The government’s Child Maintenance Service (CMS) has “delivered improvements and reduced costs”, according to the National Audit Office (NAO), but it noted some concerning points about the scheme.

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.

Further, while improvements have been made to the ‘Collect & Pay’ arrangement – where the Department for Work & Pensions (DWP) handles the CMS calculations and transfers money – at least half of paying parents still do not pay, pay less than they should, or pay late.

And while DWP has improved enforcement action for non-paying parents, the NAO said it can still take years before CMS arrears are paid.

But it noted that errors in assessing child maintenance due has reduced, from 2.17% of the monetary value of assessed payments in 2015/16 to a record low of 0.65% in 2020/21.

It also highlighted that the cost to the taxpayer has decreased 40% in real terms between 2011/12 and 2020/21 to £322m.

Child Maintenance Service

The NAO, which scrutinises public spending for parliament and holds the government to account, said it launched its study of CMS as it receives more correspondence on this area than any other single issue.

There are an estimated 3.6 million children from 2.4 million families in the UK where one of the parents does not live with the child. CMS is an arrangement between parents or guardians to cover the child’s living costs.

This can be either a private ‘family-based arrangement’ between the parents, or made through the statutory CMS run by the DWP.

CMS offers Direct Pay – where a fee is charged for the calculation of child maintenance payments, but parents arrange the transfer of funds between themselves – and Collect & Pay, where DWP charges more to calculate the payments, collect the money and transfer the money to the receiving parents.

Most parents who pay child maintenance are men and most parents who receive child maintenance are women.

Private family-based arrangements

In 2012, CMS was reformed to encourage separated parents to create private family-based arrangements, decrease the use of CMS, thereby reducing the cost to the taxpayer.

The NAO noted that the take-up of family-based arrangements had increased from 29% in 2011/12 to 38% in 2019/20. And take-up of the statutory arrangements had fallen as anticipated, from 46% in 2011/12 to just 18% in 2019/20.

But it said that affordability considerations “limit the department’s ability to collect payments from parents on low incomes and on benefits”.

Low-income paying parents are more likely to build up arrears than the higher paid: 46% of paying parents using the CMS do not earn enough to pay income tax (£12,570 in 2021/22), but these parents represented 62% of those with arrears as at March 2021.

Maintenance arrears can build up, so on average parents owed £2,200 before civil enforcement action was taken and £2,600 afterwards.

Overall, the NAO recommended for DWP to increase its understanding of why fewer than expected people are using the CMS; assess the affordability and interaction of child maintenance with the welfare system; improve the effectiveness of Direct Pay and Collect & Pay arrangements and review its write-off strategy for unpaid maintenance payments.

Gareth Davies, the head of the NAO, said: “Government has succeeded in its goal of reducing both its involvement in child maintenance and the cost to the taxpayer, but its reforms have not increased the number of effective maintenance arrangements across society. Many separated parents are still left without the maintenance payments they are due.

“Welfare and child maintenance rules need to align much better to support government’s wider objectives of addressing poverty and helping people into work.”

‘CMS failing to reach families it should be protecting the most’

Victoria Benson, chief executive of Gingerbread, the charity for single parent families, said: “The report highlights systemic failings that mean children are going without – we already know too many single parent families are living in poverty. Perhaps most telling is the simple acceptance of the fact that, short of writing debts off, there is no way for government to avoid maintenance arrears rising to £1bn by 2031. This clearly shows that there are fundamental flaws in the CMS that need to be tackled.

“Worryingly, the report reveals the number of families with no child maintenance arrangement in place has almost doubled since the CMS was established, and this is affecting children in some of the poorest families and those experiencing higher levels of conflict. This raises a red flag that the CMS is failing to reach many of those families it should be protecting the most.

“It’s clear that urgent changes need to be made to ensure the child maintenance system is fit for purpose and works for those who need to use it. Without reform more single parent families will experience poverty and more children will be exposed to ongoing disadvantage. Single parents and their children should be supported to thrive because of their family make up – not in spite of it.”

A DWP spokesperson said: “The CMS puts children first – in the last 12 months a record £1 billion was collected and arranged through the service. Child maintenance payments help lift around 120,000 children out of poverty each year.

“More than a third of separated parents make their own arrangements without any government support which is better for families and the taxpayer, allowing CMS to focus on supporting parents where that arrangement wouldn’t work or those who won’t pay.”