The cross-party Work and Pensions Committee has launched a new inquiry into the child maintenance payment watchdog, which facilitates and enforces payments between separated parents to help pay for their child’s day-to-day care.
The inquiry will examine how to boost the Child Maintenance Service’s effectiveness in increasing payment compliance rates, improve the way it deals with families, how maintenance payment levels should be set, and the impact of the Government’s proposed changes to Direct Pay and Collect and Pay.
Over 1 million children are in the CMS system, of which 760,000 are managed by them in cases where the parents have been unable to agree on payments between themselves.
A Department for Work and Pensions survey published in June says that around 2 in 5 of receiving parents report non-compliance with payments, while in 31% of Collect and Pay cases, impacting 70,000 receiving parents, no payments were made at all between January and March.
New rules to be scrutinised
The government’s proposals to abolish Direct Pay and reform Collect and Pay will also be scrutinised in the inquiry. Direct Pay is the current default plan where the CMS sets payment levels and schedules for parents who then organise payments privately, but where the body does not have enforcement powers.
Instead, cases will move to Collect and Pay, where the CMS acts as a middleman between paying parents. This process will undergo a fee restructuring to come into force in 2027-28.
Compliant and receiving parents will be charged 2% of their child maintenance to use the service. Currently, charges are set at 20% for paying parents and 4% for receiving. 20% will remain the charging rate for paying parents who fail to comply with their payment plans.
“Millions of children and parents are served by the Child Maintenance Service, which has a key role in ensuring mediation between parents, so that the best interests of the child are being met,” said Committee Chair Debbie Abrahams.
“However, there are concerns over how it calculates payments, how it handles people who have sometimes been through long ordeals, and over its enforcement. Increasingly, we’re hearing as MPs from people about how unhappy they are with how they have been treated by the service. This applies to both paying and receiving parents.”
Abrahams said the inquiry will explore each of these topics to check the service’s performance, but also to examine how improvements can be made, and we want to hear from anybody with expertise or experience in it.
“The start of the summer holidays comes with the extra costs of childcare, naturally bringing family finances into sharp focus. Ensuring the service is working effectively is essential as it would help alleviate some of the stress, not just caused at this time of year.”
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