Child Maintenance: Fees, enforcement and arrears

The briefing focuses on the use of enforcement measures in CMS cases (the “2012 scheme”), though they may also be applied to arrears arising from arrangements organised under the 1993 and 2003 schemes with the Child Support Agency (CSA).

Because new enforcement action was suspended by the CMS during the coronavirus outbreak, caution should be taken when comparing data for the quarter ending June 2020 with earlier periods. The Department for Work and Pensions (DWP) has said figures for the September 2020 quarter “continue to reflect the return to normal pre-Covid-19 levels of service delivery and include clearing any backlogs that may have built up during the height of the pandemic”.

Coronavirus 

The Child Maintenance Service has said that it is moving towards “a full service” and stated that they “will take action if child maintenance is not paid”. They have advised the parent with care to “keep a record of any payments you receive and any missed payments. If any payments are missed or not made in full, we may begin collection activity to recover any unpaid child maintenance”.

In September 2020, the DWP said it was working with its partners, such as bailiffs and courts, to reinstate arrangements to support enforcement activity.  The DWP has said that since September, the CMS has “stepped up efforts to pursue dedications and on the recovery and enforcement of outstanding arrears by reviewing all non-paying cases to make sure that each one is up to date”.

As of 16 December 2020, the CMS Direct page says “if any payments are missed, we will review your case and may begin collection activity to recover any unpaid child maintenance”. The CMS in Northern Ireland may not be able pursue arrears during the Coronavirus period and calculations of liability may be delayed.

Fees

Individuals must pay a £20 fee for applying to the CMS to calculate child maintenance. The fee is not charged if a person is aged 18 years or under, or is a victim of domestic abuse or violence and has reported this to “an appropriate person”.

For those under “Direct Pay”, where the CMS calculates the rate and payments are made between parents, there are no additional collection fees.

For those using “Collect and Pay”, where the CMS collects and passes on payments, the Non-Resident Parent must pay an extra 20% of the maintenance due and the Parent with Care receives 96% of the child maintenance allowance paid by the Non-Resident Parent.

In 2019/20, the CMS collected £41.54 million in fees from Paying Parents and Recieving Parents on the Collect and Pay Scheme. 

Sources: PQ 281113 [Child Maintenance Service], 23 July 2019; PQ 25685 [Child Maintenance Service], 5 March 2020; PQ 140842 [CMS: Fees and Charges], 20 January 2021. 

The single-parent’s charity, Gingerbread, published Direct Pay child maintenance: Innovation or failure? in March 2019. This examined the interplay between the Direct Pay and Collect and Pay systems. The report criticised the fee system operating under the 2012 CMS scheme, arguing that it had failed to “engender co-operation” between parents, which was one of its intentions when introduced. It argued that the CMS should monitor Direct Pay Arrangements and abolish Collect and Pay fees.

Do Paying Parents comply with child maintenance arrangements?

At the end of December 2020, there were 537,000 child maintenance arrangements under the 2012 CMS scheme, and 502,000 Paying Parents (a parent may be liable to pay more than one arrangement).

Collect and Pay

Excluding those arrangements not yet assigned to a scheme, 193,259 (36%) were on Collect and Pay in December 2020. The proportion of arrangements assigned to Collect and Pay was 30% in March 2017 and has risen gradually since then.

Please note that the compliance rate for the quarter ending June 2020 is not directly comparable to previous quarters. The rate for June 2020 has been inflated as a result of the coronavirus pandemic, and the decision to pause all deductions from Universal Credit from 10 April to 9 May and for the UK Government to pay all child maintenance liabilities for parents paying via deductions from Universal Credit. More information can be found in section 2.1 of this briefing. 

Around 67-68% of parents on Collect and Pay have contributed a form of payment in each quarter since December 2018 to March 2020. This is an increase from around 55-56% in the period March 2015 to September 2016. In the quarter ending December 2020, compliance was 72% (Source: DWP, Child Maintenance Service statistics: Data to December 2020 (Experimental), April 2020).

Direct Pay

On compliance with Direct Pay arrangements, a survey report published by the DWP in 2016 found that of all receiving parents who had a Direct Pay calculation, 49% had an “effective arrangement” after three months. This rose to 53% after 13 months. An effective arrangement was defined as “payments were being made on time, in full and the Receiving Parent perceived the arrangement to be working well” (Source: DWP, Survey of Child Maintenance Service Direct Pay clients, 2016, p67).

Initial CMS response to the build-up of arrears

If arrears have been accumulated under the Collect and Pay system, the Paying Parent is usually sent an arrears notice, and caseworkers may negotiate and put in place a repayment plan. The CMS has said that it aims to recover arrears within two years and expects the Paying Parent to pay up to 40% of their net income to clear them. The CMS may also seek, or accept a proposal of, part-payment in satisfaction of liability for the whole arrears. The written consent of the Person with Care (or child applicant in Scotland) must be obtained before this is accepted.

The CMS does not monitor payments made under Direct Pay. However, the DWP states that where parents do not pay their liability in full and on time, the Person with Care should inform the CMS who will “take swift action to move the case to Collect and Pay to enforce payment and recover any arrears”.

Collection powers

Without a court order, the CMS may collect arrears through:

• A Deduction from Earnings Order: An employer deducts payment for arrears direct from the Paying Parent’s salary.
• A Deduction from Earnings Request: As above, but for the Armed Forces.
• A Deduction Order: Either a lump sum or regular deductions are made from bank accounts.
• Collection of Assets from a deceased paying-parent’s estate.

Enforcement powers

With a Court-obtained liability order, the CMS may take the a range of enforcement action.

In England and Wales these powers include using bailiffs to take control of goods and applying to the court for an order of sale of an asset, once it is registered by a court. In Scotland, powers include requesting a sheriff to make a charge of payment to require payment after 14 days, or freezing assets to prevent them being sold or transferred.

Fees may be charged when the CMS takes enforcement action against a non-paying parent— current fees can be seen at Gov.UK, Enforcement charges. 

In Great Britain, on successful application to the courts, an individual may also be disqualified for driving or from holding a passport.

Persons with Care on Direct Pay must first transfer their case to Collect and Pay for the CMS to bring enforcement action against the Paying Parent.

How often does the CMS use its collection and enforcement powers?

Note, for the reasons stated above, caution should be taken when making comparisons with the June and September 2020 quarters. 

From June 2016 to March 2020, the number of deduction orders in process each quarter increased from a low of 1,200 in the quarter ending June 2016, collecting £0.5m, to a peak of 3,800 in the quarter ending December 2019, collecting £2.7m. In the quarter ending December 2020, there were 3,500 deduction orders in process, collecting £3.3m. (Source: DWP, Child Maintenance Service statistics: Data to December 2020 (Experimental), April 2020, Table 7.1). 

Enforcement Agent Referrals in process are when the CMS has referred a Paying Parent’s unpaid child maintenance to an enforcement agent. The referral will remain until unpaid child maintenance and fees that are covered by a liability order have been paid or the Enforcement Agents return the case. Their number has increased from 300 in the quarter ending June 2015, to a peak of 6,700 in the quarter ending June 2019. In the quarter ending December 2020, there were 3,900 Enforcement Agent Referrals in process. These only occur in England and Wales (Source: DWP, Child Maintenance Service statistics: Data to December 2020 (Experimental), April 2020, Table 7.1).

Since the quarter ending September 2019, four passports have been subject to either suspended or immediate confiscation orders, five driving licences have been disqualified either immediately or under a suspended order, and 189 prison sentences These figures do not include cases where a sanction has been suspended as a result of the Paying Parent complying with an agreed repayment schedule (Source: DWP, Child Maintenance Service statistics: Data to December 2020 (Experimental), April 2020, Table 7.2).

Section 5 of the Briefing provides more detail on the use of other CMS powers. 

Writing off arrears

Since 2018, the UK Government has had the power to write-off arrears that accumulated when a case was administered by the CSA under the legacy 1993 and 2003 child maintenance schemes. This can be done if no payment towards those arrears has been made for three months and other conditions are met. For more information, see the Library paper Child maintenance: The write-off of arrears on Child Support Agency cases.