Make an offer to pay what you can afford, rather than nothing. CMS will consider this!
We know that many low-income paying parents struggle with Child Maintenance (CM) payments and arrears. The numbers in the 'collect' scheme and on state benefits have doubled since the coronavirus pandemic to approximately 75,000 and this seems likely to continue to go up.
If you are currently working, the Child Maintenance Service (CMS) will try to collect arrears from you. According to the Child Maintenance: Fees, enforcement and arrears briefing paper (please see page 4, 12 and 16 for more detailed information), CMS aims to recover arrears within 2 years, but the maximum that they can collect from you is 40% of your net income. However, for many of you that will simply be too much!
While the CMS 'always begin by requesting full payment of the outstanding arrears', in determining whether to accept a repayment plan, it should also consider both the needs of the 'Non-Resident Parent' (and their new family, if applicable) and any representations from them concerning hardship.
If a repayment plan is likely to result in there being over £1,000 arrears still owing after two years, then the CMS will be 'likely' to obtain a liability order so it can use its enforcement powers. In deciding whether to accept a part payment as full and final settlement, the CMS must consider the welfare of any child likely to be affected, and the likely success of continued enforcement action against the Non-Resident Parent (NRP). It will also investigate the Non- Resident Parent’s circumstances.
Obtaining a liability order from a court gives legal recognition of the debt, which then allows the CMS to use the enforcement powers outlined below. A liability order will 'usually' be sought when arrears total at least £500. A fee of £300 is payable to the CMS by the NRP if a liability order is made. It is important to know that, if you make an offer to pay what you can afford, rather than nothing, CMS will consider this. It will not wipe clean your CM debt, but it is likely to mean that CMS will not pursue you for it or ask bailiffs or external contractors to try to recover this from you. So it is always better to agree to pay something rather than nothing - make them an offer!
The Child maintenance: Calculations, variations and income briefing paper also indicates that Child Maintenance payments impact particularly heavily on those in receipt of Universal Credit. Evidence by Dr Christine Davies, Visiting Senior Lecturer in Mathematics at Royal Holloway University of London, to the Work and Pensions Committee argued in 2017 that:
"The 2012 regulations are inappropriate – they produce maintenance amounts that are beyond the reach of many non-resident parents, especially those on low income. Under Universal Credit, non-resident parents paying for 1, 2 or 3 (or more) children on the 2012 Scheme through the CMS collection service have “marginal tax rates” assessments that are impossible to pay [and lead inevitably to non-payment, growing arrears and expensive (often ineffective) enforcement."
According to a report by the Government's own statutory body, the Social Security Advisory Committee (SSAC) Separated parents and the social security system (2019), the current maintenance formula leaves some NRPs on Universal Credit “with weak work incentives”, meaning that “some can be better off out of work”. There is much that we know is wrong with the CM calculation. SSAC’s report identifies other key issues that we have been telling successive governments for years – there simply is no strategy defined for separated parents. This neglect is now made plain by the Government’s own advisory agency report. Policies, to date, have assumed that one parent is always a provider, and the other, a carer, not baesd on income, but on who has more than 50% of overnight stays or who receives Child Benefits. Such policies do not reflect the reality or diversity of modern family life. Neither do they reflect a stated desire for sex/gender equality. ‘Hostile sanctions’ policies have contributed to the ongoing failure of the Child Maintenance system - above all to children at a very stressful time for them and their parents.
Guy Opperman, the Parliamentary Under-Secretary of State for Work and Pensions representing Baroness Stedman-Scott, in the recent debate in Parliament on 21st January 2021 pointed out that Baroness Stedman-Scott had committed to meet all colleagues who are raising specific case brought to her by individual MPs within a month. The transcript of the this commitment is here.
ACTION - What you can do
This is an opportunity that you should not miss to get Ministerial attention.
The issues identified need to be recognised and addressed. Please contact your MPs to urge them to acknowledge the issues raised, using your own examples. If you don't know who your MP is, you can find out by visiting the following link. Here is also an example of a clear and effective letter to an MP.
FNF membesr provided evidence to SSAC or their experience of CM. We also made a a written submission to SSAC that identified specific problems, the effect these were having and proposed solutions. If you are speaking to your MP about your specific issues, you may find it helpful to review this too and to draw their attention some of the solutions we suggest that address the issues you have been experiencing.
If you wish, feel free to share with us privately the letter you send along with reply you receive to admin@fnf.org.uk with 'CM Collections' in the subject header.
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