Iain Duncan Smith and Steve Webb repeatedly insisted that all the anxiety about charging mothers a fee to use the Child Maintenance Service was unfounded, as mothers would only pay a 4% fee on Collect and Pay, while fathers would pay 20% as an incentive for them to pay in full and on time and prove worthy to transfer onto Direct Pay.
This was a lie! If fathers fail to pay their full liability plus the 20% collection fee, the Child Maintenance Service deducts 20% from the underpayment before passing it to the mother and children. In the quarter ending September 2018 only 16% of “paying parents” on the “Collect and Pay” service paid in full. 37% paid nothing at all. 47% underpaid, meaning that 47% of mothers saw a 20% deduction in the (under)payment that they received.
The rationale for imposing fees to use the Child Maintenance Service was dishonest. The motivation was to deter mothers from using the statutory system and to increase child poverty among single mother families in order to prove that single mothers cause poverty and adverse outcomes for their children.
For the minority of mothers who managed to surmount all the obstacles set in their path and who applied to the Child Maintenance Service’s “Collect and Pay” service (or as I prefer to all it, “Don’t Collect and Don’t Pay”), the Government claimed it would charge collection fees of 4%, which it presented as an insignificant, trivial percentage. Meanwhile fathers would have to pay a whopping 20% to encourage them to pay regularly and on time, so that they could in time ask to be allowed to pay mothers directly.
Whilst many opponents of fees pointed out the inherent unfairness of deducting 4% from payments to mothers who had demonstrated that fathers would not pay voluntarily (there are significant barriers to the “Collect & Pay service”), I had a smidgeon of acceptance for the concept. Having received no maintenance at all for over a decade, I would prefer to receive 96% of my assessment rather than 100% of zero. But the charges were imposed along with the promise that processes in the new service would be more efficient and that enforcement would be better, which - as I show here - was a lie.
And then it occurred to me to ask what fees are levied where fathers underpay. As I don’t receive any child maintenance at all, I couldn’t look at my own case to find out, so I had to write a Freedom of Information request. The answer was worse than I imagined.
In reality, 4% is deducted when fathers are 100% compliant - that is, when they pay the full amount plus the 20% collection fee. However, where fathers are less than 100% compliant, the Child Maintenance Service deducts 20% of the amount paid before passing on the remaining 80% to mothers.
The Citizens Advice Bureau website explains what happens in the idea scenario where the father is fully compliant:
Both parents must pay a collection fee for using the Collect & Pay service. The Collect & Pay service is when the CMS works out the amount of child maintenance to be paid and collects payments from the paying parent and passes them on to the receiving parent.
The paying parent will have to pay a 20 per cent collection fee each time a payment is collected from them.
The receiving parent will have to pay a 4 per cent collection fee each time a payment is passed onto them.
Example
John is a paying parent and Beverly is a receiving parent. They have a Collect & Pay arrangement.
John must pay £100 a week in child maintenance. He must also pay a collection fee of 20 per cent on top of his weekly payment. This fee works out at £20 for each weekly payment. This means John must pay a total of £120 a week.
Beverly is due to receive £100 a week in child maintenance. The CMS charge a collection fee of 4 per cent each time John’s payment is passed onto her. This fee works out at £4 for each weekly payment.
After the fee is taken away, this means the CMS pay out £96 each week to Beverly.
Money Saving Expert website says the same:
“Parents were told to "agree on child support or face fines" as the Government introduced a 20% fee for parents who don't live with their child for using the service, with the other parent losing 4% of the money received from August.
So a non-resident parent using the CMS now pays £20 on top of every £100 of child support, while the parent living with the child only gets £96 of that sum.”
But what happens if John, like most fathers subject to Collect & Pay, pays nothing or pays less than the £120 he is told to pay? The CAB doesn’t consider that scenario. Perhaps it has such confidence in the Child Maintenance Service that it assumes full payment by fathers.
Certainly, the Government has given the impression throughout that mothers lose just 4% of any payments.
On 23 March 2011 Maria Miller took part in a NetMums web chat, telling mothers:
“I hope that the changes we are making will encourage more ex-partners, such as the one you describe, to think again about being 'non-compliant' and realise that this is not a responsibility they can avoid any longer. That's why the balance of charging will still fall more heavily on the non-compliant parent.”
On 15 June 2011 Maria Miller gave evidence to the Work and Pensions Committee. Labour MP Kate Green asked her:
“Have you considered a situation where a parent with care, despite her best efforts, simply cannot persuade the non-resident parent to make a voluntary arrangement? In those circumstances, a low-income parent with care should be exempt from charges.”
Maria Miller falsely reassured the Committee:
“We looked very carefully at how you structure a charging scheme to make sure that we have fairness. Again, I would remind the Committee that it is our very clear proposal that the balance of charges should always be more heavily on the non-resident parent than the parent with care, for the very reason that you are talking about: we want to make sure that there is a very clear incentive for the non-resident parent to come to a voluntary agreement. That may well be to use Maintenance Direct, quite a formal and structured way of passing money between families at breakdown. There is no charge involved at all. It can be done free of charge once the parent with care has made an application, and the Agency can come in at any point that those payments stop being made and sweep up that case into the statutory system and actually enforce any arrears as well. There are very clear options there for parents to be able to come to arrangements without any costs involved. The charging will always fall more heavily on the non-resident parent, hopefully to dissuade them from being difficult and not taking their responsibility in the way that you suggest.”
On 28 November 2011 Lord De Mauley told Peers: “In the new child maintenance scheme, it is proposed that ongoing collection charges are payable by non-resident parents on top of the maintenance due where it is necessary for the maintenance to be collected using the collection service. The amendment ensures that any charges payable by non-resident parents can also be deducted directly from their benefit payments or universal credit, where this is appropriate.”
Baroness Tyler, the Chair of Relate, warned:
“Sir David Henshaw, back in 2006, came up with the report that is often cited as being the genesis of the idea of charging. We have heard his name referred to on a number of occasions as his policy has been explained. Sir David Henshaw himself recognised the limits to charging when he said: "I do not want to create a disincentive to use the service for those parents who have no other option for agreeing maintenance". We know, because DWP estimates tell us, that about half of all eligible families have no child maintenance arrangements at all. The danger is that even more children in poorer families will go without child maintenance as a result of the proposal to charge the parent with care. This is my final point, which I want to link to the one I made on the previous group of amendments. Not only will the children be worse off-we have heard some graphic and moving accounts of the real hardship that some children could be in - but more will grow up without a role model of a father who contributes, however modestly, to the cost of raising his own children.”
On 28 November 2011 Lord McKenzie took issue with the Government’s repeated misrepresentation of Sir David Henshaw’s 2006 report into reforming child maintenance:
“It has been suggested that what the Government are bringing forward is just based on the previous Government's proposals, but that is not so. It is absolutely correct to say that charging is permitted under the 2008 legislation, which is supported by the noble and learned Lord, Lord Mackay. But that is enabling legislation like so much of this Bill. It certainly did not envisage proposals such as those advanced by the coalition Government. It should be recognised of course that there were charging arrangements under the original 1991 legislation, but I believe that that was stopped in 1995 because the CSA was not delivering. Our position on charging is clear. It is reflected in the White Paper entitled, A New System of Child Maintenance, dated December 2006. It cites in part what the noble Baroness, Lady Tyler, has just said and makes reference to Sir David Henshaw. Paragraph 5.48 states: "We recognise the importance of having a charging regime that does not dissuade vulnerable and low-income parents with care from seeking maintenance in the first place. Therefore, the future charging regime will be based on three clear principles. First, that the charging structure should incentivise non-resident parents to meet their responsibilities. Second, that the clear burden of charging should fall on the non-resident parent and not the parent with care. Third, that cost recovery for C-MEC should never be prioritised above payment of outstanding debt for the parent with care".
On 25 January 2012 Lord Mackay, a former minister in Margaret Thatcher’s and John Major’s cabinets, a staunch Presbyterian, and hardly a natural rebel, led a revolt in the House of Lords against charging mothers to use the replacement statutory service. The bill was sent back to the House of Commons and later returned to the House of Lords with fees substantially reduced. The application fee for mothers, originally planned to be £100, was reduced to £20, and the ongoing collection fee, where a mother “chose to depend on the state” rather than “take responsibility” and “consider what’s best for children”, was reduced from 12 percent to 4 percent for the so-called Collect and Pay service. Non resident fathers would be charged 20% as an incentive to pay in full and on time, and in due course be allowed onto Direct Pay, which incurs no collection fees.
The Government really had no allies other than the Centre for Separated Families (fraudsters and fathers’ rights extremists implacably opposed to the very concept of child maintenance obligations), Families Need Fathers (generally hostile to a statutory system) and the Centre for Social Justice (the same individuals who came up with the reforms in the first place). Even Relate, which was understandably enthusiastic about improved support services to help separated parents collaborate, was extremely critical of the proposal to charge parents for using the statutory service which would replace the Child Support Agency.
On 1 February 2012 Maria Miller lied to the House of Commons that:
“The levels of charges will always disproportionately sit on the non-resident parent. Why? Because it’s important that we always have an incentive there for people to be able to come to an arrangement.”
In July 2012 Iain Duncan Smith presented to Parliament “Supporting separated families, securing children’s futures”:
“The collection service will levy a 20 per cent fee on the non-resident parent. Currently, for a positively assessed case with an average liability of £33.40, this would amount to £6.68 per week, which would create a strong incentive for them to pay directly to the other parent in full and on time.”
The paper failed to mention that if the father refused, for example, to pay the £6.68 fee, but did agree to pay his liability of £33.40, the Child Maintenance Service would deduct 20% - £6.68 - and only pass on £26.72 to the mother.
On 4 September 2012 Maria Miller, having done such a sterling job passing the controversial child maintenance reforms through Parliament, was rewarded with Cabinet posts as Minister for Culture and - irony of ironies - Minister for Women and Equalities.
Following Maria Miller’s promotion, Steve Webb, the Minister for Pensions, took over responsibility for child maintenance. Although a Liberal Democrat MP, he was an evangelical Christian with links to the British Religious Right, including both Lyndon Bowring of CARE and Rob Parsons of Care for the Family, the fundamentalist Christian charities covertly driving the child maintenance reforms through Samantha Callan, Iain Duncan Smith’s Personal Adviser. As a safe pair of hands, Steve Webb could be trusted with the underlying Christian Right agenda of sabotaging the Child Support Agency in order to make single mother families poorer.
On 24 October 2013 the Department for Work and Pensions submitted written evidence to the Work and Pensions Committee:
“We also intend to introduce collection fees where parents choose to use the Child Maintenance Service to collect and pass on payments. Having carefully considered the views of interested parties, we propose to set these fees at four per cent for the parent with care and twenty per cent for the non-resident parent.
These proposed collection fees reflect the fact that both parents have a role to play in setting up an effective, collaborative child maintenance arrangement. However, the charge on the non-resident parent is higher, as we recognise that whether or not child maintenance is paid directly by the non-resident parent to the parent with care is initially in the hands of the non-resident parent unless there is evidence that the non-resident parent is unlikely to pay.”
On 27 November 2013 Steve Webb told the Work and Pensions Committee: “One of the points of the new system is that if we are on a heavy-duty enforcement case, the person who we call the paying parent—who in this case is not paying—is facing a 20% mark-up on their maintenance and has to pay towards the enforcement action that we take. So there will be a much heavier incentive for that person to say, “Look, I don’t want all this extra cost and I don’t want to have to pay for the enforcement”.
Labour MP Debbie Abrahams was concerned that the Impact Assessment had not considered what impact charging might have on child poverty. Steve Webb lied that 96p in the pound would go to children while “the paying parent faces a 20% whack on that and so has this ongoing incentive to do payment direct.” He insisted this would reduce rather than increase child poverty.
Liberal Democrat MP Stephen Lloyd was disappointed that the Government had disregarded the Work and Pensions Committee’s recommendation that mothers should not be charged if they had tried their best to make a family based arrangement.
Steve Webb argued that it was better to receive “96% of a worthwhile amount instead of zero”.
Susan Park, Child Maintenance Group Director, added: “We would only take that 4p in the pound if money was flowing.”
What both Steve Webb and Susan Park failed to admit was, of course, that if fathers fail to pay the 20% charge and under pay, 20% is deducted from the payments passed on to mothers.
So, to stretch Steve Webb’s feeble analogy of quibbling over a drop left in a wine glass, if the wine glass is only poured half full, the Child Maintenance Service takes a rather large swig before handing the depleted glass to the mother.
Labour MP Sheila Gilmore asked whether the 20% fee might further deter fathers from paying. Steve Webb retorted: “If someone is making life difficult for their children, and for us, and costing the taxpayer money, then why shouldn’t they pay?”
What he failed to admit, as he squirmed in his seat, was, if the Child Maintenance Service refuses to use its enforcement powers to force full payment from a habitual under payer, then the CMS makes the mother and children pay for the failure of both the CMS and the father.
On 4 February 2014 Lord Freud told the House of Lords:
“We have reduced the parent with care collection fee from the proposed “7 to 12%” to 4%. By reducing the fee to 4%, we have shifted the balance in favour of the parent with care even further so that it stands in a one-to-five relationship with the 20% non-resident parent fee. It is also charged only on money actually collected. It is the non-resident parent who faces by far the highest charges, reflecting the fact that they have greater control over whether they use the collection service. We believe that both parents should make a financial contribution towards the cost of the service. The proposed fees will bring in revenue of £170 million per year.”
Steve Webb’s Department for Work and Pensions press release on 30 June 2014 said:
“The paying parent will pay a 20% surcharge of the maintenance assessed and the receiving parent will pay 4% of the amounts received.”
So, if Steve Webb had told the truth, the following scenario would apply:
John must pay £100 a week in child maintenance. He must also pay a collection fee of 20% on top of his weekly payment.
This fee works out at £20 for each weekly payment. This means John must pay a total of £120 a week.
But John pays just £50 a week to the CMS.
The CMS charge a collection fee of 4% each time John’s payment is passed onto her. This fee works out at £2 for each weekly payment.
After the fee is taken away, this means the CMS pay out £48 each week to Beverly. Each week that John under pays, his arrears mount by £50 owed to Beverly and £20 owed to the CMS.
On 7 December 2016 Caroline Nokes told the Work and Pensions Committee:
“We charge £20 for people to go through the Child Maintenance Options, and where we use collect and pay, where a receiving parent has not received maintenance and they choose to go through the collect and pay option, we charge a 20% collection fee on top of the maintenance owed and a 4% fee to the receiving parent. The breakdown is very straightforward.”
The response to my Freedom of Information request, below, shows that if John only pays £50 to the CMS, it passes just £40 to Beverly. Because of his underpayment, she effectively pays a 20% fee. Technically, John still owes Beverly and the CMS, but, as I show elsewhere in this website, the CMS is implacably opposed to using its enforcement powers and it is vanishingly unlikely that John will face any adverse consequences for his underpayment.
The DWP told me:
“The collection charge of 20% to the paying parent is automatically deducted on receipt of payment. In cases where the paying parent fails to pay the full amount due, the charges will be applied proportionally to the amount that is actually paid.
For example:
A non-resident parent is assessed to pay £100 per week in child maintenance, plus a £20 per week collection charge. However, in this example, instead of paying £120 the paying parent only pays £50.
To work out the amount that should be attributed to charges, we look at what share the original £20 charge is of the original total of £120 - 16.68% in this case. Therefore, in proportion, the paying parent’s charges in a total payment of £50 would be £8.34 (16.68% of £50). This leaves £41.66.
The 4% charge is then applied to the £41.66 balance. In this example, the receiving parent would therefore receive £40 in total.
Out of the original £120 liability, this leaves a remaining balance of £70 in arrears and which is still due to be paid, of which £56 is owed to the receiving parent and £14 to the Department.
The legislation used to make this calculation is found in Regulation 7 (2) & (3), and Regulation 8 of the Child Support Fees Regulations 2014 (link below).
http://www.legislation.gov.uk/ukdsi/2014/9780111106365/contents”
Section 7 of the Child Support Fees Regulations 2014 say this:
“The amount of the collection fee payable by a person in receipt of child support maintenance is 4% of any payment of child support maintenance in relation to which there are arrangements for collection, which the Secretary of State has collected and which would otherwise be paid to that person.”
Regulation 8 says: “Any amount of the collection fee payable by a non-resident parent under regulation 7 (the collection fee) may be recovered by the Secretary of State from any payment made by that non-resident parent to the Secretary of State.”
So, Steve Webb lied in his Department for Work and Pensions press release on 30 June 2014, when he claimed that:
“The paying parent will pay a 20% surcharge of the maintenance assessed and the receiving parent will pay 4% of the amounts received.”
If he had been telling the truth, he would have said:
“The paying parent will pay a 20% surcharge of the maintenance assessed, but if he fails to do so, or if he pays less than than the amount of maintenance assessed, the receiving parent will pay 20% of the amounts received.”
The DWP subsequently told me that during the quarter ending September 2018, 37% of non-resident parents on “Collect & Pay” paid no maintenance at all, 47% paid some but not all, and only 16% paid their full liability plus their 20% admin fee.
So it transpires that the 20% collection fee, supposedly an incentive for fathers to pay in full and on time is no incentive at all but only serves to further punish almost half of the mothers and children relying on the “service”.
The only place I have found that says the Child Maintenance Service retains a 20% collection fee even if the father under pays is the website Dad.Info, which was run by Matt Buttery, an evangelical Christian and one of Samantha Callan’s inner circle. He was also on the Expert Steering Group for child maintenance reform.
Single parent charity Gingerbread has consistently opposed collection fees for both mothers and fathers. Giving evidence to the Public Accounts Committee on 9 July 2014, Caroline Davey of single parent charity Gingerbread said:
“Only once someone has demonstrated that they will not pay voluntarily through direct pay will they be able to be moved into the collection service. At that point, we think a 4% deduction from essentially the child for their non-resident parent’s failure to pay is completely punitive and serves no purpose. One might argue, and we have joined with James in saying that the 20% collection fee for non-resident parents is quite a blunt tool and is quite a high amount and one must not count against there being the risk of a reaction against the single parent if they are faced with an additional 20% fee on top of the existing maintenance amount. But at least there is logic to that: all of those parents would be offered the chance to pay voluntarily and if they do not pay voluntarily, they get the fine—that is in their gift, to a greater or lesser extent. For a single parent and a child, who are entirely dependent on the other parent to pay, having 4% taken from their payment feels very harsh.”
Later in the session, Sir Robert Devereux, Permanent Secretary in the Department for Work and Pensions, gave evidence.
Labour MP Austin Mitchell accused him of taking bread from the mouths of children.
Sir Robert told the Committee that mothers would receive 96 per cent of their entitlement after a 4 per cent fee was deducted - a small fee, he insisted, that bore no relation to the true cost to the tax payer of running the statutory service.
Of course, what I have found is that, such is the resentment and disgust at tax payers having to pick up the tab for the mess made by single mothers’ feckless sex lives, that the DWP is in fact deducting 20 per cent rather than 4 per cent from mothers if fathers fail to pay the collection fee themselves.
On 7 December 2016 Caroline Nokes, Minister for child maintenance, misled the Work and Pensions Committee:
“We charge £20 for people to go through the Child Maintenance Options, and where we use collect and pay, where a receiving parent has not received maintenance and they choose to go through the collect and pay option, we charge a 20% collection fee on top of the maintenance owed and a 4% fee to the receiving parent. The breakdown is very straightforward.”
Baroness Sherlock seemed to have an inkling:
“I want to understand the point of this charging. If we think it through rationally for a moment, if the aim of the new system is to encourage absent parents to pay up, the logical thing to do would be to charge them if they do not. Why then would one charge the parent with care? The only possible reason to do that would be to deter them applying to the CSA in the first place, because as the noble and learned Lord, Lord Mackay, explained so clearly, the parent with care can do nothing to affect the outcome the Government say they want. Therefore to penalise her for failing to do so would obviously not be fair, so that cannot be the aim. Will the Government please explain to us what is the aim of charging the parent with care? I want to discuss two other things. I want to share a quote I found from a former Minister who said:
"Government too must be concerned to see parents accept responsibility for their children. For, even though marriages may break down, parenthood is for life. Legislation can't make irresponsible parents responsible, but it can and must ensure that absent parents pay maintenance for their children".
I am sure that the noble Lord, Lord Newton, will recognise that that was said by the noble Baroness, Lady Thatcher, when she was Prime Minister, in July 1990 to the 300 Group at the Savoy hotel. She went on to explain why the Government were setting up the CSA in the first place and pointed out that only one-third of lone parents were getting any maintenance at all and that most of them were not getting it regularly, as I was aware from other sources. We have all heard lone parents say that if they could do private arrangements they would. The whole point of the agency is to deal with people who cannot make private arrangements. Therefore, if charging them 12 per cent of the money that currently goes to children and handing that over instead to the state does not deter them, what will?”
In August 2017 Work and Pensions Secretary David Gauke presented to Parliament a 30 Month Review of Charging for the Child Maintenance Service, which falsely stated that:
“The four per cent charge is only ever deducted from maintenance that is actually paid to the receiving parent.”
On 14 December 2017 the Department for Work and Pensions launched a consultation on its “Child Maintenance: a new compliance and arrears strategy”, and on 12 July 2018 it published the Government’s response to the consultation. Both documents contained a “Glossary of Terms” which describes “Collect and Pay” thus:
“Service type offered by the CMS, whereby the CMS calculates the maintenance liability, provides a payment schedule, and facilitates transmission of payments between the clients. A collection fee is incurred by both clients. A 20% fee for the paying parent is added to the liability as it accrues, and a 4% fee is deducted from any money paid out to the receiving parent.”
Yet again, this is false.
On 26 September 2018 the Department for Work and Pensions released “experimental” statistics for the Child Maintenance Service from August 2013 to June 2018, which say:
“As parents working together is better for children, the Child Maintenance Service encourages parents to collaborate by applying collection charges for using the Collect & Pay service. Paying Parents are charged 20% of their child maintenance and Receiving Parents 4% to use the Collect & Pay service.”
On 30 October 2018 the Child Support (Miscellaneous Amendments) Regulations 2018 were discussed in the House of Lords. Lord Kirkwood and Baroness Sherlock asked why the compliance rate on the Child Maintenance Service’s Collect and Pay service had been static for the past two years at just 57%.
The Government’s new Beta website for the Child Maintenance Service says that under “Collect and Pay”, “you’ll need to pay:
a 20% fee on top of your regular child maintenance payment if you’re the paying parent
a 4% fee from your regular child maintenance payment if you’re the receiving parent”
Even the media have swallowed the lie that mothers only pay 4% collection fees.
On 21 May 2014 the Guardian reported:
“The government has defended its new system for child maintenance, which threatens to charge thousands of single parents unless they reach an amicable agreement with their former partners over payments. Under the new incentive scheme, non-resident parents – usually fathers – pay a 20% fee on their child maintenance payments, with the other parent losing 4% of the money received.”
On 15 October 2015 Guardian columnist Polly Toynbee reported:
“The CMS charges mothers £20 – and if fathers don’t pay, they get their earnings attached plus a 20% extra penalty collection fee. Outrageously unfairly, mothers also get 4% docked off the sum to pay collection costs.”
And sympathetic MPs are still being systematically lied to by the Government and the Department for Work and Pensions. The Scottish National Party MP, Marion Fellows, has been campaigning for the unfair 4% charge on mothers to be dropped, little realising that more often than not the charge is 20%.
Child Maintenance Options continues to lie to parents. This blog page was accessed on 23 March 2019.
