Gingerbread calls on the Government to scrap unfair child maintenance fees

Posted 29 June 2021

Gingerbread calls on the Government to scrap unfair child maintenance fees, as new figures show that over £408 million is now owed to children across Great Britain

Gingerbread, the charity for single parent families, is calling on the Department for Work and Pensions (DWP) to scrap unfair child maintenance fees. These fees are taken by the Child Maintenance Service (CMS) from money owed to children by their non-resident parent. This call comes as figures released today show that the CMS continues to fail in its duty with a shocking £408.3 million in arrears now owed to children across Great Britain.

Today’s figures also show:

  • 100,900 children are not receiving the child maintenance owed to them through ‘Collect and Pay’
  • 28% of parents (42,000) are not paying any of the child maintenance they owe under ‘Collect and Pay’
  • Since December 2020 overall arrears owed to children have increased by £12.5 million under ‘Collect and Pay’

Victoria Benson Chief Executive of Gingerbread said:

“It is a child’s legal right to be supported by both parents, and the Child Maintenance Service was established to help to enforce this right. Yet the very service designed to protect this right is not only failing them but charging them, too. While it’s right that the government should collect maintenance on behalf of children where it is not willingly paid, it is incredibly unfair that fees are deducted from this money before it is passed on.

“Children are going without as a result of these fees being deducted and it simply cannot be right that a government service is responsible for this.”

Child maintenance is the money a non-resident parent should pay to support their child’s upbringing and this money is essential for many families. Research has shown that if single parent families who are owed maintenance and are living in poverty, were paid the child maintenance due, 60% of them would be lifted out of the poverty trap[1].

While separated parents can agree child maintenance between themselves, many use the CMS. The CMS offers a ‘Direct Pay’ service (where the CMS calculates how much child maintenance should be paid, but the parents arrange payment between themselves and no fees are charged) or ‘Collect and Pay’ (where the CMS calculates, collects and passes on child maintenance to the resident parent and collects fees from both parents).

‘Collect and Pay’ is typically used where a non-resident parent is unwilling to pay the maintenance that the CMS has assessed that they owe for their child’s upbringing. Single parents whose children receive child maintenance through the ‘Collect and Pay’ service are charged a £20 application fee as well as a 4% fee levied on any maintenance payments they receive on behalf of their children. The application fee is charged whether or not the CMS actually collects any money owed (although there is an exemption from the application fees for survivors of domestic abuse).

Government figures show that in 2019/20 £6.77m was collected in fees from maintenance owed to children[2]. This is on top of a 20% fee charged to non-resident parents who use ‘Collect and Pay’ arrangements. Gingerbread supports a fee being charged to non-resident parents who do not willingly pay the maintenance they owe their children but does not agree that resident parents should pay either the application fee or the 4% levy. It is the children who lose out due to these additional fees being charged.

In addition to the unfairness of ‘Collect and Pay’, the CMS service is simply not delivering. The CMS does not effectively enforce payment and allows non-paying parents to build up huge arrears with 42,000 (28 per cent) parents not paying any of the child maintenance they owe under Collect and Pay. This means not only are single parents and their children forced to go without with many being pushed into poverty and debt[3] but it allows the continuation of economic abuse and control in abusive relationships.

The Government, and specifically the DWP, must drop the ‘Collect and Pay’ application and collection fees from the CMS for all receiving parents immediately.

The DWP has recognised issues with non-payment under CMS and is currently consulting on secondary legislation but Gingerbread believes the proposals are geared to saving the CMS money rather than putting more unpaid maintenance in children’s pockets. The CMS is also currently subject to an investigation by the National Audit Office which will report later this year and last week in the Lords the DWP Minister, Baroness Stedman Scott, announced an independent inquiry into how the CMS serves the survivors of domestic abuse.

­–ENDS–

Facts and figures on child maintenance

Gingerbread’s 2019 report on the effectiveness of the CMS’s Direct Pay and Collect and Pay services

About Gingerbread

Gingerbread is the leading charity working with single parent families. Our mission is to champion and enable single parent families to live secure, happy and fulfilling lives.

Since 1918 we’ve been supporting, advising and campaigning with single parents to help them meet their family’s needs and achieve their goals. We want to create a world in which diverse families can thrive. We won’t stop working until we achieve this vision. Whatever success means for a single parent – a healthy family, a flexible job, stable finances or a chance to study – we work with them to make it happen.

Sources

[1] Hakovirta et al (2019) Child Poverty, Child Maintenance and Interactions with Social Assistance Benefits among Lone Parent Families : A Comparative Analysis. Journal of Social Policy. pp. 19-39. ISSN 1469-7823

[2] https://commonslibrary.parliament.uk/research-briefings/cbp-7774/

[3] https://www.gingerbread.org.uk/what-we-do/news/new-report-the-single-parent-debt-trap/

Photo Credit: Amaro Eno

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