Efforts to reduce child poverty are being hindered by the Child Maintenance Service (CMS) being slow and ineffective on enforcement for some parents and imposing unaffordable payments on others, MPs warn today.
With the poverty rate of young people in the UK’s 2.3 million separated families higher than that of children in couple parent families, the Report from the Work and Pensions Committee concludes that the CMS can play a vital role in lifting children out of poverty, but that reforms are needed.
After taking evidence from parents who make payments through the service and from those who receive payments, the Committee says that improving the speed and effectiveness of enforcement should be a priority, so that children can benefit from the maintenance due.
It recommends that the CMS should step in faster when direct payments between parents are not working. Such cases should be moved from Direct Pay to Collect and Pay, where the service both collects and transfers maintenance from the paying to receiving parent.
To help parents on low incomes, there should be means-testing for Collect and Pay fees. Currently, the CMS charges the paying parent 20% of the maintenance collected and the receiving parent forgoes 4% of the collected money. The Committee recommends these fees should not apply to the lowest income households. Collect and Pay fees for parents who have suffered domestic abuse, be they paying or receiving parents, should also be waived.
For paying parents, the Report recommends a deadline for the Government of six months to complete its analysis of maintenance affordability, and come forward with proposals for updating maintenance levels and thresholds. The Committee cites evidence that the current system is pushing some paying parents into poverty, leaving them without enough to live on and in mental distress.
As part of the inquiry, the Committee held a roundtable event to hear the views of paying and receiving parents. A summary of what the Committee heard can be found in the Annex of the Report.
Sir Stephen Timms MP, Chair of the Work and Pensions Committee, said:
“The accounts we heard of frustrations and distress from parents with experience of both sides of the Child Maintenance Service (CMS) should act as a wake-up call for the service. With many young people in separated homes living in hardship, the CMS can play a vital role in improving lives. Without change, children will be left in poverty without the maintenance they are due.
“Improving enforcement is key. The CMS should also ensure parents experiencing domestic abuse, who would be best served by Collect and Pay, are not penalised by the fees for this payment method.
“The excessive payments being demanded from some parents cause serious distress, and promote non-compliance. The outdated thresholds need to change to make payments more affordable.”
