Posted 19 July 2021
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Posted 26 June 2017
Gingerbread’s new report examines loopholes in the child maintenance system
The child maintenance system is failing to ensure children receive the appropriate level of support they are entitled to, according to a new report by Gingerbread.
‘Children deserve more’ details how, in too many cases, loopholes in the Child Maintenance Service (CMS) mean that non-resident parents are paying a fraction of what they should. The CMS is supposed to calculate and, when necessary, enforce, the payments that children need. But the report argues that recent reforms have instead prioritised administrative convenience over all other concerns. This has led to a situation where desperate parents are repeatedly being let down by a system that seems designed to be as unhelpful and opaque as possible.
In particular, the decision to base the child maintenance calculation on gross taxable earnings or profits as reported to the HM Revenue and Customs (HMRC) has had widespread repercussions. One common issue is that paying parents with often considerable assets can end paying a bare minimum, since several sources of income aren’t taken into consideration. In other cases, self-employed parents are able to get away with under-reporting their income in order to reduce their payments.
Ironically, the CMS was set up to replace an ailing predecessor, the Child Services Agency (CSA), which was shut down due to being widely regarded as not-fit-for-purpose. But for a significant minority, the new method of calculating child maintenance is still not working
The new, inadequate method of calculating child maintenance payments is only half the problem. Parents who believe they are receiving less than their children are entitled to frequently complain about being stonewalled by the CMS, or being kept in the dark about their options. Since the calculation is based on HRMC information, single parents often find themselves being passed back and forth between the two organisations, with neither taking responsibility for re-evaluating the calculation.
Gingerbread Director of Policy Dalia Ben-Galim says:
“Up and down the country, loopholes in the child maintenance system are allowing parents to deny their children the essential support they need. Some are deliberately hiding their income, while others can perfectly lawfully escape with income or assets ignored; some are cash-in-hand labourers, while others are multi-millionaires. But in all these cases, single parents now have to collect evidence for a system that continually obstructs them. It’s not enough that they juggle being breadwinners and homemakers – they are now forced to become private detectives as well. Unless there is an urgent change, these injustices will continue indefinitely.”
Gingerbread is calling for the new government to set out a clear strategy for tackling child maintenance avoidance and evasion, including far greater co-ordination between the CMS and HMRC when assessing incomes, and considerably more support for parents who wish to challenge assessments.