge is applied on the property or asset, the PP’s solicitor is legally obliged,
subject the proceeds of the sale being sufficient, to make arrangement to pay the
arrears covered by the charge on the property or asset, before releasing any further
balance of funds to the seller.
32. There is currently no such legal obligation on the solicitor where the property or
asset is jointly owned. The solicitor is only legally obliged to notify the owner of the
charge of the impending sale. We believe that remedying this situation so that a
charge can be effectively levied from the Paying Parent’s share of the Property or
Asset would be beneficial in securing outstanding arrears in this situation.
Managing historic CSA arrears
33. XX are concerned at the number of estimates used to draw conclusions on
collection of these historical arrears.
34. We believe that it is incorrect to draw conclusions that simply because a former
Qualifying Child in a case is now an adult, that this should be a reason not to collect
any arrears which were owed to a Receiving Parent for their upbringing. There will
undoubtedly be costs which have been paid by Receiving Parents which have led to
current and ongoing arrears as well as deprivation of funds which they were entitled
to expect.
35. It is our belief that the primary reasons for the amount of uncollected arrears has
been historic and ongoing under resourcing of the CSA, Child Maintenance and
Enforcement Commission (CMEC) and Child Maintenance Group (CMG), combined
with a history of poor IT systems, and questionable policy decisions to impose
unsupported interim maintenance decisions in the past, which have exacerbated the
current arrears position.
36. We believe that the best solution now, is to provide the requisite resource and
sufficiently robust IT, to rectify the situation, not write off billions of pounds of arrears
which otherwise may be collectable for historic Child Maintenance.
Attempted Collection or Write-off
37. XX disagree with the requirement for the confirmation of the request to collect
arrears to be in writing. The CMS accept decisions and notification via email, the
online portal and telephone on a wide range of issues from its clients, during the
administration of cases. Case notes made following calls etc. form the basis of
decision making audit trails in other circumstances, and to restrict the decision
regarding the arrears in this way appears to be an attempt to impose an
unreasonable barrier to the request to collect arrears owed to Receiving Parents.
38. We have concerns that the period for the arrears will not be provided to
Receiving Parents prior to the decision on whether to request collection or not. We
believe that it is unreasonable to expect a decision without possession of the facts of
the case and that failure to provide this may lead to decisions based upon false
assumptions e.g. that the arrears were for a different period and therefore may be for
a lesser amount than the reality of the case.
39. Furthermore we have concerns that the figures for the arrears for cases over 10
years old will not be provided to Receiving Parents prior to the decision on whether
to collect or not. We believe that it is unreasonable to expect a decision to be made
on this basis and that this will result in decisions which may be detrimental to the
individuals concerns.
40. XX believe that there is a risk that once the 1993 and 2003 scheme computer
systems are de-commissioned, there will be reduced availability of critical
information required to identify and calculate arrears owed (such as clerical case
papers), and that the division between arrears owed to the Receiving Parent and
arrears owed to the Secretary of State. This will also impact on any late challenges
due to incorrectly addressed letters.
41. We question the robustness of the retained records, following their transfer over
to CMS, and therefore the ability to account for the correct level of arrears owed on a
case. In order to prevent this we believe that all necessary work required should be
done to bring cases up to date and ensure a confident arrears balance and robust
justification for this prior to any decision being requested on collection or write-off.
Sufficient staff resources should be provided to CMS to ensure that this work is done
prior to the closure of legacy systems.
Potential collections activity
42. XX are concerned with the proposals in paragraph 109 of the paper which
concludes that following checks on the level of arrears and confirmation that the
Receiving Parent requests collection, that should the view be collection appears
unlikely that the arrears will be written-off without agreement by the Receiving
Parent. We believe that this is a very dangerous position and will potentially cause
reputational damage to the Department and even legal challenge.
43. It is our stongly held view that this decision cannot be taken without the
agreement of the Receiving Parent, as the Department would in effect be depriving
them of the prospect of potentially significant sums of money despite their
categorical request for collection.
44. We believe that should such a decision be taken, which we oppose entirely, then
there must be a full Mandatory Reconsideration and Appeal Process available to the
Receiving Parent.
45. Paragraph 111 states that only after decisions have been made on whether the
level of arrears fulfils the minimum requirements for collections, and confirmation
from the Receiving Parent that they require collection, will the arrears balance be
checked. It is our firm view that the checks must be performed prior to the decision
on the level of arrears fulfilling the criteria and the request to confirm collection or
write-off is made.
46. We question the lack of consideration for the welfare of the child in the decision
making process to write-off arrears. XX believe that this should be the primary
consideration in any decision to write-off arrears owed to Receiving Parents.
47. XX do not agree with the restriction of court based action to exceptional cases. If
the intention is to increase and extend compliance and enforcement why then restrict
this to exceptional cases? We further question what types of cases will be
considered exceptional and what criteria will be involved in this decision.
48. Paragraph 112 proposes that where collection activities are exhausted,
remaining arrears will be written off and both clients notified of the decision. XX have
grave concerns that this position could lead to write-off of significant sums of arrears
and that this goes against the principle that Parents should take responsibility for
supporting their children. We believe that this may drive future non-compliance with
Child Maintenance as an individual or societal norm and is something which should
be avoided at all cost.
Writing off debt owed to the Government
49. XX’ view is that part of role of the Child Maintenance Group includes recovery of
arrears owed to the Secretary of State for historic Child Maintenance. It is our view
that to elect to simply write off a potential £1.2 billion of arrears without taking all
reasonable action to clarify the accurate balance and use all available means to
collect them risks a failure to undertaken a core activity.
50. We advocate provision of adequate resource to identify the correct arrears owed
to the Secretary of State on each case before consideration of write-off, and believe
that investment in order to do so is critical in the reaching an informed decision on
what is a reasonable cost for recovery on a case by case basis.
51. We believe that in making this decision consideration must also be given to the
potential for increasing future non-compliance of a mass arrears write-off and for
reputational damage by failing to undertake recover the potential £1.2bn which could
otherwise be re-invested in the Public Sector.
Your views
52. In relation to the questions raised regarding case handling and the degree of
action required, bearing in mind the limited resources available in the CMS; XX
rejects the premise of this question and maintain that it is incumbent upon the
Department, and therefore the Government, to first decide the correct actions which
should be taken to handle the outstanding Child Maintenance arrears. This should
apply to both Receiving Parents and to the Secretary of State debt and then provide
the adequate resources to perform those functions adequately.
53. We believe that in basing decisions upon available resources and deciding
collection activity, based upon the arbitrarily imposed financial restriction is morally
questionable and that this is an abrogation of the responsibility placed upon the
Department to serve the public.
Methodology
54. XX understand that the business case for the Arrears Strategy and CMS’
planning for implementation, are based on a number of untested assumptions. One
key assumption is the number of Receiving Parents who will make representations
for CMS to continue to pursue their outstanding maintenance arrears. The current
assumption – 20% - was based on very little evidence, as explained earlier, and as
such is a risk.
55. A trial is being undertaken regarding this but was only commenced on 19
January 2018, during consultation period, and results will not be available until after
the close. We refer you to our earlier comments in this issue at paragraph 12 of this
response.
---
Tue 06/02/2018
Dear Sir or Madam . Your consultation fails to see the wood for the trees:
With the existence of legal "shared parenting" there is no such thing as a parent who
has "main day -to-day care of the qualifying children" or indeed one who doesn't.
Both parents are equally involved in a child's life and any scheme to transfer money
between the parents should consider both of their financial circumstances.
I would therefore suggest that the vast amount of detail in your consultation be
scrapped, and you start with a clean sheet of paper and think about a system which
reflects the modern legal situation.
----
I don't expect for one minute that you will consider this however, as clearly far too
many people in the government would like to take this country back to the 1950s: a
world where real men went off to do 'breadwinning' and women stayed at home to
cook, clean and look after the children.
This is the current modus operandi for your child maintenance arrangements - which
to my mind breach the Equalities Act (2010).
----
Tue 06/02/2018
1. I am a XX I have been working on child maintenance issues since 2011. I am
responding as an individual. I do not intend to respond in detail but rather
seek to emphasise the context in which this consultation should be set.
2. That context is inappropriate child maintenance calculation legislation which
leads to liabilities which are beyond the reach of many non-resident parents.
These care about their children and want to support them financially as well
as sharing in their lives as much as they can. But the amounts they are asked
to pay leave them without enough for their own basic subsistence. In this
situation arrears are inevitable and enforcement measures inappropriate.
Some parents give up work, others seek to reduce their liability to a more
manageable level. Their ability to maintain a relationship with their children is
often compromised and the children suffer in consequence.
3. Set against that context, I welcome the pragmatic approach to the write-off of
many of the historic arrears. However, the question should be asked as to
why these arrears occurred.
Could it be that the calculation regulations are inappropriate? The liabilities the
regulations give should be measured against the ability of the parents to pay14.
A Freedom of Information Request showed that for the 765,500 non-resident parents
in arrears on the 2003 Scheme in March 2012:
335,100 (44%) were not employed
118,700 (24.9%) were in employment with an annual net income less than
£14,000
Only 3.6% had an annual net income of more than £28,000
4. Set against the unaffordability of assessed liabilities, I speak out firmly against
the proposed new enforcement measures. It is not appropriate to enforce
payments that are unaffordable. Moreover, the proposed measures are
fraught with difficulties and danger.
A Freedom of Information Request showed that for the year April 2013 – March
2014:
for the 67,240 Deduction from Earnings Orders/Requests (DEO/R) issued,
62.1% were unemployed or with a net weekly income less than £300
8,930 Bailiff referrals were made - for the NRPs on the CS2 computer system,
71.3% were unemployed or with a net weekly income less than £300
5. As yet, the CMS Experimental Statistics on the 2012 Scheme provide no
information on either the incomes or weekly liabilities of the paying parent.
Such information is urgently needed so that decisions on policy and legislation
are based on a knowledge of the financial situation of the parents who are
subject to it.
Unaffordability of child maintenance assessments
14 See paragraph 84 – parents ‘simply not having the resources to pay’
6. The unaffordability of child maintenance assessments has long been known
by front line staff in the Child Support Agency (CSA) and the Child
Maintenance Service (CMS), by Citizens Advice, by MPs and by Tribunal
Judges. It was reported on by the CSJ in their 2014 Family Breakdown Report
“Fully Committed? …”15.
7. My evidence to the recent Work and Pensions Select Committee Inquiry into
Child Maintenance16 showed that paying parents on the 2012 Scheme who
were in receipt of Universal Credit gained little, if anything, financially from
being in work. Indeed, effective marginal tax rates could be over 100%,
meaning that they were worse off for every extra £1 that they earned.
8. The problems with legislation can be explained in various ways. Looking
solely at the interaction between Universal Credit and Child Maintenance can
focus attention too narrowly and lead to an underestimate of the scale of the
problem. Many parents not in receipt of benefits find that themselves in
difficulty. Here, I draw attention to the values of the two thresholds that appear
in both the 2003 and 2012 Schemes and how these XX to incomes.
9. The 2003 and 2012 Schemes contain two thresholds. Below the first, the non-
resident parent17 pays just a nominal sum (the ‘flat rate’), above the second
they pay the full amount (the ‘basic rate’) and in between they pay a ‘catch-up’
sum (the ‘reduced rate’). The thresholds were given the values of £100 and
£200 net weekly income in the 1998 Green Paper that set up what became
the 2003 Scheme. The values have not been updated since and, moreover,
have been taken over into the 2012 Scheme.
10. It was intended to introduce the 2003 Scheme in the year 2000. In that year:
£100 corresponded to 30 hours work at the national minimum wage (NMW)
£200 corresponded to 35 hours work at TWICE the NMW
A parent did not pay more than a nominal sum until working almost full-time on
NMW. A parent did not pay the full rate until working full-time with a ‘decent’ wage
From April 2018, for the 2012 Scheme (gross income):
£100 will correspond to less than 13 hours at the national living wage (NLW)
£200 will correspond to 25 ½ hours at the NLW
15 https://www.centreforsocialjustice.org.uk/core/wp-
content/uploads/2016/08/CSJJ2072_Family_Breakdown.pdf
16 https://publications.parliament.uk/pa/cm201617/cmselect/cmworpen/587/587.pdf CHM 0079 and CHM
0098
17 The term ‘non-resident parent’ still appears in legislation. The 2012 Scheme uses ‘paying parent’.
Roughly speaking18, a parent who was expected to pay only a nominal sum in the
year 2000 is now expected to pay the full amount of child maintenance. Set against
this context, it is understandable that many parents cannot afford their assessed
liabilities.
11. Freedom of Information Requests confirm that the majority of non-resident
parents have low incomes. They will find it difficult to make ends meet even
before the payment of child maintenance. However, once again, looking just
at those on low income can focus attention too narrowly and lead to an
underestimate of the scale of the problem. Many others also experience
difficulties, as evidenced in submissions to the Work and Pensions Select
Committee Inquiry19. I quote from CHM0058 and CHM0038.
“I am writing this letter in desperation as I cannot hold out much longer….
Can someone help me out or point me in the right direction because it much be
against human rights or something to have someone who has worked all his life and
looked after his kids for ten years being reduced to eating 14p noodles and having
holes in my shoes, this must be wrong!”
“I was talked out of suicide 2 days ago because of this situation I’m facing
as I see suicide as the only logical way to deal with this! I’ve been in the same job for
17 years and made an enquiry into redundancy unfortunately work said no hence
why suicide became my only other choice.”
These and many more such instances point to the urgent need for a review of the
child maintenance legislation.
12. Finally, here is a story of the dangers of inappropriate enforcement.
“In May this year20 Mr Heseltine of Billingham, Teesside, was ordered to serve a 25-
day prison sentence. He originally owed £5,000 after a liability order was granted
against him in 2007.
He failed to make payments and at court in January 2009 was found guilty of wilful
refusal to pay child maintenance. He was ordered to pay at a rate of £20 a week
and given a 30-day suspended sentence.
But there were further failures to pay despite the suspended sentence hanging over
him. Teesside Magistrates’ Court was told that he still owed just over £3,400 in child
support. Solicitor Paul Dixon, representing Heseltine, said the defendant was out of
work and could not afford to pay £20 a week.
Mr Dixon said: “With the best will in the world he can’t afford to pay £40 a fortnight.””
18 The NMW started at a conservative amount. However, the ‘real living wage’ is considerably higher than
NLW.
19 See footnote 3
20 Evening Gazette, Wednesday, May 30, 2012
Tue 06/02/2018
Encouraging collaboration between parents, and the role of the CMS
If a receiving parent responds to tell us they want us to attempt action on their
arrears, we would perform a number of checks to establish whether there is a
realistic chance of collection
What constitutes a realistic chance of
collection? If its historical isn’t the assumption to be that they will all be
unrealistic?
How realistic will it be to prove what notional income the paying parent has?
How will they know about assets like gold, coins and income derived form
capital or foreign income?
Your Views
Where an asset does not generate an income, a notional income would need
to be determined. In previous schemes of maintenance this was at a set rate
of eight percent of the value of the asset. What notional income should be
assumed?
Why 8%? I would not know where to start to assess notional
income
What is the minimum value of an asset on which the CMS should assume a
notional income?
The minimum value should be £100
Do you agree that these measures strike the right balance between improving
how we calculate maintenance for complex earners, while protecting tax
payers’ money by focusing on only those cases most likely to be affected?
I
think more should be spent on your FIU team to track down not just
complex cases but those who just evade payments
UC is paid monthly so how would the deductions be calculated as
stating £8.40 weekly for no earnings cases will this be £36.40 per month
Your views
Do you think it’s reasonable to extend the facility to make flat rate deductions
of maintenance from UC to those who have earnings? Para 45 deductions
from UC including cases where there are earnings.
I believe affordability
needs to be looked at prior to automatic deductions. If deductions would
force families into further debt then the disposable income must be
given consideration before randomly making UC deductions.
Do you agree deductions for arrears should be aligned with deductions for on-
going maintenance at the equivalent of £8.40 per week?
Yes
Joint accounts, this again could be problematic. There are many people
who have joint accounts with a relative of friend to enable the person to
look after the other person’s financial affairs. Normally in these
circumstances the only money in the account belongs to the party that
needs help with their financial affairs. e.g. son holds a joint bank
account with his mother. Mother’s pension and all her money is held in
this account. Son does not have an income going into this account he is
only named so he can go to the bank and do his mother’s business for
her. In these cases if money was taken from this joint account none of
the money in it is actually the man’s it’s all his mother’s money. Robust
checks must be in place to ensure that no money is taken from a joint
account without establishing ownership. For 2 joint account holders I do
not think a 50% equal split calculation can be attributed without
establishing the facts.
We intend to consider representations for both lump sum and regular
deductions prior to money being removed from an account. We intend to offer
a 28 day and 14 day period respectively in line with our plans for joint
accounts. Is there any reason why we shouldn’t mirror the process for
partnership accounts?
I believe that 28 days is not long enough to give
notice for joint accounts and further consideration should be given to
allow all parties to answer. Therefore I do not agree that this should be
extended to partnership accounts and further time would be required
due to the complexity of these cases.
By leaving a minimum balance in a debtor’s account, DWP needs to strike a
balance between the impact on legitimate business activities and collecting
maintenance owed in an efficient manner. Are there any reasons you consider
we should not follow HMRCs approach of leaving £2000?
It really depends
on the trading of the business. I think there is a risk to this. What if there
are direct debits due from the account and by making a deduction the
account is forced into overdraft, you run the risk of having to pay
compensation to the company re bank charges accrued. I think the level
set needs to take into account the business turnover and this can be
assessed by scrutinising bank statements to see what the “normal “
balance position is on the account.
Your Views
The paying parent is advised to bring their passport with them to the court
hearing, and if they fail to do so we intend to ask the court to order the paying
parent to surrender it to the court within 48 hours (the deadline would be at
the discretion of the court). Is this timescale reasonable?
Yes
Do you think that disqualification of a paying parent’s passport for two years
would be more effective than current alternative actions, such as commitment
to prison or disqualification from driving?
I don’t think it would be more
effective. I think the threat of prison and losing your licence has more
impact. Not all people travel abroad but a higher percentage of the
public do drive and many would feel threatened if a custodial sentence
was a real possibility.
Your views
Bearing in mind we have limited resources which we need to focus on
collecting money for today’s children, what degree of action do you think is
reasonable for historic CSA cases?
I believe that writing off these debts is
the best action. If there has been no activity in the past 3 years then they
should be written off regardless of the amount.
Do you think 60 days is a reasonable period of time to allow representations
regarding write-off, or would a shorter period be appropriate?
Its reasonable
What information do you think should be included in all write-off notification
letters?
The amount of debt is important. I don’t think it is appropriate to
leave this out
Your views
Do you think the proposed thresholds for not offering the opportunity to make
representations, based on age of case and amount of debt provide a
reasonable balance between cost to taxpayers and fairness to receiving
parents?
Yes
Do you think it is reasonable to not send write-off notification letters on cases
with debt balances of £65 and under?
Yes
Thu 08/02/2018
1.
Summary
1.1. This is the XXCouncil Children’s Services response to the Department for
Work and Pensions (DWP) Consultation on ’Child Maintenance: A New
Compliance and Arrears Strategy’.
1.2. We welcome the opportunity to respond to the Government proposals
regarding;
Proposed improvements to child maintenance calculations and new
compliance measures
Proposals for stronger collection and enforcement methods
Proposals to deal with the historic debt that accrued on Child Support Agency
Cases
1.3. There is a substantial cohort of XXchildren and young people whose
households need further financial support, as evidenced by;
The latest available child poverty data shows that 42% of children and young
people in the borough live in poverty. This is remains the highest child poverty
rate in the UK, despite recent falls that have been consistent with the rest of
London.21
As at School Census Day, January 2017: 32.9% of pupils attending state
funded nurseries and primary schools in XXwere eligible for Free School
Meals, 40.6% of pupils attending state funded secondary schools in XXwere
eligible.22
1.4. We welcome the importance the DWP is placing on meeting its financial
obligations in delivering services to client groups, and the stated preference
for the DWP to do this as effectively as possible.
1.5. We are concerned about any changes that might provide an incentive for a
parent in long term arrears of their child maintenance obligations, to wait until
the DWP deems the arrears too costly, or complex, to pursue, and therefore
writes it off.
2.
Consultation Questions
2.1. Improvements to calculations
2.1.1.
Do you agree that the proposed measures strike the right balance
between improving how we calculate maintenance for complex earners,
while protections taxpayers money’ by focusing on only those cases most
likely to be affected?
We agree that ‘complex earners’ have historically been successful in arranging their
financial affairs in such a way as to avoid making child maintenance payments that
are consistent with their actual income. The updated measures to improve how the
DWP calculates maintenance for paying parents will help to ensure children receive
the financial support that they are entitled to.
21 https://www.towerhamlets.gov.uk/Documents/Borough_statistics/Child_Poverty_Briefing_Final.pdf
22 https://www.gov.uk/government/statistics/schools-pupils-and-their-characteristics-january-2017
2.1.2.
Do you think it’s reasonable to extend the facility [to deduct arrears]
to
make flat rate deductions of maintenance from Universal Credit to those
who have earnings?
In general this is reasonable as it is consistent with existing policy to deduct from
paying parents who are either on benefits or those who earn. This also removes the
enforcement fee of £50 when action is taken against a paying parent who is in
arrears.
Paragraphs 50 and 56 particularly emphasise that the DWP will continue to
use this method to collect arrears from paying parents after the maintenance liability
has ended. This measure has the stated aim of sending “a clear message to paying
parents that failing to pay for their children is not an option”. We would ask the DWP
consider whether the deduction rate should remain at £8.40/week after the
maintenance liability has ended, or whether a lower rate of deduction from benefits
should continue after the child turns 20, as this will be paying the arrears rather than
supporting the child.
2.1.3.
Do you think that the disqualification of a paying parent’s passport for
two years would be more effective than current alternative actions, such
as commitment to prison or disqualification from driver?
Yes – however, as noted, the measures are only used in a very insignificant minority
of cases (around 20 as noted at
paragraph 78). Is it correct for the DWP to be
considering deepening their ambit for enforcement when emphasis could instead be
given to widening how applicable it is to paying parents who are refusing to pay?
2.1.4.
Can you think of any powers that we don’t already have that would help
us to increase compliance and recover arrears within difficult groups of
clients?
Yes – The consultation document notes instances were a debt is unenforceable
due to the DWP not being readily able to locate a paying parent who is in arrears
and refusing to pay for their children. Widening the powers of the DWP to relocate
a refusing paying parent, and contact them by electronic means in addition to
written correspondence, may increase the effectiveness of the Department in
moving non-compliant paying parents into compliance.
Thu 08/02/2018
About the XX Child Maintenance Champion Group
This group was formed in 2016 to create a campaign focussed on child
maintenance. It brought together several organisations, XX XX, XX Council, Citizens
Advice and Rights XX, Poverty Alliance and One Parent Families Scotland, all with
the common view that child maintenance, more specifically the rampant non-
payment and failing government system, is something that needs to be challenged.
Poverty Alliance carried out research in XX1 and had an overwhelming number of
respondents with often harrowing experienced of child maintenance.
The research along with the xx campaign was launched in September 2016, and
through partnership working offers advice and support to anyone in XX that is
claiming or wishes to claim child maintenance.
The campaign also aims to raise awareness on the new Child Maintenance System
and challenge the many fees that are designed to deter parents from using it. This
led to xx asking Theresa May at PMQ’s if she plans to scrap the £20 application fee
to access CMS.
XX continues to be involved at many levels in XX and nationally, particularly with
child poverty now a real focus of the Scottish Government and local authorities alike.
Child poverty cannot be tackled without looking at child maintenance, and we will
continue to champion for change on behalf of parents in XX and further afield.
This response is a combined effort of those involved in the group, with regular
meetings held on the matter. Each point of the consultation was discussed, with
observations then integrated into this response.
General Thoughts on the Consultation
When launching a public consultation, particularly when it is by the UK government
and the main point is to wipe out billions of pounds of debt owed to both parents and
the government, we would assume that the aim is to garner as many responses as
possible in order to make informed decisions that fall in line with public feeling.
We feel, however, that the government actually does not want any responses to the
consultation and in fact hopes that no one actually sees it. Why else would such an
important consultation be launched in mid-December on the cusp of the festive
season if it wasn’t intended for it to be missed or forgotten about?
Leaving the dubious date to one side, the launch of the consultation was given
absolutely no publicity; simply slipped out without any fuss. Would this be because it
essentially asks for an opinion on writing off billions of pounds of debt?
In regards to the actual consultation questions it is fair to ask for the public’s views
on the arrears and other aspects such as deductions from joint bank accounts and
business accounts, assets, and suggestions to improve compliance, but we feel that
much more could have been included.
In the background section of the consultation the new CMS is said to be “delivering a
good service for families” because “the current rate of accrual of arrears on CMS is
lower than it was historically on the CSA”. It then goes on to reveal “in the financial
year 2016/17, £110m was due to be paid on CMS collect and pay cases, of which
£56m was collected”, meaning that £54m of arrears were accrued in one year alone.
Another example of the apparent good service for families is “It has encouraged
collaboration within families. Around 30% of those who contacted Child Maintenance
Options during 2016-2017 have a family-based arrangement”. This is in reference to
a government publication that states only about half of the family-based
arrangements are considered “effective and secured”, therefore the true number of
successful family-based arrangements is 17%.
How can any of the above be described as delivering a good service for families?
Who has decided that this is a good service? This should have been a major part of
the consultation. It is so obvious that for the vast majority of cases family-based
arrangement is simply not going to work and for those that embark on using CMS
there’s only a 51% success rate for collect and pay. The numbers just don’t make it
viable for parents who are in poverty to pay £20 to use the system. There is
absolutely no guarantee they will see a penny of it back in the form of child
maintenance payments.
Where is the public consultation on the obvious failing system? Child Maintenance
Consultation Response - February 2018 4
Consultation Response
1)
a. Where an asset does not generate an income, a notional income would need to
be determined. In previous schemes of maintenance this was at a set rate of eight
percent of the value of the asset. What notional income should be assumed?
b. What is the minimum value of an asset on which the CMS should assume a
notional income?
c. Do you agree that these measures strike the right balance between improving how
we calculate maintenance for complex earners, while protecting tax payers’ money
by focusing on only those cases most likely to be affected?
Notional value should be set in line with welfare benefit legislation to avoid confusion
and maintain a fair assessment across government departments. This would prevent
the requirement of changing the level when welfare benefit legislation is changed
and avoid a difference in levels.
As for minimum value, we would suggest £1000, except for vehicles which can be
valued under £3000. The reasoning for this figure derives from Scottish bankruptcy
legislation (Bankruptcy and Debt Advice Scotland Act 2014).
2)
a. Do you think it’s reasonable to extend the facility to make flat rate deductions of
maintenance from UC to those who have earnings?
b. Do you agree deductions for arrears should be aligned with deductions for on-
going maintenance at the equivalent of £8.40 per week?
It is reasonable to extend the facility, especially where a deduction from earnings
was not possible. It should be used as an option for diligence however, and
consideration should be given as to which enforcement action would secure the most
funds and not be a default option due to ease.
This rate would be contradictory to other forms of benefit deductions in place. Other
legislation for priorities such as rent, council tax, fuel debt, and fines is currently:
he personal allowance for a
single client aged 25 or over, rounded up to the nearest five pence; ( currently
equivalent to £3.70pw)
and
It should also be noted that it may not be possible to secure this figure from a UC
claim as the maximum deductions for arrears cannot exceed 40% of the personal
allowance. For parents without Child Maintenance Consultation Response -
February 2018 5
care who are experiencing multiple debt, it may not be possible to secure ongoing
liability as well as the full amount of arrears.
3)
a. We intend to consider representations for both lump sum and regular deductions
prior to money being removed from an account. We intend to offer a 28 day and 14
day period respectively in line with our plans for joint accounts. Is there any reason
why we shouldn’t mirror the process for partnership accounts?
b. By leaving a minimum balance in a debtor’s account, DWP needs to strike a
balance between the impact on legitimate business activities and collecting
maintenance owed in an efficient manner. Are there any reasons you consider we
should not follow HMRCs approach of leaving £2000?
We would suggest incorporating consumer debt diligence powers already in place.
Business assets can be placed at risk which would have a more profound impact
than the current situation. We would not expect this situation to occur immediately
therefore parents without care would have had ample opportunity to address arrears
and seek money advice prior to this diligence impacting on legitimate business
activities.
Also, under Universal Credit legislation, self-employed persons must ensure their
accounts are kept up to date with HMRC before payment can be processed. We
would hope that the introduction of this legislation may have an unintended positive
impact on CMS ability to trace income details for this group.
4)
a. The paying parent is advised to bring their passport with them to the court hearing,
and if they fail to do so we intend to ask the court to order the paying parent to
surrender it to the court within 48 hours (the deadline would be at the discretion of
the court). Is this timescale reasonable?
b. Do you think that disqualification of a paying parent’s passport for two years would
be more effective than current alternative actions, such as commitment to prison or
disqualification from driving?
Any additional mechanisms that have the potential to lead to child maintenance
payment are something that is welcomed. However, when looking at existing powers
to deter non-payment such as driving licence disqualification and commitment to
prison, we cannot see any evidence of these being used, so we would then ask the
question what is the point in bringing in more deterrents if the existing ones are not
being utilised. Child Maintenance Consultation Response - February 2018 6
With all of this in mind we feel that the timescale of surrendering passports to court is
so unimportant in the grand scheme that it does not warrant consideration.
In regards to point b. surely for a non-paying parent the threat of imprisonment is
more alarming than the threat of having a passport disqualified? It is difficult to really
say whether one measure would be more effective than another with absolutely zero
information about how effective current powers are; which would suggest they are
not used.
In addition, if this sanction was imposed it may cause issues when opening a bank
account in order to set up a standing order for payment of maintenance, therefore
causing the non-resident parent to be financially excluded. Also, for those claiming
benefits, securing an income can require the production of a passport or driving
licence. Employers also request this as evidence of right to work in the UK.
A final thought on seizing passports and driving licences, is this really enforceable?
Wouldn’t a solicitor be able to have the seizure immediately reversed? Does the
CMS have an agreement with DVLA or the Home Office to be able to fully implement
the powers without fear of a decision being overturned shortly afterwards?
5)
a. Can you think of any powers that we don’t already have that would help us
increase compliance and recover arrears within these difficult groups?
Adopt the model seen in other countries around Europe where the government
automatically pays the parent with care the rate of child maintenance they are
entitled to, with the state then taking the money from the parent without care. This
would lead to 100% compliance for the parent with care which is of paramount
importance to the future of the child.
We have witnessed a significant number of non-resident parents who fail to
acknowledge this payment is for the children and have significant issues with making
payments to a former partner. This is a highly emotive issue and we feel that placing
the children at the heart of all communication would focus the attention more
effectively. For example, under DWP communication for Children’s Disability Living
Allowance, the written communication is sent to the resident parent but it is clearly
worded that that claim belongs to the child. Making all child maintenance claims in
the name of the child but written ‘care of the parent or guardian’ and paid into the
account of the parent or guardian.
Currently the emphasis is on the parent with care to pursue child maintenance and to
provide information on the parent without care when using CMS which can be a
stressful and often fruitless act. This should instead be done by the government, with
arrears handled in a similar way HMRC recovers debts. Enforcement action is then
between a government department and the parent without care, not with them and
their former partner. Once arrears accumulate, the relationship between the parents
have usually deteriorated to such an extent that family based or flexible
arrangements are no longer possible. Child Maintenance Consultation Response -
February 2018 7
Arrears collection could be brought in line with consumer debt recovery. Serve
charge for payments, bank arrestment, earning arrestment, and sequestration/
bankruptcy in addition to passport and driving licence seizure. This provides scope
for pursuing those parents without care who do not hold a driving licence or passport
and are on low income but have significant assets.
If the parent without care accrues arrears, consider the implementation of an
inhibition* secured against any owned/jointly owned property for the arrears amount
on condition that ongoing maintenance liability is maintained. Once liability for
ongoing has ended, non-resident parent can either continue to make payments to
clear arrears or sell property to make a lump sum payment. This would permit the
non-resident parent to stop the debt spiral and permit them to support ongoing
maintenance while ensuring no further detriment to any other children that may be
living in their current property.
For self-employed/sole traders again we would suggest incorporating consumer debt
diligence powers already in place; business assets can be placed at risk which would
have a more profound impact than the current situation. Also, under Universal Credit
legislation, self-employed persons must ensure their accounts are kept up to date
with HMRC before payment can be processed. We would hope that the introduction
of this legislation may have an unintended positive impact on CMS ability to trace
income details for this group.
In addition to actual powers, the government should be undertaking promotion and
policy work to create a culture that it is not acceptable to simply walk away from a
child and not contribute financially to their upbringing. Paying for a child should not
be seen as an option, and non-payment should not be seen as acceptable; morally
and culturally the government need to do more to change these mind sets.
*an order or writ of prohibition, especially against dealing with a specified piece of
land or property
6)
a. Bearing in mind we have limited resources which we need to focus on collecting
money for today’s children, what degree of action do you think is reasonable for
historic CSA cases?
b. Do you think 60 days is a reasonable period of time to allow representations
regarding write-off, or would a shorter period be appropriate?
c. What information do you think should be included in all write-off notification
letters?
Of course we believe that there should be no automatic write-off of money owed to
families as for those who have lived without child maintenance payments life may
have been a struggle both financially and emotionally, and many will have
experienced poverty as a direct result. Child Maintenance Consultation Response -
February 2018 8
If child maintenance arrears are simply wiped out then that sends a message to the
public that it is ok to not pay child maintenance because if you manage to avoid
paying for long enough then the arrears are simply forgotten about, going against
everything the CMS
should stand for.
However, we recognise that action to pursue debt must be competent. Any parent
without care approaching money advice services disputing amount or liability would
be advised and assisted to challenge liability, an action that would cause further cost
to the public purse and advice agencies alike due to the numbers of households
involved.
Although we consider parents without care should be liable to financially support
their children, in order to ensure ongoing maintenance payments are affordable and
more likely to be maintained we would consider it may be beneficial to draw a line
under the previous scheme failings. In doing so we would expect a
drastic increase
in the enforcement action that can be taken under the new scheme and actual
evidence of enforcement action taking place.
The level of unpaid arrears that is suggested to be effectively ‘written off’ due to the
catastrophic CSA can only be described as a failure to a generation of children, but
for the current and future generations to receive a more robust service this may be
necessary and a more efficient system of addressing the issue.
We believe the government’s undeniable failure that has caused thousands of
families to face poverty deserves a very public apology. We also believe that this
should be part of a larger campaign to change the prevalent cultural acceptance of
non-payment of child maintenance.
In regards to point b. 60 - 90 days is reasonable, and for point c. the information
should be clear and easy to understand and include exactly how much is owed to the
person and the government’s proposal for wiping the debt out. People have a right to
know what they are owed and have the right to use this information to challenge the
system that has failed them and left them out of pocket.
7)
a. Do you think the proposed thresholds for not offering the opportunity to make
representations, based on age of case and amount of debt provide a reasonable
balance between cost to taxpayers and fairness to receiving parents?
b. Do you think it is reasonable to not send write-off notification letters on cases with
debt balances of £65 and under?
For point a. we fail to see the correlation between wiping out arrears and ‘fairness to
receiving parents’. This proposal means that a parent who has £999 of child
maintenance still legally owed to them will never see a penny of it, whilst the parent
without care has a debt of £999 vanish into thin air. We find it hard to understand
how the government deems this as fair. Child Maintenance Consultation Response -
February 2018 9
In regards to point b. we feel that this is a question included simply to garner positive
responses. Why the figure of £65 or less? Is it hoped that this is the magical figure
the public thinks is acceptable to not even tell people about? We would suggest it is
so all respondents agree which will then be used to say ‘we got a lot of agreement
on the consultation’.
On the flip side if the answer is no, all cases should be chased, the respondent
would be accused of backing measures that would waste tax payer money. Even
including a term such as ‘cost to taxpayers’ in a consultation question is an
underhanded way to sway responses to be more agreeable, and dismiss responses
that do not fit in with the proposals.
Contact Details
This response was by the XX Child Maintenance Champion Group, a collection of
organisations that campaign for change on many aspects of child maintenance.
---
Thu 08/02/2018
Views on Notional Income
Where an asset does not generate an income, a notional income would need to be
determined. In previous schemes of maintenance this was at a set rate of eight
percent of the value of the asset. What notional income should be assumed?
What is the minimum value of an asset on which the CMS should assume a
notional income?
Do you agree that these measures strike the right balance between improving how
we calculate maintenance for complex earners, while protecting tax payers’ money
by focusing on only those cases most likely to be affected?
The 2003 scheme had been grossly unfair to the paying parent. This was probably
as a consequence of previous cases in the decades before (and not necessarily
involving the current contributors) seeking fool proof methods to evade maintenance
payments. The excessive contribution based on an unrealistic projected yield
resulted in erosion of wealth of the paying parent with even no consideration or
assessment of the personal wealth and circumstances of the receiving parent.
Rather than just set a notional figure, there must also be some consideration of how
the receiving parent may not use excessive payments for its’ genuine purpose ie day
to day living costs and not asset accumulation or personal expenditure.
Also there needs to be an assessment of complex earner’s contact conditions. Often,
their partner or someone XXd may need to supervise contact. Hence, there should
an assessment of loss of earnings from the paying parent’s household to cover
contact costs.
The CPI rate should be used to calculate any notional income and no contrived
figure picked from thin air (as what appeared to be the case previously).
The current system appears to be at breaking point already as is self-evident given
the delay in processing variations. Tax payers’ money would only be better spent by
the use of online support and chatroom facilities used elsewhere. Where possible, an
active approach from the receiving parent to share care of the children with the
receiving parent should be rewarded – rather than one where they continue to be
motivated for the payments received for having the children for MORE nights per
year. Where there are complex earners, there will often be complex contact
conditions permitted to reduce and devalue contact time with non-resident “paying”
parents.
---
Thu 08/02/2018
Introduction
The xx is the professional body for over XXXXX solicitors. With our overarching
objective of leading legal excellence, we strive to excel and to be a world-class
professional body, understanding and serving the needs of our members and the
public. We set and uphold standards to ensure the provision of excellent legal
services and ensure the public can have confidence xx solicitor profession.
We have a statutory duty to work in the public interest, a duty which we are strongly
committed to achieving through our work to promote a strong, varied and effective
solicitor profession working in the interests of the public and protecting and
promoting the rule of law. We seek to influence the creation of a fairer and more just
society through our active engagement with the Scottish and United Kingdom
Governments, Parliaments, wider stakeholders and our membership.
The Society’s xx welcomes the opportunity to consider and respond to the
Department of Work & Pensions’ consultation: Child Maintenance: A New
Compliance and Arrears Strategy. The Sub-committee has the following comments
to put forward for consideration.
General comments
We welcome the objectives listed at paragraph 2 of the consultation document,
including the objective of "addressing the historic arrears which are built up under the
CSA". However, we have concerns over the manner in which this matter is to be
addressed.
Under the heading
Encouraging Collaboration there is a reference to Child
Maintenance Options (CMO) which is described as a "free service that provides
information and signposts to specialist support". Unfortunately, the information
provided is too often inadequate. The service fails to provide information about
variations, which is one of the most important aspects of the system. If the staff at
CMO were to refer the public to specialist advice in cases where a variation could be
appropriate, then the parties who would prefer to reach their own agreements in the
light of a notional CMS calculation could be more confident when trying to do so. The
answering announcement on the CMO telephone promises the service will provide
"information and guidance on all aspects of child maintenance". This is inaccurate
and that matter should be addressed urgently. It is accepted that an agreement
made between the parties is more satisfactory than a calculation imposed from
without. Unfortunately these agreements are susceptible to cancellation after only 12
months, and section 9(4) of the Child Support Act 1991 prohibits contracting out of
the statutory system for any longer than that. Although it would not represent a
complete answer to the problem, we suggest that the 12 month rule should be
extended to 48 months and that the rule against private enforcement of historic
arrears should be abolished.
At present the parent with care (PWC) is not able to enforce the child support liability
herself. They must rely on the Child Support Agency (CSA) and Child Maintenance
Service (CMS) to do the job for them. If this fails then they are left without a remedy.
The prohibition on enforcement by the PWC should be removed, at least for those
cases in which CMS proposes to write off arrears. If the DWP considers that a
particular sum is irrecoverable, then it should be remembered that under article 1,
protocol 1 of ECHR the money belongs not to the Secretary of State but to the PWC.
They should not be deprived of the opportunity to recover it herself. They are the
one, after all, who has suffered from its non-collection.
At the time of the consultation on the 2012 system we recommended that the 12-
month rule should be extended to 36 or to 48 months so that realistic and useful
agreements could be entered into between parties, each of whom would be able to
rely on the terms of the agreement.23 At present many useful agreements are not
signed due to the prospect of the alimentary part of any such agreement being
removed after only one year. We repeat our suggestion that the period of time
excluding the jurisdiction of the Secretary of State should be extended. This would
encourage parties to reach their own agreements – something which we understand
is a policy goal.
Consultation Questions
Where an asset does not generate an income, a notional income would need to
be determined. In previous schemes of maintenance this was at a set rate of
23 National Audit Office Value for Money Study on the Administration of Child Maintenance, The Law Society of Scotland’s Response,
September 2011
eight percent of the value of the asset. What notional income should be
assumed?
The deemed rate of 8% per annum may have been justifiable in 1993 but became
wholly unfair towards the end of the 2003 system. That could happen with any fixed
rate. We suggest that a deemed income of 2% above base rate would be fair. That
would give a reasonable estimate of income across the board and would prevent a
non-resident parent (NRP) from effectively diverting income by deliberating failing to
exploit, on the child's behalf, a capital asset with an income potential. We would
exclude the paying parent's actual home and would allow exceptions along the lines
of the original regulation 18 of the Variations Regulations 2000 for assets which
could not reasonably be sold or exploited.
Regulation 20 of the same regulations was another one of the very useful Additional
Cases Regulations in the pre-2012 system. If an NRP's lifestyle was plainly higher
than could be afforded on his declared income then that in itself could allow a
variation. This was difficult to apply sometimes but it did allow for justice to be done
in many cases. Anecdotally, we understand that a very high proportion of regulation
20 applications met with refusal at CSA level, but the Tribunals were keener to be
creative in applying the law. A return to this provision could help CMS and Tribunals
to do justice without having to bend the letter of the remaining regulations by
referring to the NRP's apparent expenditure in the course of a challenge to the
veracity of the HMRC figure.
What is the minimum value of an asset on which the CMS should assume a
notional income?
We consider that a minimum value of £65,000 would be a reasonable sum. There
seems to be no good reason why a qualifying child should not share in such income.
We suggest that paragraph 52 of the consultation should be reconsidered in that
light.
Do you agree that these measures strike the right balance between improving
how we calculate maintenance for complex earners, while protecting tax
payers’ money by focusing on only those cases most likely to be affected?
We have no comment on this question.
Do you think it’s reasonable to extend the facility to make flat rate deductions
of maintenance from UC to those who have earnings?
We have no comment on this question.
Do you agree deductions for arrears should be aligned with deductions for on-
going maintenance at the equivalent of £8.40 per week?
We have no comment on this question.
We intend to consider representations for both lump sum and regular
deductions prior to money being removed from an account. We intend to offer
a 28 day and 14 day period respectively in line with our plans for joint
accounts. Is there any reason why we shouldn’t mirror the process for
partnership accounts?
DWP proposes to extend powers to deduct maintenance from accounts held jointly.
The principle is a good one but could cause injustice. For example, if an NRP had
re-partnered with the mother of another qualifying child, CMS could find itself using
its expensive enforcement machinery to remove maintenance received (into a joint
account), by one PWC, putting it into the account of another PWC. The strengthened
Financial Investigation Unit (FIU) may have to investigate complex cases in which
there is a dispute about the two derivation funds in a joint account. The wise NRP
will of course ensure that none of his partner's income goes into such a joint account.
By leaving a minimum balance in a debtor’s account, DWP needs to strike a
balance between the impact on legitimate business activities and collecting
maintenance owed in an efficient manner. Are there any reasons you consider
we should not follow HMRCs approach of leaving £2000?
We cannot support the proposal to allow deductions orders from partnership
accounts. Business structures can be complicated if there is more than one partner
and it is not necessarily straightforward to establish which funds should properly be
assigned to which partner. The effect on small businesses of having a deduction
order on its working funds could be disastrous. There may well be some cases in
which it is clear how the account should be attributed and in which the business will
not be seriously wounded by such a deduction. However, this will not be so in every
case, and expertise would be required in order to make these judgements. This risk
is referred to in paragraph 70 but the proposal to allow representations is an
inadequate safeguard. The notional figure of £2,000 as a threshold does not solve
the problem.
The paying parent is advised to bring their passport with them to the court
hearing, and if they fail to do so we intend to ask the court to order the paying
parent to surrender it to the court within 48 hours (the deadline would be at the
discretion of the court). Is this timescale reasonable?
We have no comment on this question.
Do you think that disqualification of a paying parent’s passport for two years
would be more effective than current alternative actions, such as commitment
to prison or disqualification from driving?
We do not consider that many non-residents parents who defy the statutory systems
at the risk of imprisonment or the loss of a driving licence will be pressured into
compliance by a threat to remove a passport.
Can you think of any powers that we don’t already have that would help us
increase compliance and recover arrears within these difficult groups?
Experience tells us that compliance could be increased if there were a greater
confidence that maintenance liabilities were being correctly calculated. Too
frequently we meet clients who have tried over lengthy periods to persuade
CSA/CMS to look properly at the relevant facts of cases. It would be useful to know
the percentage of mandatory reconsideration requests which are refused and the
percentage of first tier Tribunal decisions made which are in favour of the appellant.
Apart from that, compliance would surely be enhanced if the powers which already
exist were to be used. As stated above, we do not consider that many non-residents
parents who defy the statutory systems at the risk of imprisonment or the loss of a
driving licence will be pressured into compliance by a threat to remove a passport.
The power under section 32L has been in place since the Child Maintenance and
Other Payments Act 2008 but has almost never been used. The wealthier or self-
employed NRP will often seek to avoid or to minimise liability by transferring assets.
Section 32L is designed to reverse such tactics but CSA/CMS have seemed to be
unaware of its very existence. This remains an issue even after the abolition of the
assets variation in Regulation 18 of the Variations Regulations 2000 because the
asset concerned could well be income producing.
Although we welcome the greater resources to be given to the FIU, investigation is
only part of the answer. The statutory system should be more willing to use
information produced by the FIU to ensure payment. Actual use of section 32L,
amongst other remedies could have a beneficial therapeutic effect.
Bearing in mind we have limited resources which we need to focus on
collecting money for today’s children, what degree of action do you think is
reasonable for historic CSA cases?
The proposals to write off historic arrears are not acceptable. It would appear from
the consultation that a PWC who is owed £400 under the 2003 rules will not be
entitled to insist on the recovery of that money. It should be remembered that the
statutory system has prohibited her from seeking that aliment from the NRP directly
and has prohibited her from enforcing the calculated debt. It is accepted that the
enforcement of a debt of £14.92 which has been outstanding since 2004 would not
be a justifiable use of public funds. Nevertheless, the system proposed in the
consultation is too unambitious, and fails to do justice to those PWCs who were told
that they could not take action themselves to recover money when the case and the
liability was fresh. There is no guarantee that CSA/CMS still have the correct
addresses for all of these PWCs. If the addresses are not up to date then there will
be no request for enforcement. The proposals do not represent an honest way of
reducing the uncollected arrears which have built up due to the failures of the
statutory system.
Do you think 60 days is a reasonable period of time to allow representations
regarding write-off, or would a shorter period be appropriate?
We have no comment on this question.
What information do you think should be included in all write-off notification
letters?
We have no comment on this question.
Do you think the proposed thresholds for not offering the opportunity to make
representations, based on age of case and amount of debt provide a
reasonable balance between cost to taxpayers and fairness to receiving
parents?
We have no comment on this question.
Do you think it is reasonable to not send write-off notification letters on cases
with debt balances of £65 and under?
We have no comment on this question.
----
Thu 08/02/2018
1. This is the response on behalf of thexx. The
Overview
2. The XX broadly welcomes the DWP’s review, the objectives and some of the
proposed suggested method changes for enforcement.
3. The XX agrees that changes to the current methods of enforcement and
scope are essential and require urgent attention for the following reasons:
3.1.
Previous regulation changes which removed the “assets based”
assessment on variation applications brought with them significant unintended
consequences in a significant number of cases (see discussion below);
3.2.
The need for speedy access to enforcement processes against
recalcitrant non payers of maintenance remains an essential goal and in many
respects continues to elude the Child Maintenance Service. Any enforcement
tools which strike a fair balance between the rights of the payer and the payee
whilst having in sharp focus the welfare of the child, are to be encouraged and
welcomed;
3.3.
Whilst greater simplicity was needed in the calculation process from
the first iterations under the CSA procedures, that has come at the expense
of some children in more difficult income cases. The CMS service must be
able to better deal with the more complex income cases OR it must be able to
isolate quickly those cases which require a more bespoke consideration and
investigation (by trained staff in the FIU). Perhaps, we suggest, there should
be an early filter of those less straightforward cases by the Service and they
should follow a different path of analysis/investigation.
4. The XX particularly welcomes further improvement to the assessment of
maintenance for paying parents who have a complex income. In the XX’s view
it is important that a CMS calculation factors in actual unearned income from
the outset of any calculation process. Such unearned income should be
declared on the paying parent’s tax return alongside earned income, and it
ought to be an easy step to build this into the initial maintenance calculation,
without waiting to be “advised about possible unearned income at the point of
the application”. Alternatively disclosure of such income should be front and
centre of the application/response to application process. It should be a
mandatory requirement of disclosure over and above the HMRC disclosure.
Questions where views are sought
Where an asset does not generate an income, a notional income would need to be
determined. In previous schemes of maintenance this was at a set rate of eight
percent of the value of the asset. What notional income should be assumed? (page
12 of 27)
5. Specific views are sought on the proposal to attribute a notional income to an
asset where that asset does not generate an actual income. The consultation
paper highlights “coins and gold”, but perhaps a more common occurrence
would be a second home or property which is not rented out. We assume the
view being sought here is: what level of notional gross income should be
attributed to an asset? This sum would then be aggregated with the paying
party’s actual income for the purpose of the maintenance calculation.
6. In the XX’s view it would be useful to adopt the rates of return in the method
of calculation adopted in financial remedy order applications in the Family
Court known as
Duxbury calculations. This method of calculation was devised
and approved in 1984 in
Duxbury v Duxbury (Note) [1992] Fam 62, and
subsequently monitored by the Duxbury Working Party (consisting of a
forensic accountant, a government actuary, and IT specialist and leading
family law practitioners). The aim of the calculation is to suggest a capital sum
which will (a) generate a specified index linked income over a period of years
and (b) be exhausted at the end of the period.
7. The XX suggests the adoption of a key assumption in the
Duxbury calculation
of
a combined actual gross rate of performance of 6.75% per annum (i.e.
an income yield of 3% per annum24 and a capital growth rate of 3.75% per
annum). This is a more conservative rate of performance than the 8% per
annum mooted in the consultation paper, but has been judicially approved
(e.g.
JL v SL (No 3) [2015] 2 FLR 1220) and is used extensively in the Family
Court. It is regarded not as a rule but as a tool and a useful one which
balances the interests of both parties, actuarially.
What is the minimum value of an asset on which the CMS should assume a notional
income? (page 13 of 27)
8. We would suggest a threshold of £25,000. Although we accept this is
somewhat arbitrary, the sum is high enough to avoid the disproportionate
identification of too many individual assets, but would allow a receiving party’s
maintenance to be augmented, even if by a modest sum, by the taking into
account of free non-income generating assets held by the paying parent.
Do you agree that these measures strike the right balance between improving how
we calculate maintenance for complex earners, while protecting tax payers’ money
by focusing on only those cases most likely to be affected? (page 13 of 27).
9. The XX has been concerned that the regime the of child maintenance
introduced by the Child Maintenance and other Payments Act 2008 (which
came into full force in November 2013) removed the “assets” ground for a
variation. This allowed a paying party to order their affairs so that they were
living off capital. We respectfully refer the DWP to the clear views expressed
by Mr Justice Mostyn in
Green v Adams [2017] 4 WLR 140 when faced with
the difficulty directly:-
“22. Finally, I am constrained to mention an extraordinary state of affairs arising from
recent amendments to the child support legislation. The tribunal appeals which I
have mentioned were in relation to assessments made under the second regime
which was introduced by the Child Support, Pensions and Social Security Act 2000.
Under that regime there was, as explained above, a facility to seek variation on the
grounds that the non-resident parent had "assets". That regime was replaced by the
third regime provided for by the Child Maintenance and Other Payments Act 2008.
That third regime has been in full force since 26 November 2013. This case was
transferred into that regime on 10 October 2015. For reasons which I cannot fathom
the "assets" ground of variation has been removed from this latest regime.
Therefore, it is possible, as in this case, for a father to live on his capital, which may
be very substantial indeed, and to pay no child support at all. The father was only
required to pay the pitiful minimum sum of £7 a week from the early part of this year
24
In fact in 2009 the Duxbury Working Group, recommended, in response to the economic downturn, that in
year 1 in any Duxbury calculation income yield be reduced to 1.5% rising to 3% per annum for year 2 onwards
but this seems unduly intricate for the purpose of calculating child maintenance.
because it was then that he received his state pension. In my opinion the
government needs to consider urgently the reinstatement of the "assets" ground of
variation.”
And at
25. The assets ground of variation reposed on the statute-book, to my knowledge,
quite unremarkably for over ten years, and was in fact successfully deployed in this
case (as I described in my principal judgment). To empower a fact finder to
determine if arrangements have been made to place assets in non-income-
producing structures would not, on any view, be prohibitively expensive and time-
consuming; but even if it were relatively expensive and time-consuming, why as a
matter of justice should the exercise not be carried out?
10. With great respect to the judge, we fully agree.
11. The XX accepts the measures proposed in the consultation paper go some
way to improving the calculation of maintenance for complex earners. But it
appears to us that thus far the
voice of the receiving party under these
measures only extends to making
representations to the department’s
Financial Investigations Unit. Those representations may or may not be acted
upon. We consider it important for a receiving parent to retain the right to seek
an
independent adjudication where they contend the paying party has so
ordered his or her affairs so as to have (a) built up capital and (b) be living off
that capital and therefore (c) justifying an upward variation.
12. At the moment the CMS regulations are themselves being used as a device to
avoid proper payment of maintenance. That is an unintended consequences
which as Mr Justice Mostyn clearly stated, cannot be allowed to stand.
Changes in deductions from benefits
Do you think it’s reasonable to extend the facility to make flat rate deductions of
maintenance from UC to those who have earnings? (page 15 of 27)
13. Yes; we see no reason, as a matter of logic, to confine the deduction of a
maximum “flat rate” of £8.40 per week from the paying party’s UC payment
only where they have no additional earnings. As the consultation paper points
out, a person is able to receive UC and be in receipt of earned income. In
those circumstances, there should be the ability to deduct the same £8.40 flat
rate from the paying parent’s UC.
Do you agree deductions for arrears should be aligned with deductions for ongoing
maintenance at the equivalent of £8.40 per week? (page 15 of 27)
14. Yes. A recipient of UC is ordinarily in a financially precarious position. The XX
supports the use of a flat rate sum, above which there should be no further
deduction in UC benefit. Insofar as the paying parent has allowed arrears to
accumulate, then the arrears should also be recovered at the same flat rate.
15. The XX recognises that these are difficult cases though where all parties are
likely to be economically vulnerable and care is required even with the
application of a flat rate scheme not to impact the non-resident parents
benefits to such an extent that it may impact upon their own ability to care
for/spend time with the subject child.
16. The policy consideration and social welfare consequences of this part of the
consultation are not areas upon which the XX would seek to further comment.
Deductions for joint accounts & business accounts of sole traders and
partnerships without limited liability
17. We note the consultation proposes to extend both lump sum and regular
deduction orders to both sole trader and partnership accounts. We
respectfully agree with the need to
message that maintenance payments
cannot be avoided (para 62).
18. We agree that where a paying parent is a sole trader, the existing powers
against the paying parent’s bank account should be extended to “sole trader”
bank accounts. We take this to mean a bank account in the name of a trading
name, but whose funds legally and beneficially belong to the paying parent
and not the funds which are held in a limited liability company’s bank account.
19. We also cautiously support the extension of the orders to partnership
accounts but with some reservations. A partnership is either formed orally (a
partnership at will) or by deed:-
19.1.
A trading partnership will often have ongoing financial commitments
with trade creditors, suppliers and the providers of commercial finance. We
understand from the consultation papers, that in advance of an application for
an interim lump sum deduction order (“LSDO”), an appraisal of the
partnership bank statements will be undertaken by the DWP/FIU where
“
business assets would be identified and excluded”, it is not clear to us by
what criteria an asset would be excluded on the basis that it was a “business
asset”. The subsequent application for LSDO would cause the partnership
bank account to be immediately frozen in the sum of the arrears. Only after
the account has been frozen would representations be invited from the
partners. While we recognise that to give notice of the prospect of an interim
LSDO creates a likelihood that funds may be moved by the non-paying
parent, we are concerned about the adverse commercial consequences of a
trading account being frozen for a long period while the one or more partners
must make representations and/or appeal to have the account unfrozen. We
do not think LSDOs should be obtained in respect of a partnership bank
account
without giving the partners an opportunity to making representations
before it is made. To do otherwise might risk the very business of the
partnership and therefore its income. There would be the plain risk of throwing
the baby out with bath water.
19.2.
Very often a partnership deed contains specific provisions allocating
underlying partnership assets to one or other partners in unequal shares
(partnership assets can include cash in a bank account). If cash has
accumulated in a partnership account, it may well belong wholly or in large
part beneficially for a partner who is not the non-paying parent. It will be
important that notice of an application for deduction order is given to all the
partners and the process of giving notice must extend beyond simply serving
the single address of the partnership with written notice of the proposed
application.
19.3.
That said, we agree that where funds are being sheltered in
partnerships and maintenance is not being appropriately paid, those funds
should not be immune from proper investigation.
We intend to consider representations for both lump sum and regular deductions
prior to money being removed from an account. We intend to offer a 28 day and 14
day period respectively in line with our plans for joint accounts. Is there any reason
why we shouldn’t mirror the process for partnership accounts? (page 17 of 27).
20. We have no particular comments on the time limits suggested.
By leaving a minimum balance in a debtor’s account, DWP needs to strike a balance
between the impact on legitimate business activities and collecting maintenance
owed in an efficient manner. Are there any reasons you consider we should not
follow HMRCs approach of leaving £2000? (page 17 of 27)
21. The appropriateness of the minimum balance figure of £2,000 is extremely
hard to gauge in respect of a trading partnership. Where that partnership has
a large turnover it is very unlikely that a minimum balance figure of £2,000 will
be sufficient to preserve the viability of the partners’ ongoing trade. Some
care will be needed if a figure is to be flat, whatever the business.
Removing passports
22. We note that it is proposed to implement an existing power contained in the
Child Maintenance and Other Payments Act 2008 to disqualify a non-paying
parent from holding a UK passport. We cautiously support this step. We
consider the threat of the removal of non-paying parent may prove particularly
effective in those cases a parent who leads a lavish lifestyle including
frequent trips abroad but discloses no or limited assets or income. Now that it
is no longer possible to seek a variation of an assessment on the grounds of
“lifestyle inconsistent” with income, the threat of removal of a passport and
consequent restriction of overseas travel may prove a real and effective tool
to secure compliance.
23. However, the balance of human rights considerations cannot be
underestimated when the removal of such an important document from an
individual as the courts have made clear. 25
“
The removal of an individual’s passport, even on a temporary basis, be that of an
adult or child, is a very significant incursion into the individual’s freedom and
personal autonomy. It is never an order that can be made lightly.”
The paying parent is advised to bring their passport with them to the court hearing,
and if they fail to do so we intend to ask the court to order the paying parent to
surrender it to the court within 48 hours (the deadline would be at the discretion of
the court). Is this timescale reasonable?
24. No particular comment.
Do you think that disqualification of a paying parent’s passport for two years would
be more effective than current alternative actions, such as commitment to prison or
disqualification from driving? (page 19 of 27)
25. We think this depends on each case. Each measure may have a role.
Standard of proof
26. We note that the consultation paper proposes simply to add the option of
passport disqualification to “our existing sanctions” of commitment to prison
and disqualification from holding or obtaining a driving license. As we
understand it, under the Child Support Act 1991 (as amended), a child
maintenance debtor may be committed to prison
or disqualified from driving.
The disqualification is sought as an alternative to an order for imprisonment
on a single application. The Court must be satisfied that there has been
“
willful refusal or culpable neglect [to pay what is due]”. The statute does not
specify the burden of proof, but it has been accepted in the Court of Appeal
that in such cases the standard of proof is the criminal standard not the civil
standard of the balance of probabilities (
Karoonian v CMEC [2013] 1 FLR
1121). The use of the criminal standard of proof would understandably
increase the difficult to obtain such orders.
27. We suggest that one alternative would be that such applications for
disqualification of either a driving license or a passport are de-linked from
committal applications. They can then be sought on a free-standing basis and
the civil standard of proof can be applied (see discussion at paragraphs
12.104 to 12.122 in the Law Commission’s Report
Enforcement of Family
Financial Orders (Law Com No 370)).
Can you think of any powers that we don’t already have that would help us increase
compliance and recover arrears within these difficult groups?
28. In those complex income cases where the preponderance of evidence from
lifestyle suggests substantial non-earned income and/or extensive capital
assets, one radical proposal would be to consider at an early stage referring
them to the court process and uncouple them from the CMS scheme
altogether. Rather than investigate the matter to the point of seeing whether a
maximum assessment is justified, the court with its wider reach and powers
and the ability to draw proper inferences from the evidence, could be invited
to make the assessment of actual available income and of proper
maintenance.
29. Such a decision would not be made lightly and once made by an officer, the
parties could have a single right of appeal before the matter is referred to the
court.
30. There would be issues concerning court application fees to be considered but
we suggest that many of the more complex income/capital cases would be
dealt with more swiftly using the court’s discretionary powers rather than
through the CMS. The CMS could in the same way then concentrate on the
less complex cases it is designed to deal with. It is not thought that the
impact upon the Family Court would be significant as the overall number of
cases referred is likely to be small. The
transfer would in the first instance be
allocated to a district judge, the magistrates court would not be appropriate
given the level of complexity.
---
Thu 08/02/2018
The CMS should not under any circumstances have any additional powers because:
a) the answer to failure to collect maintenance is not more powers but to improve
competence, and
b) they cannot exercise the existing powers they have responsibly, so giving the
CMS more powers will simply allow them to continue to make errors in calculation of
maintenance.
These proposals will mean that the CMS will continue to make errors in calculation,
then use the powers to take money that is not owed regardless of any appeal. This
will impoverish fathers who do not owe, or who do not owe what is claimed,
undermine the lives of children who depend on those fathers and further entrench
inequity.
The CMS frequently does not calculate maintenance correctly and refuses to change
those over-calculations when challenged. More powers will give them no incentive to
calculate properly, knowing that they have no need to do so and can simply remove
money from parents by force, regardless of the accuracy or otherwise of any
calculation. They abuse the powers they have, for example by ignoring court orders.
Giving an abuser of powers more powers to abuse can only make matters far worse.
This will result in more appeals, more tribunals and court cases and end up costing
far more than it gains, and will not solve the core problem, which is ineptitude and
inefficiency by the CMS. If you want to solve a problem then you deal with the cause
of the problem, not address yourself to something tangential to it.
Efforts and public money should be put in to reforming the CMS so that it works
properly, works as intended and is free from the ineptitude and abuse that
characterise it at present, not in giving it more powers. This will inevitably lead to a
further undermining of family life, place further strain on already fractured
relationships and cause even more harm to the children than they already endure.
Given the track record and current behaviour of the CMS, awarding more powers is
a terrible idea whose implementation will only cause damage and harm. These
proposals undermine the rule of law and the processes of justice, as they empower
clerical workers to make arbitrary decisions unchecked, and then enforce them
unchecked and with little or no accountability or scrutiny. Decisions such as this
should be the preserve of properly trained judges, not minor civil servants. Existing
legislation is sufficient to allow the CMS to do its job.
Thu 08/02/2018
1. XX is the national charity working for and with single parent families. We
campaign against poverty, disadvantage and stigma to promote fair and equal
treatment and opportunity for single parents and their families.
2. XX is committed to improving the support given to separating parents, and was
a founding member of the xx coalition along withxx, the xxInstitute andxx. It is a
longstanding goal of the organisation to help to achieve an effective UK child
maintenance system, to mitigate the financial disadvantage faced by children
growing up in separated households. 3. This consultation response represents the
views of XX, based on the feedback and experiences of single parents seeking child
maintenance, frontline experiences of staff advising single parents and analysis by
the organisation’s policy and research team.
Summary
4. This draft strategy has welcome proposals, but lacks strategic intent. In particular,
there
is little detail on what has been learnt since the 2012-2017 strategy and any
revisions or new approaches taken. As a result, there is a risk that there will not be
the step-change in enforcement and compliance action needed to ensure a zero-
tolerance culture to nonpayment.
the use of Direct Pay as a means of encouraging ‘collaboration’ and ‘compliance’.
– including removal of passports – are welcome but,
to
achieve real impact, the DWP must ensure the more rigorous use of existing powers
and review the interface between Direct Pay and Collect and Pay, to ensure swift
enforcement action.
look again at tools to change behaviour and encourage a ‘paying culture’ – avoiding
alienating paying parents and preventing non-compliance.
inks with parental support to pilot genuinely
supportive programmes for separating couples, to encourage child maintenance
payment and a ‘paying culture’. New compliance measures
5. In agreeing the detail of the new measures, XX encourages further
consultation with financial experts and tribunal members, to learn from lessons under
previous schemes.
Child maintenance: a new compliance and arrears strategy
8 February 2018 2
6. New powers – particularly a return to an assets variation – must be accompanied
by an overhaul to DWP communication with receiving parents regarding their options
to
challenge maintenance calculations and ensure timely arrears
collection/enforcement
action.
7. While the DWP is drawing a line under the ‘lifestyle variation’, XX maintains
there is still value in revisiting and reviewing how this worked in the past, rather than
dismissing it out of hand.
8. XX wishes to see unearned taxable income taken into account as part of the
standard calculation based on HMRC data, to avoid placing the burden on receiving
parents to know about and report this income.
9. More information on the effectiveness and role of the FIU is needed to continue to
refine
and target action appropriately, rather than risk parents missing out on more
effective
investigation at a tribunal (ie appeal).
10. While consistency in the CMS approach to deductions from benefits is welcome,
the DWP should also commit to reviewing how the CS3 calculation for low income
paying parents in particular once the CMS is in steady state.
11. Deductions from joint and business accounts should be accompanied by a
commitment to targeted resource with the sufficient expertise to enforce these
actions.
Arrears write-off
12. Despite limited resources, the DWP must recognise and take responsibility for its
past failings by putting more resource into avenues of redress for parents with
arrears-only cases under the CSA (eg compensation and court access).
13. Parents going through the write-off process for arrears-only cases require full
information in letters and adequate time to take advice and consider their options.
14. All parents should receive a letter, regardless of whether they meet thresholds
for potential collection by the DWP – in recognition of the CSA’s failings and the
apology owed to parents.
Further improving compliance
CM calculations and new compliance improvement measures
Where an asset does not generate an income, a notional income would need to be
determined. In previous schemes of maintenance this was at a set rate of eight per
cent of the value of the asset. What notional income should be assumed?
15. Under previous statutory child maintenance schemes, the statutory rate of
interest was assumed for a notional income from underused assets. However, it is
important for the credibility and fairness of any return to this power that a realistic
rate of return is assumed, to ensure payments are feasible. XX recommends
consultation with financial experts and tribunal members under the previous
schemes on what a fair rate of return or set of notional income rules would be – for
example, whether there should be scope to accommodate changing market
conditions or to recognise genuinely low-earning assets.
Child maintenance: a new compliance and arrears strategy
8 February 2018 3
What is the minimum value of an asset on which the CMS should assume a notional
income?
16. The rationale for the previous £65,000 threshold was unclear; if using a similar
approach, the threshold should be uprated given the intervening years. Again,
consistency with any relevant broader accounting or financial processes and
consultation with financial experts and tribunal members would be valuable.
Do you agree that these measures strike the right balance between improving how
we
calculate maintenance for complex earners, while protecting taxpayers’ money by
focusing on only those cases most likely to be affected?
Including underused assets
17. XX has long argued for the retention of the ‘assets variation’, which is one
important way to address paying parents who retain the full capital value of an asset
or assets for themselves, while depriving their child(ren) of current financial support.
While we acknowledge that this does not provide a solution to all cases where child
maintenance is avoided, it is one of a number of important tools which can be
effective. XX therefore welcomes the move to bringing notional income from assets
into
child maintenance assessments.
18. XX is aware that valuing underused assets is not necessarily straightforward.
The DWP and CMS must ensure these cases have timely access to the right
financial expertise needed to finalise necessary assessments of asset values. We
suggest reviewing referral processes based on evidence under previous statutory
schemes as well as the new CMS and expanded Financial Investigation Unit (FIU),
to
identify more efficient ways to deal with these cases (for example, bringing in
financial
experts (eg forensic accountants) who might typically sit on tribunal panels).
19. Alongside these changes, we urge the new arrears and compliance strategy to
outline a
clear commitment to overhauling DWP communication with parents dealing with the
CMS. XX hears from countless examples of receiving parents via its helpline
and policy research where parents are simply left in the dark regarding the options
available to them to challenge a maintenance calculation (XX, 2017). These
reforms should be a prompt for action to strengthen and streamline the way the CMS
shares and explains the process of getting maintenance to parents, to ensure a fairer
and more consistent service (see para 51).
Including unearned income
20. It is a promising move to allow unearned income held by the HMRC to be
included in an
initial CMS calculation. However, XX believes this still does not go far enough.
We continue to call for the standard calculation itself to be changed, so that any
unearned income reported to HMRC is automatically included in calculations. It is far
from clear in the draft strategy as to why this approach will not be taken. The
decision
may be the department’s way of “protecting taxpayers’ money”, but little evidence is
given as to why this strikes a fair balance between cost efficiency for the state and
effective maintenance arrangements for children.
21. Without embedding unearned income into the standard calculation process, the
CMS
will continue to place a disproportionate bonus on the receiving parent to ensure
their
child receives a fair maintenance payment (XX, 2017). Without a significant
Child maintenance: a new compliance and arrears strategy
8 February 2018 4
change in process, the onus will remain on the receiving parent to a) know about the
possibility of including unearned income in a maintenance calculation, b) know
whether
paying parents have such resource and c) report such income.
22. Should the proposal go ahead as planned, much more transparency is needed
on how
the DWP intends to “amend the information” the CMS gives receiving parents when
making an application. Currently, despite the CMS claiming that information is
available,
many single parents report that they are simply not told what other income can be
included and how to challenge a calculation. Clarity and consistency in the
calculation process (and variations more widely) is urgently needed, including:
unearned income information for a CMS calculation, including:
An
agreed set of questions to ask all receiving parents at application about paying
parents’ other possible income that could be included (rather than waiting for
receiving parents to volunteer information on these income sources)
An
agreed and realistic threshold for requesting unearned income data from
HMRC, to avoid receiving parents being asked for ‘evidence’ of such income
despite not being in a position to obtain the necessary records or documents (as is
still reported under the current system)
guidance for receiving parents (including on application forms) on
what
other income can be included in an initial calculation (so all parents receive the same
information).
‘Lifestyle’ variation
23. It is clear from the draft strategy that the DWP wishes to draw a line under the
‘lifestyle’ variation available under the previous scheme, whereby receiving parents
could request a variation to their calculation based on a disparity between a paying
parent’s lifestyle and their reported income on which their maintenance payment is
based.
24. Even so, XX reiterates that in our experience, parents can find the lifestyle
variation is a useful ‘foot in the door’ for paying parents’ finances to be properly
scrutinised, even if a calculation ended up being adjusted on different grounds. Far
from being “proved ineffective” as the draft strategy states, receiving parents
reported success in getting a fairer maintenance calculation as a result. Receiving
parents
understandably do not necessarily have a detailed knowledge of their ex-partner’s
finances, particularly if some time has lapsed since separating. Signs of a paying
parent’s lifestyle, however, are more readily accessible.
25. It is clear from the department’s move to consider notional income from assets
that it
acknowledges that relying solely on the HMRC to determine maintenance leaves
many
children unfairly treated under the CMS. Even if cases of suspected child
maintenance
avoidance involve tax evasion, bringing them more clearly within the remit of the
HMRC,
the HMRC itself acknowledges that these cases do not necessarily rank highly in
their
list of evasion investigations (XX, 2016). XX argues it is therefore a
mistake not to reconsider a wider array of tools to complement the reliance on
HMRC
data to assess a paying parent’s ability to pay. Reintroducing the assets variation
alone
is unlikely to be enough and may not be accessible for some receiving parents (eg
where assets do not meet the relevant threshold).
Child maintenance: a new compliance and arrears strategy
8 February 2018 5
26. XX calls for a more transparent consultation with financial experts and
tribunal members on the effectiveness of the lifestyle variation and whether the
previous iteration under the CSA could be improved, before rejecting outright a
return to
this policy.
Expanding the FIU
27. XX cautiously welcomes a move to increase FIU staff numbers – we have
called for proper resourcing of enforcement and investigation into child maintenance
compliance, and this is a potential step forward.
28. However, far more public information is needed on the effectiveness of the FIU to
judge whether simply increasing staff numbers is a sufficient development. XX
would like to see information and guidance published on:
ce evaluation based on this remit, to identify where gaps remain in
interrogating paying parents’ finances.
29. XXd to improving performance, the latest data suggests ‘complex earner’
investigations tend to take anywhere between three and nine months to resolve
(DWP,
2017). The DWP should commit to unpicking this data further to identify ‘what works’
for
FIU referrals, to better segment and manage cases – for example, identifying which
cases are most likely to succeed at the FIU level and which cases are likely to need
investigation at a tribunal level.
30. More clarity is also needed regarding how the parallel processes of a referral to
the
FIU and a request for a variation will work together in practice. For example, a
lengthy
FIU case with no clear outcome may delay an appeal, or a request for a variation
may
not be made before a case is referred to the FIU which risks delaying the date to
when
any revised calculation is backdated (via an appeal). Guidance is needed on how
best
to ensure a receiving parent is not disadvantaged by these additional processes.
Changes to deductions from benefits
31. These changes in principle bring more consistency and strengthen maintenance
collection. However, we would argue these changes should not be delayed until
Universal Credit (UC) is fully rolled out, given the changing population of Universal
Credit claimants does not affect the policy – particularly as roll-out has been a
movable
feast, and is some years away (the latest estimate is March 2022).
32. Furthermore, changes to deductions from benefits should not happen in isolation.
XX recommends the DWP commits to review how the new CS3 calculation
used in the 2012 scheme is working for low-income paying parents. While CSA
cases are still being closed, it is likely to be premature to assess the impact of the
calculation fully; however, it is feasible that case closure will be complete within the
timescales of this new strategy (timescales have not been provided).
Do you think it’s reasonable to extend the facility to make flat rate deductions of
maintenance from UC to those who have earnings?
33. Where a paying parent is liable for the flat rate of child maintenance, it seems
reasonable to extend flat rate deductions from those receiving UC while earning. It is
fair
Child maintenance: a new compliance and arrears strategy
8 February 2018 6
to take an approach consistent with paying parents receiving other state support (or
who
do not have earnings and receive UC), and move away from inappropriate or
unaffordable enforcement activity (eg Deduction from Earnings Orders (DEOs)).
34. However, it is questionable as to whether this change will “encourage personal
responsibility” by having the option to avoid collection fees through Direct Pay
arrangements. There is little evidence in the evaluation of charges to date that the
imposition of collection charges has this effect already non-compliant paying parents.
Do you agree deductions for arrears should be aligned with deductions for ongoing
maintenance at the equivalent of £8.40 per week?
35. If a paying parent has been liable for a flat rate deduction from benefits and
liability ends
with arrears still on a case, it would be consistent to maintain this deduction to collect
arrears (notwithstanding any assessment of how the flat rate works for low income
paying parents; see para 21).
36. Given the general drive for consistency and simplicity, and if an £8.40 a week
deduction
is deemed affordable for new cases, the intention to use the same deduction rate for
CSA arrears transferred to the 2012 scheme seems sensible (despite the additional
£1.40 on top of the flat rate reflecting collection fees).
37. The draft strategy states that a “maximum a paying parent would pay from their
benefit
would be £8.40”. It is not clear whether the intention is to allow deductions from
benefits
for arrears collection to vary from the current minimum of £1.20 a week up to a
maximum of £8.40 a week. Where a parent has already had flat rate deductions, it
seems sensible to continue collecting at this rate as the default position. The DWP
rightly intends to send a clear message that failing to pay “is not an option”.
However,
where arrears deductions are less than the maximum, the reasons should be
explained
to both receiving and paying parents, with an option to review the rate of collection to
avoid either prolonged or unaffordable payments.
Deductions from joint and business accounts
We intend to consider representations for both lump sum and regular deductions
prior to
money being removed from an account. We intend to offer a 28 day and 14 day
period
respectively in line with our plans for joint accounts. Is there any reason why we
shouldn’t
mirror the process for partnership accounts?
By leaving a minimum balance in a debtor’s account, DWP needs to strike a balance
between the impact on legitimate business activities and collecting maintenance
owed in an
efficient manner. Are there any reasons you consider we should not follow HMRCs
approach
of leaving £2,000?
38. From XX’s perspective, consistency is the best approach unless there are
clear reasons for the contrary – whether between account types liable for
deductions, or
with the HMRC’s approach on minimum account balances.
39. XX’s main concern is that these deductions are likely to be complex and must
be resourced properly. We welcome the move from the DWP to extend the use of
Deduction Orders to joint accounts – in particular, DOs can be a crucial tool in
tackling
non-compliance among those parents for whom Deductions from Earnings Orders
prove
ineffective (eg parents who are self-employed, work cash in hand, change jobs
Child maintenance: a new compliance and arrears strategy
8 February 2018 7
frequently or who have income but not employment). That said, as we noted in our
consultation response at the time, identifying income and tracing available resources
for
debt collection requires financial expertise and dedicated staff time.
40. As noted above, the expanded FIU could prove a valuable resource; however, its
remit
is currently unclear, nor is the estimated capacity needed to utilise DOs against joint
accounts effectively. We call on the DWP to clarify what additional capacity and
expertise will be available to embed these new powers – without this, the new tool
risks being undermined from the start, and dismissed as ‘ineffective’ without proper
application.
Removing passports
The paying parent is advised to bring their passport with them to the court hearing,
and if
they fail to do so we intend to ask the court to order the paying parent to surrender it
to the
court within 48 hours (the deadline would be at the discretion of the court). Is this
timescale
reasonable?
Do you think that disqualification of a paying parent’s passport for two years would
be more
effective than current alternative actions, such as commitment to prison or
disqualification
from driving?
41. It is very difficult to judge whether disqualification of passports will be any more
or less
effective than similar alternatives. Given the very small numbers involved currently –
and forecast (the accompanying methodology suggests just one passport
disqualification is expected a year) – it is likely to need in-depth qualitative work to
understand the relative effectiveness of these actions. The DWP suggests that this is
likely to be an effective preventative measure – however, it is not clear what
evidence
there is for this, or whether there is a more nuanced understanding of how these
tools
are both communicated and applied with and to paying parents (see paras 37-39).
42. Adding this option to the CMS tools to tackle non-compliance is again welcome,
and
could provide a useful alternative where other options cannot be used in practice (for
example, not being able to disqualify a paying parent from driving when a car is
needed
for employment purposes). However, introducing these powers is unlikely to bring a
step-change in enforcement that is needed to stem the rising CMS arrears (see para
35)
– particularly if the CMS is unwilling to use them. XX would like to see
increased readiness from the CMS to use the full range of its powers and a
concerted
effort regarding broad and targeted communication to embed a ‘zero tolerance’
culture
around non-payment of child maintenance (see paras 37-39).
Improving compliance
Can you think of any powers that we don’t already have that would help us increase
compliance and recover arrears within these difficult groups?
Strengthening enforcement for non-compliant cases
43. For determined non-payers, tackling compliance will still be challenging, even
with the
powers planned to be introduced with this strategy. The draft plan is light on detail in
terms of the DWP’s strategic intent regarding non-compliance, or any changes,
developments or lessons learnt since the last 2012-17 strategy (DWP, 2013).
Tackling
Child maintenance: a new compliance and arrears strategy
8 February 2018 8
non-compliance is not solely a matter of introducing new powers – it is also about
how
non-compliant cases are prioritised, managed and prevented.
44. The DWP’s evaluation research (2016) made it evident that a significant share of
Direct
Pay arrangements either never start or become ineffective – around half of Direct
Pay
arrangements surveyed again were in this position after three and 13 months. The
DWP, in response to the Work and Pensions committee inquiry, did acknowledge
that
more work was needed to understand this issue (Work and Pensions Committee,
2017)
– however, results from further surveys is not due until 2019. XX’s evidence
suggests that collection charges could play a part in dissuading parents from
requesting
their case be moved onto Collect and Pay (XX, 2016). Receiving parents also
report CMS advisers can be slow to take action once parents do report non-
payment.
Managing this interface between Direct Pay and Collect and Pay is of critical
importance to ensure maintenance keeps flowing in the reformed statutory system,
yet
the draft strategy remains silent on this issue.
“After 5 months of non-payment my ex was sent a letter to this effect [explaining the
case would be moved onto Collect and Pay].”
“My ex-partner just ignored the letters; it was six months before they even did
anything”
CMS feedback survey, 2016-2017
45. XXd to this, it is still not evident how willing the CMS is to use its existing
enforcement powers. It is difficult to glean enforcement activity from current quarterly
statistics. New enforcement figures have been included in the latest release, but
obviously XX to a much smaller caseload than under the CSA and are not directly
comparable given the different structure of the system and different measures used
(quarterly vs. annual statistics, for example). How ever, feedback from single parents
themselves – particularly those who have moved over from the CSA and have
experience of the previous system – suggests that there are continued problems with
a
lack of proactive use of existing powers (XX, 2016).
46. XX would have hoped a new arrears and compliance strategy would seek to
set out a refreshed and more robust approach to compliance in the new statutory
system. Notably, while the draft strategy outlines an approach for managing CSA
arrears-only cases, there is nothing of note that suggests any renewed approach to
manage arrears under the CMS. This is particularly concerning given the National
Audit
Office’s recent warning on rising CMS arrears (NAO, 2017). This oversight raises
concerns that debt will still be seen as an ‘add-on’ rather than an integral part of the
statutory child maintenance service. As a result, the DWP risks repeating mistakes of
the past – as a panel of debt collection experts previously found, “arrears collection
could be described as extracurricular to the…every day activity” of the statutory
service
(DWP, 2011).
47. In particular, XX would like to see:
Operational
performance indicators (eg an arrears collection target) – while it is
evident that the DWP wishes to maintain its focus on ensuring current
maintenance is paid, it cannot ignore that arrears are yet again a reality of
statutory arrangements; it must be possible to set a proportionate goal to
Child maintenance: a new compliance and arrears strategy
8 February 2018 9
strengthen performance, without detracting resources from other strategic
objectives
A
regular and timely public assessment of the non-compliant CMS caseload and
the collectability of arrears held on the CMS system – at the aggregate level for
public reporting (currently, data is spread between quarterly overall figures and
NAO Client Fund figures with a long time lag), and for receiving parents on an
annual basis
Consistent
thresholds for taking action on unpaid maintenance – to manage
expectations and ensure fair treatment across cases; receiving parents report
varying advice from the CMS (eg one parent was told her arrears had to reach
£500 before any action was taken (CMS feedback survey 2016/2017), while a
helpline caller in December 2017 was told it would have to be at least a year
before action was taken on her arrears of £1,700).
new arrears and compliance strategy, including:
Strengthen
debt enforcement expertise – for example, learning from the example
of introducing the FIU and financial expertise to tackle avoidance, the DWP can
ensure a dedicated enforcement team embeds the most effective and latest debt
collection techniques
Refreshed
management information – the lack of detailed performance and
behavioural management data was previously found to hinder the statutory
service’s ability to manage non-compliance (DWP, 2011); the DWP should review
whether reforms have addressed these gaps and strengthen its data accordingly
More
effective use of existing powers – for example, strengthening Deduction from
Earnings Orders to ensure these do not break down as easily (eg by paying
parents switching jobs) through closer data sharing with HMRC (eg through
National Insurance or tax codes), and ensuring more rigorous use of liability
orders and referrals to credit reference agencies.
Changing behaviours
48. XXd to any refreshed CMS arrears strategy, there is a case for broader changes
to
the DWP’s approach to compliance. Paying parents have reported how a perceived
judgemental tone from DWP staff can encourage non-compliance in itself – research
with self-employed paying parents suggested this can undermine the legitimacy of
the
statutory system or encourage parents to “fight back” through non-payment (DWP,
2015). A ‘one note’ approach to communication is therefore unlikely to engender the
collaborative relationships the new CMS is intended to encourage, or to encourage
compliance.
49. While the DWP has taken steps to update its letters and communication in recent
years,
there is little in the draft strategy which suggests either this has made improvements
or
whether there is work still to be done. The current approach seems a far cry in its
ambition from the previous intention of the Child Maintenance and Enforcement
Commission (CMEC) to “change attitudes and behaviours across society so that
payment of child maintenance becomes the norm” (CMEC, 2011). While XX
has called for the effective and proper use of the full range of enforcement action at
the
Child maintenance: a new compliance and arrears strategy
8 February 2018 10
DWP’s disposal, we also believe this should be partnered with an interest in
changing
behaviours to prevent non-payment in the first place.
50. It is difficult to comment on how much further the DWP can go, as there have
been
some attempts to look at behavioural change around maintenance payments in the
past
(eg trials in 2013/2014), but results are not readily accessible. Nevertheless, there is
scope for further action; for example, the DWP can:
courage
compliance
change tool – for example, testing reduced charges for paying parents if they pay
their first Collect and Pay payment in full and on time
-to-face work with groups where this is deemed most
appropriate
(eg determined non-payers)
– which the strategy
implies should help to encourage family-based arrangements – on targeted
mediation
or similar support (eg debt or money management) for separating couples, to test
ways to encourage and normalise child maintenance payment.
Managing historic CSA arrears
Bearing in mind we have limited resources which we need to focus on collecting
money for
today’s children, what degree of action do you think is reasonable for historic CSA
cases?
51. It is positive to get a clear strategy on arrears-only CSA cases finally, and
welcome the
department’s response to criticisms from XX and the Work and Pensions
Committee on the lack of certainty for these cases. However, it is disappointing, if
not
surprising, that the DWP will write off a large proportion of arrears owed by parents.
While the draft strategy points out that some of these children are now in their 20s,
this
underestimates the difference child maintenance can continue to make for young
adults
(eg a chance for further/higher education) and ignores the longer term repercussions
of
missed child maintenance payments (eg debts, poor housing).
52. The DWP must ensure its compensation scheme is adequately resourced to deal
with
claims as a result of the write-off of CSA arrears. Temporary additional resource – in
the
past, a ‘special claims unit’ has been suggested – should be made available to
review
and process any resulting claims should be introduced for the period of this process.
53. The DWP could also grant receiving parents with arrears-only cases access to
the
courts, should they wish to take enforcement proceedings where the DWP fails to
pursue debt collection – ensuring there is some fall-back should the statutory service
fail
to provide the necessary enforcement action.
54. It is clear that the above measures would involve some additional spending.
However,
the department must also take responsibility for its own dramatic past failings and
therefore bear some of this cost. If the DWP is to walk away from these cases, it
must
do so in as fair and just a way as possible. Given the years of financial difficulties
and
emotional and mental fatigue resulting from receiving parents’ fight to get money
Child maintenance: a new compliance and arrears strategy
8 February 2018 11
collected for their children, providing more robust redress seems to be a better
balance
– even given limited resources – than proposed in the draft strategy.
Do you think 60 days is a reasonable period of time to allow representations
regarding writeoff,
or would a shorter period be appropriate?
55. A minimum of 60 days should be provided to allow representations regarding
write-off of
CSA arrears. The DWP allowed six months for parents to respond to their CSA
cases
closing; 60 days should be the minimum that receiving parents have to consider their
options properly regarding outstanding arrears. Given the potential for delays in
receiving letters (eg going to the wrong address), reviewing content and getting
independent advice – particularly in the context of increasing limitations on available
advice services – parents need adequate time to respond.
What information do you think should be included in all write-off notification letters?
56. XX would like to see further information included as standard in write-off
notification letters to receiving parents:
riod of accrual, with appropriate caveats to
emphasise
any estimated figures – it is unreasonable to expect receiving parents to make
decisions on the outcome of their arrears with no indication as to what this amount is
likely to be; this basic information should be provided succinctly in one place,
regardless of information provided in other letters
-only case is transferred to the
CMS –
including what action is realistically likely to be taken under the CMS (particularly
given the focus on ‘children now’), to manage expectations
collection activity or not – for example, details of the DWP compensation scheme
(particularly if at least some debt is due to CSA failings; see para 41) or access to
the
courts (see para 42).
Cases where we will not offer the chance to make representations
Do you think the proposed thresholds for not offering the opportunity to make
representations, based on age of case and amount of debt provide a reasonable
balance
between cost to taxpayers and fairness to receiving parents?
57. It is frustrating, though not unexpected, to have a cash threshold to determine on
which
arrears further action will be allowed – proportionately, low income receiving parents
will
be worst served by this approach. XX recognises the difficulty in drawing this
line but, as a result, would expect all parents to receive write-off letters (see para
47).
Do you think it is reasonable to not send write-off notification letters on cases debt
balances
of £65 and under?
58. If this is the ‘final line’ on past failings, XX firmly believes that all parents are
owed an apology and should receive a letter to confirm the end of their case and the
potential write-off of their arrears.
Child maintenance: a new compliance and arrears strategy
8 February 2018 12
Other comments
59. This strategy is a chance to start afresh under a new child maintenance system;
the
draft document as it stands seems limited in its strategic vision, as noted above. Not
least, there is no timescale for this strategy (the previous strategy covered 2012-
2017),
providing no milestone for reviewing the DWP’s approach to arrears and compliance
again in the future.
Transparency
60. Alongside the measures for further accountability and transparency above (see
paras 11
and 36), XX would like to see a more dedicated approach to communicating
with receiving parents on arrears collection. This would encourage more client
confidence in, and provide clear records of, how the CMS prioritises enforcement.
This
could take the form of an annual statement, including:
the
case to recover maintenance, and its outcome
ke to recover the arrears in question arrears and
the
expected timescale
temporarily and the reasons why
ion or if they
disagree.
Charges and Direct Pay
61. XX is disappointed to see Direct Pay continues to be held up as a more
‘collaborative’ approach to child maintenance arrangements, particularly given the
clear
question marks regarding the effectiveness of Direct Pay arrangements (see para
33).
62. The strategy also makes little mention of Collect and Pay charges, despite an
explicit
intention that these would act as a behavioural nudge to ensure compliance. There
must
be an assessment of what role these charges play, if any, regarding compliance. The
evidence cited in the government’s response to the Work and Pensions Committee
is
limited at best. While survey data shows charges are a factor in sticking with a Direct
Pay arrangement, they are one of a number of factors. There is by no means
evidence
that Collect and Pay charges are a proportionate reflection of these motivation. At
the
very least, the DWP could consider how to use limits on charges to encourage
compliance (see para 39). XX continues to argue that collection charges
should be stopped for receiving parents (who are charged for a paying parent’s
failure to
pay) and at least reviewed for paying parents.
Culture change
63. Finally, if the DWP is revisiting the link between parental support and child
maintenance,
XX would welcome more explicit proposals to this effect. The DWP initially
intended Help and Support for Separated Families (HSSF) funding to have explicit
goals
to increase child maintenance paid to children – this was quietly abandoned and
none of
the pilots included notable content on encouraging child maintenance payment. This
Child maintenance: a new compliance and arrears strategy
8 February 2018 13
draft strategy seems, in noting the government’s new funding to tackle parental
conflict,
to reignite the ambition or aspiration for parental support to have some knock-on
impact
on child maintenance arrangements. However, it risks repeating the same mistakes
as
the HSSF programme by omitting any direct work in this area of either wishful
thinking
or words not backed by action. DWP should provide proper clarity over the role it
intends parental support to have with regard to child maintenance objectives and, if it
intends to have some impact, put proper resource to piloting ways to help separating
families manage and mediate arrangements (see para 39).
Thu 08/02/2018 2
It appears that the consultation attempts to round up good and bad payers of
maintenance.
For example, why should someone who has kept up to payments and has no arrears
is tarred with the same brush ? I fear that the DWP has only considered one side's
view. Perhaps supported by so called charities with the wrong interests i.e. Not one
which wants to assess and see whether payments are being spent on the children ?
The assets which a paying parent holds have always been subjected to grossly
maltreatment by the DWP.
How an earth can such assets yield consistently a yield of 8% ?
Most savings or other assets may well be investigated by a FIU. However, there
should be no pie in the sky notional rate that should EVER be used to calculate any
payments on assets. If the assets aren't yielding anything, then that's because they
are probably far more secure and safe. If the DWP set such a ridiculous rate, then
that could lead to paying parents reluctantly risking where to "gamble" their wealth.
They should only pay on what they actually receive. Otherwise, the system and the
government may well itself end up in Court regarding claims on grounds of
discrimination on grounds against one gender.
The receiving parent should also be scrutinised on how they use the money that they
may receive from the FIU perhaps using random percentage checks or at the
request of the paying parent.
There needs to be far more accountability about how maintenance is spent
Thu 08/02/2018
XX is the UK’s leading relationship support charity, serving more than one million
people every year through information, support and counselling services delivered to
individuals, couples and families. Our vision is a future in which healthy relationships
are actively promoted as the basis of a thriving society. We aim to develop and
support healthy relationships by:
•
Delivering inclusive, high-quality services that are relevant at every stage of
life
•
Helping couples, families and individuals to make relationships work better
•
Helping both the public and policy makers improve their understanding of
relationships and what makes them flourish.
Based on our 80 years’ expertise as the UK’s leading relationships charity, we are
submitting a response to this consultation.
We restrict our response to brief comments on broad areas where we have expertise
– namely, on inter-parental conflict, rather than on the mechanics of the Child
Maintenance Service in terms of compliance and collection of arrears.
XX welcomes the stated objective of the new Compliance and Arrears Strategy to
“continue to encourage parents to collaborate over their child maintenance
arrangements where possible, as this is in the best interests of their children” and the
recognition that the evidence indicates that good quality relationships between
parents are linked to positive outcomes for children.
The evidence shows that children growing up with parents who have low parental
conflict – whether together or separated – enjoy better physical and mental health,
better emotional wellbeing, higher academic attainment, and a lower likelihood of
engaging in risky behaviours.
High levels of conflict between parents can have a negative impact on children’s
long-term mental health and future life chances. Children who witness severe and
ongoing parental conflict can have:
•
Mental health problems, including:
o
‘Externalising problems’ (such as behavioural difficulties, antisocial behaviour,
conduct disorder)
o
‘Internalising problems’ (such as low self-esteem, depression and anxiety)
•
Academic problems
•
Physical health problems
•
Social and interpersonal relationship problems.
These negative child outcomes associated with inter-parental conflict can be long-
term. The Early Intervention Foundation/University of Sussex review of evidence for
the Department of Work and Pensions found the quality of the inter-parental
relationship is a ‘primary influence’ on children’s outcomes, and parents who engage
in frequent, intense, and poorly resolved inter-parental conflict put children’s mental
health and long-term life chances at risk, with negative effects evidenced across
infancy, childhood, adolescence, and adulthood.
Conflict between parents is associated with parents being less emotionally available
to their children and more hostile towards them, and can result in impaired parent-
child relationships and can affect children’s and adolescents’ wellbeing and
development, leading to increased anxiety, withdrawal and depression, and
behavioural problems including aggression, hostility and antisocial behaviour and
criminality.
Exposure to frequent and intense parental conflict can be damaging to children of all
ages:
•
Babies as young as six months old have been found to exhibit higher
physiological symptoms of distress such as elevated heart rate in response to overt,
hostile exchanges between their parents;
•
Infants and children up to the age of five years show signs of distress by
crying, acting out, freezing, as well as withdrawing from or attempting to intervene in
the actual conflict itself;
•
Older children between the ages of 6 and 17 years show signs of emotional
and behavioural distress when exposed to ongoing, acrimonious exchanges
between parents.
XX supports and welcomed the announcement in April 2017 of the new £39m
Reducing Parental Conflict Programme. However, we are concerned that separated
parents in in-work families may miss out on vital support to improve their
relationships and reduce conflict with clear benefits for their children, if the Reducing
Parental Conflict Programme includes only workless families.
DWP’s data show that in 2013-2014, 11% of children in couple-parent families had at
least one parent reporting relationship distress, and 32.4% of children in separated
families never have contact with their non-resident parent, while 9.6% of children in
separated families live in families where their parents report ‘very unfriendly’
relationships and a further 28.7% of children in separated families live in families
whose parents have no relationship (almost 40% of children in separated families
therefore have parents with no relationship or very unfriendly relationships).
Yet the same data set shows that only five per cent of all children live in workless
couple-parent families (the data do not show the proportion of all children in workless
separated families), and 10% of all children lived in workless families in Q2 of 2017.
While we support the Government’s focus on providing support to the most at-risk
families, we are concerned that too narrow a focus on workless families will have a
limited impact on reducing parental conflict by neglecting a large proportion of
children in both separated families where parents report no or very unfriendly
relationships with the children’s non-resident parent and intact couple-parent families
where parents report relationship distress. We would therefore urge the Department
for Work and Pensions to ensure that the Reducing Parental Conflict Programme
extends to in-work families as well as workless families, in order to realize the
Government’s laudable objective of reducing parental conflict and encouraging
parents to collaborate in the best interests of children.
RESPONSE TO PUBLIC CONSULTATION DOCUMENT:
DWP "CHILD MAINTENANCE: A NEW COMPLIANCE AND ARREARS
STRATEGY" ( December 2017 )
I am commenting on the above policy proposal as a citizen as well as a f rmer
who researched public policy for a from an . I also negotiated child maintenance during
the pre-CSA era, an ave assis a rea cve tn e ifficult or - "rather impossible" - task of
dealing with the CMS.
From my analysis of the above document, its historical context, as discussed in the
HC DWP's
Fourteenth Report on Child Maintenance (HC 587) and the Westminster Debate on the
Child Maintenance Service (18.4.2017), plus the appended Case Study of a CMS client, I
wish to comment briefly on what I consider to be the rather anachronistic assumptions
about gender in present British society which seem to underpin earlier policies on Child
Maintenance and this latest proposal.
I will also comment on the actual implementation of Child Maintenance policy via
the CMS with reference to to the appended summary of a case study and other
sources. All of these are highly relevant to the present policy proposal.
Basic Assumptions of Child Maintenance policy and Perceptions of Injustice
According to Child Maintenance policy non-resident parents (mostly men) pay child
maintenance; resident parents (mostly women) receive these payments. Although I have
only analysed the most recent policy statements, there does not appear to be any
reference to, or nominal assessment of, the receiving parent's income. Therefore, only one
parent, predominantly the mate parent, is held to be responsible for the maintaining the
child both parents, jointly, created.
Child maintenance policy therefore seems to be out of step with the thrust of
government's policies which have ensured greater gender equality, enhanced womens'
participation and opportunities in the workplace and where women function as people who
are financially independent from men - rather than chattel. Thus, for example, 70 0/0-80 0/0
of single women participate in the workplace - rather than chattel!
Holding one parent solely responsible for the maintenance of a child also
seems to be a retrograde step in comparison with child maintenance
arrangements during, for example the 1970s or 80s - a time of lesser gender
equality and opportunity for women. At that time, the assessment of both
parents' incomes and needs served as the basis of each parent's contribution.
Significantly, this process was supported by Legal Aid. In my own personal
experience, this made it possible to bring this often difficult process to a fair and
just conclusion. Even during the 1970s I would have considered the dismissal of
my own income as a well-paid Clinical NHS Director an injustice imposed on the
father of my child and an insult to my beliefs in gender equality.
Although I have not systematically researched how widespread my own sense of
having reached an equitable child maintenance settlement was at that time, since the
introduction of statutory child maintenance via the CSA, there had been widespread
dissatisfaction with policies and their implementation. This continues to this day, as
comments on social media reports, the House of Commons Debate and the appended
case study demonstrate.
Implementing Child Maintenançe Policies via CSA and CMS
The.....QSA. Historically, the reasons for dissatisfaction with statutory child maintenance
services Vla the CSA were manifold: demands for payment based on wrongly calculated
payments, the CSA's bullying tactics amidst its gross incompetence, combined with issues of
injustice over the role of male and female parents etc. Eventually, male parents' sense of
injustice attracted widespread media attention, with "Fathers for Justice" being the most
prominent.
Ihe....QMS. The Henshaw Report • eventually - acknowledged the CSA's gross
maladministration of child maintenance policy, tabelling it: "severely damaged", as a result
of which the CMS was formed. However, the Westminster Debate on Child Maintenance in
April 2017 demonstrated that the CMS is "merely a replay of the CSA"! Members of
Parliament, reporting their constituents' experiences of dealing with the CMS, labelled the
organisation, "unfit for purpose"..."failing families"... "frustrating and inefficient to deal
with"..."in need of a radical overhaul"...But, in spite of the then Minister commenting that
she "felt the heat" [ in particular when she) "...opens an email from a parent", by
December 2017 she nevertheless stated in the "Ministerial Foreword" to this report that
"this service is working well and avoiding the problems which had beset the previous child
maintenance service". There is thus denial of maladministration at the top of the Child
Maintenance Service, in spite of knowledge to the contrary.
Although the CMS is evidently functioning in the same grossly inefficient manner in
which the CSA "dysfunctioned", there is however one significant difference. The CSA's
clients paid for incompetent services via taxation only; the CMS' clients pay twice for
incompetence: once from taxation and then again through the significant fees which are
charged for using the service.
The appended case study of a present client of the CMS adds to the evidence reported by
Members of Parliament. It mirrors the many grievances of fathers expressed via social
media. The issues here, the MP's and social media, are: failures to provide correct
assessments for nonresident parents' payments, resulting in overcharging, failures to
implement agreed procedures such as the method of "direct-pay", lack of willingness to
correct errors, possibly due an inefficient caseworker and communication system, and the
unjustified and wrongful imposition of penalties, including enforcement orders.
Conclusions and Recommendations
Given the injustices embedded in child maintenance policy and the grossly inefficient
implementation of an already unfair policy, it is reasonable to conclude that it might be
most unwise for government the implement ever more punitive measures to penalise
parents who fail to pay child maintenance. Like any other organisation, the House of
Commons should "put its house in order" in the first instance before it can - reasonably -
justify these proposed draconian penalties, such as withdrawing passports and driving
licenses, which are reminiscent of nondemocratic regimes.
Child Maintenance Policy should be reviewed as a matter of urgency to include
both parents' income as the basis of child maintenance payments.
The CMS needs to be investigated as a matter of urgency to ensure the efficiency and
probity of the organisation.
In spite of the limitations of evidence investigated it might nevertheless be reasonable to
conclude that both, the flawed policy and grossly inefficient implementation of policy have
led to a sense of injustice and frustration with policy-makers and with the institution which
implements child maintenance policies (the CMS). This might in fact - at least partly - be
responsible for the non-compliance, largely committed by non-compliant male parents.
Given the CMS' severe maladministration of child maintenance policy, it is probable that
clients who accept financial responsibility for their children will be wrongly penalised,
as, seemingly, in the appended case study. Wrongly penalising paying parents might
lead to increases in noncompliance.
In the presence of the fundamental flaws of policy, gross maladministration of policy,
sense of injustice coupled with lack of access to the legal profession "to get justice", non-
compliance might therefore be considered a "rational" option. Evidence from studies of
compliance/noncompliance with paying tax shows that citizens comply where taxes are
used in a fair and just way; they explore and employ avoidance measures in situations of
perceived injustice. It is reasonable to assume that these psychologicat/behavioural
principles will apply to this particular population as well.
With regard to the evidence from the appended case study, the CMS' actions - and in
particular its non-compliance with repeated requests "to put things right", this must
raise the question whether the CMS' behaviour is intentional, rather than negligent. This
should be investigated.
In turn, this also raises the question whether the CMS has been incentivised to impose
penalties in order to generate income via the imposition of penalties and whether any
such incentives have been abused by the CMS.
Thus, does the DWP or any other arm of the government contain a system of rewards
for the imposition of such penalties? Which safeguards heave been built into the CMS
system to prevent the abuse of clients?
These issues require to be investigated before policies of this draconian nature
are considered and imposed on the citizens of this country.
Finally, policy-makers should thus take a fresh look at their policies and establish
the extent to which their policies are designed and implemented in such a way that
they serve - all users: male and female parents - and ultimately families. This must
be the intended purpose.
Non-compliance has its causes, and such behaviour might in fact - at least partly -
have been generated by the actions of the House of Commons.