Covid-19: Child Maintenance Service

I beg to move,

That this House has considered the operation of the Child Maintenance Service during the covid-19 outbreak.

I will do my very best to keep my speech within that time, Madam Deputy Speaker. I thank the Backbench Business Committee for granting this important debate, and all hon. and right hon. Members who signed my application and who are taking part today. I also thank the Under-Secretary of State for Work and Pensions, the hon. Member for Hexham (Guy Opperman), for attending today’s debate in place of Baroness Stedman-Scott, who sits in the other place.

The Child Maintenance Service has been, and still is, a fundamentally broken system that requires urgent action through a root-and-branch review. In spite of calls from across the Chamber, from One Parent Families Scotland and from Gingerbread, it is yet to make the necessary changes. Nearly 750,000 children throughout the UK rely on the CMS. If the children of single parents who are in poverty and not receiving maintenance actually received the payment, it would lift 60% of all cases out of poverty.

The way in which the CMS has operated during this pandemic has simply exacerbated the existing problems. The whole of the Department for Work and Pensions has been under pressure during the pandemic, and staff have been working under incredible pressure to ensure that benefits are paid as quickly as possible. DWP staff have been rightly congratulated for what they have done, but the situation has affected the service from the CMS, which was failing many families even before covid-19 struck and staff were redeployed to help with universal credit and jobseeker’s allowance. The CMS is letting down parents with care and non-resident parents, but it is ultimately the children and young people the CMS is supposed to serve who are being deprived of the maintenance payments necessary for their upkeep.

Single parents are bearing the hidden costs of children being at home all day, with expenses for things such as extra heating, food and supplies for home schooling. Some parents have needed to reduce paid work hours or stop employment completely during this period to care for their children. The financial impact means that many single parents are even more reliant on child maintenance payments. We need to see clear action from the UK Government to secure the financial support to which children in Scotland and across the rest of the UK are entitled.

The halting of the collection of CMS payments during the coronavirus lockdown has had a devastating impact on many single parents and their children, which is why the SNP has been calling on the UK Government to introduce a minimum maintenance payment to provide parents with care and their children a guaranteed income to prevent hardship and ensure a dignified standard of living. Our call has been backed by Gingerbread. In stark contrast, the Scottish Government are using their devolved powers to ensure that children and families are supported during this difficult time and to prevent them from being pushed into further hardship.

The SNP Government have led the way on tackling poverty this past year by introducing game-changing priorities such as the Scottish child payment, which is in addition to the Best Start grant, the baby box, free prescriptions and the mitigation of damaging Tory policies such as the bedroom tax. Westminster should be following Scotland’s lead by scrapping the poverty-inducing two-child limit and benefit cap and by keeping the £20 uplift to universal credit and working tax credit and extending it to legacy benefits. The Scottish Government provide free school meals during school holidays and look after children from poor backgrounds in school during lockdowns.

The amount collected through CMS enforcement has decreased markedly during the covid-19 outbreak, with many of the measures that the CMS normally uses to collect payment going unused as a result of the reduced service. Although compliance has apparently increased to 72% during the pandemic, this has been driven mainly by the significant influx of parents enrolling on to universal credit and having CMS payments deducted automatically. Following the halt on enforcement last year, the UK Government must now commit to the resumption of collections and the clearing of arrears accrued. I hope the Minister will explain how the CMS plans to maintain and increase compliance as and when parents are to re-enter the workforce.

The DWP’s own figures show that around 68% of parents on collect-and-pay contributed a form of payment in each quarter from December 2018 to March 2020. That was an increase on previous periods, but the figures must be treated with caution as they reflect only those who have paid some child maintenance in the past three months. Furthermore, every case under direct-pay arrangements is assumed to have paid the full amount; this prevents the DWP from providing an accurate reflection of just how high arrears have risen and by how much children are being deprived. The DWP’s own survey in 2016 found that only 49% of direct-pay cases had an effective arrangement after three months, so the arrears figure is likely to be much higher than the DWP’s figures show. Will the Minister agree to reconsider the CMS’s definition of compliance, to represent the reality of child maintenance payments?

As of September 2020, recorded arrears had accumulated to £379.2 million—9% of all maintenance that should have been paid. Arrears increased by more than £100 million between March 2019 and September 2020 alone. The UK Government need to get a stronger grip of this by focusing on not just current liabilities but clearing the increasing arrears.

I understand that many people’s incomes have been impacted by the lockdown. Many of those people are my constituents. A balance must be struck to protect children, which is why last year I called on the Work and Pensions Secretary to introduce a minimum maintenance payment where a parent with care is not receiving payments or where calculations have been reduced because a non-resident parent’s income has been cut. The UK Government must step in and provide minimum maintenance payments directly to ensure that each child is receiving a minimum amount. That was required last year, and because of covid-19, it is still required now. Will the Minister give his assessment of a minimum maintenance payment and commit to seriously investigating it?

Parents are so dissatisfied with the CMS that four parents, backed by Gingerbread, Mumsnet and the Good Law Project, are seeking a judicial review as part of the #FixTheCMS campaign. It is a poor reflection of this Government’s efforts and priorities that parents have had to resort to this course of action. For years, this Government have ignored warnings that the Child Maintenance Service is totally unfit for purpose.

The key way that the CMS can ensure proper payments and clear the arrears mountain is by using its enforcement powers. Since 2019, only three passports have been confiscated, and no driving licences have been suspended, despite persistent non-payment from tens of thousands of non-resident parents. Previous responses to my written questions have shown that the UK Government are not even recording how often maintenance debts are being referred to credit agencies. Will the Minister provide those figures and his evaluation of the use of the powers introduced in 2019? I hope he will commit to renewed efforts on enforcement and explain how he plans to achieve that.

During the pandemic, children are experiencing greater hardship. The UK Government should be supporting them in whatever way they can, not pushing them further into poverty by taking 4% of maintenance received through the CMS system. Even victims of domestic violence who cannot come to a voluntary agreement are subject to this tax. From 2016 to 2019, the CMS taxed parents a total of £70 million, and in 2018-19 it taxed more than £33 million. There is no justification for that, and I hope the Minister will respond to the points I have made and commit to reviewing the 4% maintenance tax.

The current fee of £20 to open a child maintenance case is a punitive charge. Parents should make a voluntary arrangement where possible. However, if a parent with care is turning to the CMS, it means that the voluntary arrangements have failed. This is needlessly taking money from children. The CMS collected £1.5 million in application fees in 2017-18 alone. I hope the Minister will provide clarity on why the UK Government insist on continuing to collect this fee and commit to reviewing it. At the very least, I hope he will consider abolishing the fee for people in receipt of certain benefits, as the Government did for victims of domestic violence. The UK Government have options, and they must use them.

The CMS does not provide an accurate or fair reflection of non-resident parents’ income. Calculations are based on their apparent gross income. However, in many cases, some income is not even regarded as gross income and is not calculated. Parents must ask for a variation to include this, and it can only be asked for if a parent knows about it and if the income is at least £2,500. In 2017, the Government consultation proposed including unearned income in calculations, yet nothing has happened. In a written question in 2018, the Minister said that it required a change in primary legislation. Will the Minister confirm today that this amendment will be brought forward to ensure that calculations account for the total income of a non-resident parent? In addition, parents with care can no longer claim for a variation on the grounds of a lifestyle inconsistent with income—come on! These calls were backed by the Work and Pensions Committee in 2017 and by Gingerbread, so will the Minister agree to look into reintroducing those grounds for variation?

In a previous Parliament, my private Member’s Bill asked for the threshold for recalculation of maintenance to be lowered from 25%, so that calculations can be more accurate without adding to the CMS’s workload. Will the Minister agree today to conduct a review of the threshold, with a view to lowering it? The covid pandemic has exacerbated the problems, causing incalculable damage to children and young people because of the ineffectiveness of the CMS. It is more than time that the Government sorted this out, and I look forward to the Minister’s response.

We will begin with a time limit for Back Benchers of four minutes, which might have to be reduced.

I congratulate the hon. Member for Motherwell and Wishaw (Marion Fellows) on securing this important debate, and I thank the Minister for taking time earlier today to speak to me about some of the cases that are of concern to me in my constituency.

Once upon a time, I was the Minister with responsibility for the CMS, and my worry is that our debate will degenerate into an attack on the hard-working staff. I know from my own experience how diligent they are—sometimes in the most difficult of circumstances, trying to track down parents who refuse to pay and investigating those very difficult cases where people deliberately hide their income. I think there is a special place in hell for those who go out of their way to disguise income to prevent their former partner from being able to feed their children, or to buy school shoes or a new winter coat.

From the work that has been done by Gingerbread and others, I am conscious that single parents have been hit very hard during this pandemic, and we know that 80% of them are women. As Chair of the Women and Equalities Committee, I am extremely interested in how well the CMS has coped with the many cases in which income has varied over the course of the pandemic. Of course, that means that variations will have to be efficient and quick. As parents come off furlough, it is possible for their income to go up as well as down.

We know that the strain on families during the pandemic has increased. I thank the Minister for the work that he is doing with victims of domestic abuse, and I thank my right hon. Friend the Prime Minister for the priority that he has given to that. It is important to reflect on the fact that not all domestic abuse is physical. Some of it is financial, and I have heard numerous times from constituents over the last nine months about the financial abuse they have suffered at the hands of ex-partners, and how the CMS has been drawn into that as variation after variation is requested and income is disguised. I have been privy to the emails from parents threatening, “Unless you agree to this figure, I will just keep asking for a variation so you get nothing.”

I congratulate the hon. Member for Motherwell and Wishaw (Marion Fellows) on securing this very important debate.

Given the immense pressure our welfare system has been under as a result of coronavirus, it is understandable that thousands of Child Maintenance Service staff were redeployed to help the team at the DWP to process universal credit applications and payments to meet the unprecedented demand during the pandemic. I thank them for all their hard work during this very difficult period. However, the Government neglected to consider the difficulties it would cause to single-parent households. In reducing the CMS to skeleton staff, children and single parents, 90% of whom are women, were left without protection. Hundreds of thousands of receiving parents are being left to struggle with missed payments that are not being chased up. Missed payments are spiralling into hundreds of millions and many families are now struggling to cope. Can the Minister tell us what plans the Government have to make up the backlog of receiving parents who have arrears owed to them, especially with the added financial difficulties due to the pandemic?

Last year, a survey of single parents conducted by leading charity Gingerbread uncovered the fact that three quarters of single parents have had—[Inaudible.] to food banks or charities to survive. Only 16% had received the full amount of maintenance they were due each month. On average, single parents are owed more than £9,000 in back payments. The Government need to get a grip on this situation urgently and ensure that parents who owe child maintenance pay their fair share.

We must remember that these families are already among some of the worst off. They are now forced to deal with cuts to this vital lifeline, often alongside further loss of income due to the coronavirus. In my own constituency of Liverpool, Riverside, a massive 40% of CMS cases in the collect and pay service are not currently in payment. This is broadly in proportion to the rest of the country, demonstrating a staggering shortfall in payments to single parents.

It is a pleasure to see the Minister back at the Dispatch Box.

I begin with some good news. As an MP of nearly 20 years’ service, I well remember the old unlamented Child Support Agency, which was cumbersome, bureau-cratic and highly formulaic. I remember receiving an absolute plethora of complaints from both mothers and fathers—I had people in my constituency in tears from both sides of the fence, if I can put it like that—because of the way the CSA worked, or rather, in many cases, the way it didn’t. If I speak as I find, I now receive far fewer complaints since the changeover from the Child Support Agency to the Child Maintenance Service. By and large, the CMS works far better than the CSA, not least because there is a different philosophy at work. Whereas the Child Support Agency compelled people to pay via a very strict and rigid formula, the philosophy with the Child Maintenance Service is, wherever possible, to encourage the people concerned to make arrangements between themselves for the benefit of their children. Most parents, even if their relationship has broken down, want to do their best for their children. The CMS encourages them to do exactly that, and in most cases it works well.

However, now for the less good news: where it goes wrong with the CMS, it goes horribly wrong. The CMS is particularly poor at pursuing parents—often, unfortunately, fathers—who wilfully refuse to pay. In many cases, they are not on a regular income under pay-as-you-earn, but adopt tactics such as becoming self-employed or registering as company directors in order deliberately to make their income as opaque as possible, not just to the taxman but to the Child Maintenance Service, so as to reduce their liability. I completely agree with the excellent Chairman of the Select Committee, my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes), who said, in effect, that that is utterly unacceptable.

As my right hon. Friend knows, I am not the Minister directly responsible for this matter—that is the noble Baroness Stedman-Scott—but I speak on behalf of the DWP today, and I want to respond to his point and to colleagues who are going to make further such points. I can assure him and other colleagues that the Minister concerned will, within 28 days, meet all colleagues who are raising specific cases brought to her by individual MPs.

The Minister has a deserved reputation in this place for being a thoroughly good chap. I am very grateful for that unequivocal answer. I shall certainly, on behalf of my constituent, take him up on his very kind offer, and then hopefully we can get justice for Miss Panza and her daughter.

Now that I have unmasked the problems of the CMS, I want to commend Gingerbread for all the very good work that it has done in campaigning to raise the profile of this issue for parents around the country who, for many years, have done nothing wrong—all they have done is to campaign to try to get the best for their children. In most cases, parents can sort these things out between themselves perfectly rationally, but where they cannot, and people wilfully refuse to pay, they need a more proactive and muscular CMS to hold those people to account. I hope that Gingerbread, by campaigning, can eventually bring that about. I am sure that the Minister will do whatever he can to facilitate it too.

I, too, begin by recognising the enormous challenges that have faced all parts of the DWP and, indeed, Government over the past 12 months. If ultimately more people in need got more help through redeployment, I can understand the difficulties that had to be faced. Like other MPs, I have been contacted by constituents who have experienced difficulties with reductions in payments. I welcome the commitment that calculations will be backdated. We must get back to normal service as soon as possible. I would like to make sure that the challenges and difficulties created by the pandemic do not mean that we forget the longer-term challenges, so, if I may, I will make some broader points.

We know that there are £350 million of arrears with the CMS, that £2.5 billion of Child Support Agency legacy debt is owed to children and that as much as £1.9 billion is due to be written off. Those figures alone tell us that we can and must do more. I do not know every single non-paying parent’s circumstances, but I am not willing to hold back on my criticism of parents who could pay but do not, for fear of upsetting those who cannot. Let me be clear that in my view not financially supporting your children when you could is completely and utterly reprehensible. If you do this, you are the lowest of the low, in my book.

I understand that various measures including imprisonment are available. We confiscate passports and deduct money from people’s wages, but the outstanding money shows that we need to go further. I want to pay tribute to the charity Gingerbread, which has worked and campaigned so hard on this issue. It says that in 2019 over 100,000 children went without payments while the Child Maintenance Service confiscated fewer than five passports and zero driving licences. I have heard from parents in my constituency who are not receiving the money their child is entitled to, and they have my full support. They want to see tougher action taken sooner, and so do I.

Order. The hon. Gentleman has exceeded his time and he really must conclude.

It is a pleasure to speak today, and I would like to thank the hon. Member for Motherwell and Wishaw (Marion Fellows) for securing this necessary debate. The pandemic has had a detrimental impact on child maintenance payments to families in need. Despite the efforts of frontline Department for Work and Pensions staff to handle the increased demand for support, the disruption to the Child Maintenance Service due to the pandemic has been vast. It is increasingly concerning that the understaffing of the CMS has left families struggling. Lack of action on missed payments has left families pushed to the brink of poverty, unable to provide for their children. At a time when families have seen a decrease in their incomes across my constituency, it has been difficult for separated parents to support their children, especially with the ceasing of action to provide missed payments.

On top of this, it has emerged that some parents, when submitting evidence, are having trouble proving that they have lost their job and therefore their vital income. Many of them are unable to make their payments. This is a complete shame. The Government have yet another item to add to their growing list of failures and incompetence in handling services during this time, despite the efforts of the staff on the ground. I have heard testimonies of parents being told that their P45 does not provide evidence of their unemployment or their inability to make adequate child maintenance payments. I have heard from already struggling families in Coventry who have told me about the lack of enforcement, because of a pause in the programme at the start of the pandemic. That has meant that they have had little financial support to assist with the upbringing and wellbeing of these young families. I have been told about glitches in the system whereby the CMS has not been able to locate parents on the HMRC system, despite parents having used the system in the past. There have been failures after failures, and families are suffering and paying the price for ministerial incompetence.

I congratulate the hon. Member for Motherwell and Wishaw (Marion Fellows) on securing today’s debate, and I was happy to support her application. It is clear from Members’ contributions so far that we all deal with a number of constituents’ cases regarding child maintenance payments. In just a year as an MP, I have dealt with several, so I am grateful for the opportunity to discuss the functioning of the CMS in Parliament today.

It is particularly appropriate to recognise the pressures that have resulted from coronavirus. There are pressures on the hard-working CMS staff, to whom I pay tribute. Like so many of us around the country, they will have had to get used to new ways of working. There are also pressures on parents in receipt of child maintenance, mostly one-parent families, as the economic impact of the pandemic threatens the livelihoods of many. The Joseph Rowntree Foundation’s excellent “UK Poverty 2020/21” report, published last week, makes that clear. Even before covid, there were huge pressures on one-parent families. They had the highest in-work poverty rate and they are also one of the groups who are most likely to have been especially impacted by covid-19. Single parents are predominantly women and are more likely to work in the sectors hardest hit by covid. They are more reliant on local jobs and are more likely to have struggled with childcare during lockdown. Four in five people in one-parent families are in receipt of income-related benefits.

I mentioned constituency cases and I want to highlight one in particular. This constituent contacted me right at the start of my time as an MP, almost exactly a year ago, and her case is shocking. Her former husband had evaded making any financial contribution to help her raise her two sons over an 18-year period and she was owed almost £30,000 of unpaid child maintenance. I am not intending to go into a blow-by-blow account of her dealings with the CMS in the past year. Thankfully, the debt has now been paid, and I am very grateful to Baroness Stedman-Scott for meeting me twice in the autumn to try to resolve the case. However, a few things stood out to me, and to my constituent, throughout this process that I wanted to draw attention to.