New powers will expand the list of companies and organisations required to provide information to the CMS which will help the service trace the paying parent, calculate maintenance and enforce arrears more effectively.

To make it easier for companies to respond quickly and securely, the process is now being simplified so information can be passed on by secure digital means instead of compulsory in-person visits from CMS inspectors.

Child maintenance is money to help pay for a child’s living costs if their parents don’t live together. It’s paid by the parent who doesn’t usually live with the child to the person who has most day-to-day care of the child.

Some separated couples make a private child maintenance arrangement, but others use the CMS to make formal agreements. The CMS can be used if the parents can’t agree an arrangement or don’t want to have direct contact with the other parent. The CMS replaced the Child Support Agency in 2012.

Following responses from children’s charities, parents and interested organisations, the government has published the details of the new powers in its response to the consultation on the CMS.

Baroness Stedman-Scott, DWP lords minister, said: “At the heart of these changes is our commitment to making sure children get the financial support they need to have the best start in life.

“We’re bringing the service into the modern age, removing barriers that can slow down cases and prevent money reaching children.”

The CMS collected or arranged £1bn for children over the past 12 months. The government says child maintenance payments help lift about 120,000 children across the UK out of poverty each year.

Plans for future changes when the legislation timetable allows will include unearned income in child maintenance calculations. It will also extinguish small volumes of low value debt (£6.99 and under) where the maintenance calculation has ended but there remains an outstanding debt, but the value of the debt is substantially less than the cost of collecting it.

It will also stop trying to collect arrears where child maintenance has been deducted from a parent’s earnings and their employer has gone into administration, and the outstanding arrears can no longer be recovered.

A report by the National Audit Office (NAO) earlier this month found that there has been an increase in the number of separated families without any child maintenance arrangement in place. The NAO reported that the estimated proportion of separated families without any child maintenance arrangement nearly doubled from 25% in 2011/12 to 44% in 2019/20.