As part of the process of replacing the Child Support Agency with the Child Maintenance Service, arrears being transferred to the latter are likely to sit untouched and uncollected, explains Janet Allbeson. This not only means that children will be failed, but the lack of persistent action to tackle non-payment makes child maintenance being seen as optional.
Unnoticed by most people, save those directly affected, the much-criticised Child Support Agency (CSA) is being gradually shut down. The Child Maintenance Service (CMS) is instead taking over. In a phased three-year programme of case closure, current maintenance liabilities for children in around 700,000 CSA cases are gradually being ended, a process which began in January 2015.
But a newly published report from Gingerbread – Missing Maintenance – highlights how, as current CSA liabilities for children are being terminated, millions of pounds worth of maintenance arrears owed remain outstanding. So what is happening to these debts, and how much effort will go into trying to collect this money?
What’s happening to CSA maintenance debts once current liability is terminated?
Rather like a deflating balloon the latest official statistics show the amount of arrears owed to parents with a current CSA liability has dramatically declined from £1,112m in December 2014 (just before liabilities began to be terminated) to £586m by March 2016 – a drop of £526m. This reflects the current case closure programme. But where have these debts gone? Figures up to March 2016 reveal that £153.3m of those arrears has shown up in a gradually inflating amount of “legacy” arrears, which have been transferred from the CSA system over to the new CMS.
But where are the rest? The answer is that hundreds of millions of pounds worth of child maintenance arrears are still being held on the CSA system, undergoing a process variously described as “case clean up”, “arrears cleansing” or “arrears validation”. It is only once this process is complete, that the arrears will either be written off, or transferred over to the CMS for possible collection.
What is “arrears cleansing” or “arrears validation”?
The “arrears cleansing” process is an attempt to get to grips with the legacy of years of CSA neglect of accumulated child maintenance debt. “Part of the problem in the past,” admitted the Minister in charge of child maintenance in 2013, “has been that arrears have been allowed to build up without any action being taken by us.” In some cases, decisions were taken to temporarily suspend arrears collection – for example because the non-resident parent was untraceable, had moved abroad, or had insufficient income – which have never been revisited. In other cases, the arrears balance has simply accumulated over a number of years without action, and with no adjustment to take account of changed circumstances. Unless debts can be verified as accurate, they are difficult, if not impossible, to enforce.
The intention is that arrears on the CSA system will be reviewed, checked for accuracy and brought up to date. In a limited number of circumstances, the arrears can be written off – for example, when the non-resident parent or the parent with care has died. CSA parents owed the maintenance will then be sent confirmation of the final validated amount, and asked whether they still want the debt collected or written off. If it’s not written off, the finalised CSA arrears will be transferred over to the CMS system for possible collection.
How long is arrears cleansing taking?
The DWP predicted that simple arrears-only cases would be dealt with quickly, whilst more complicated cases could take up to six months. Recent figures obtained by Steve McCabe MP (see chart) indicate that a considerable gap is currently building up between the number of cases entering the ‘cleansing’ process and those emerging at the other end, when a notice of the validated arrears is sent to the parent owed maintenance.
One group of CSA cases selected early in the case closure programme were ‘nil payment’ cases: those where no maintenance was being paid and hence were building up maintenance arrears. Recent DWP figures show that up to December 2015, liability in some 56,100 ‘nil-payment’ cases had been ended. However, the complete closure of such CSA cases, once a final debt balance had been established, had occurred in only two per cent of those cases to date.
Single parents have contacted Gingerbread to complain how, having waited months for the CSA to consider legal action against a consistently non-paying non-resident parent, their case had been shut down before the commencement of any action. There is then a further delay of many months while the arrears go through the ‘cleansing’ process, and whilst no enforcement action takes place. Meanwhile the CMS, in processing their new application for child maintenance, has been given no knowledge of the other parents’ record of non-payment. There then follows a further period of weeks and months, with the CMS starting from scratch in dealing with the non-payer.
Write-off of CSA arrears
One of the grounds for arrears write-off is where the parent owed the arrears requests it. Missing Maintenance draws attention to the official letter sent to those owed maintenance, when giving notice of the final, validated sum. This openly suggests they consider writing off the debt. The letter says, “Some clients in a similar position to you tell us that they do not want their child maintenance managed by the new organisation and wish to make a fresh start by writing off their arrears.”
For many parents, frustrated by years of CSA foot-dragging when it comes to pursuing the maintenance they are owed, the letter suggesting debt write-off adds insult to injury. In 2014/15, £6.5m in child maintenance arrears was written off at the parent with care’s request. In the period April to December 2015, this had risen to £17.3m.
What effort will go into collecting ‘legacy’ CSA arrears held on the CMS system?
In a recent response to a parliamentary question, the DWP said that the CMS will “actively pursue” collection of CSA ‘legacy’ arrears in three situations: (i) where a new CMS case is opened which relates to the former CSA case; (ii) where, in the last three months prior to a case moving over to the CMS, arrears repayments were being made; and (iii) where a client “actively requests” collection of their arrears.
All fine in theory, but what will this mean in practice? So far, it appears that those who previously used the CSA are in no hurry to pay £20 to apply to the new CMS – which is likely to mean that any CSA arrears owing to them will go uncollected. Early statistics on the CSA case closure programme, indicate that up to December 2015 there were only 39,500 former CSA cases (out of 295,100 cases where CSA liability had been terminated), where an application to the CMS had been made. It is unclear how much of the £92.6m child maintenance debt owing at this date was linked to these cases.
The statistics also show that, by December 2015, a further 13,100 CSA ‘arrears-only’ cases had appeared on the CMS system. These were clearly cases where the ‘cleansing’ process had been completed and where, despite no ongoing CMS application, the parent had not requested arrears write-off – and therefore the arrears case had been transferred.
It also remains to be seen how “actively” a former CSA parent will have to request that the CMS chase arrears now transferred to the service. Having resisted write-off, how many parents will realise that they must still “actively request” future collection? Past experience of the CSA’s “client-led” approach is not encouraging. In practice, it seemed to mean that – unless the parent repeatedly took the initiative and called to demand that debts be pursued – nothing would happen.
At this point, all the signs are that the majority of the CSA arrears being transferred to the CMS system are likely to sit untouched and uncollected on the CMS system. This may be welcomed by a cash-strapped DWP bureaucracy, but it is bad news for the children of single parents.
Single parents lead busy lives, often juggling low-paid work with raising their children. Many with experience of using the CSA have grown disheartened at the agency’s failure to successfully pursue child maintenance debts owing to them. The risk is that, through a combination of weariness, low expectations, an unwillingness to pay for a service which, based on experience of the CSA they are uncertain can deliver, a considerable proportion may give up both on future child maintenance and hence on the past payments still due.
Not only will children be failed as a result; society also loses when – due to a lack of persistent and concerted action to tackle non-payment – payment of child maintenance ends up being seen as optional, rather than obligatory.
Janet Allbeson is Senior Policy Adviser at Gingerbread. Formerly she was Committee Specialist to the Work and Pensions Select Committee and a lawyer specialising in social welfare law.