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Child Maintenance – Third Generation – How is it going?

The latest quarterly statistics on use of the Child Maintenance Service (CMS) make for interesting observations.  For example, they show that by 31 August 2014 there has been a 38% drop in applications to the CMS since May 2014. What are the reasons for that?

It is very hard to be precise as it is still early days in the new scheme, with new changes being introduced as to the operation of that scheme within the quarter; it would seem to be too soon to be confident in any trends.  However the changes in that period which may go to explaining the drop include the £20 application fee for new cases, introduced on 30 June 2014.

Then, on 11 August 2014 the CMS introduced their ‘Collect and Pay’ charges where the parent paying maintenance is charged a fee of 20% of the maintenance payable on top of the maintenance each month and the parent receiving maintenance is deducted a fee of 4% from their maintenance.  This means that where maintenance of £100 is to be paid, the paying parent pays £120 but the receiving parent gets £96.  £24 a month will go to the CMS in charges.

This reduction in applicants is more than triple the reduction that the DWP expected.

On 10 October 2014 the House of Commons Committee of Public Accounts published their summary of the Child Maintenance 2012 Scheme: Early Progress.

The reduction in applicants seems to be at odds with an observation in this report:  Each new applicant is required to have an initial discussion with Child Maintenance Options (called the ‘gateway’ call) to see whether they still feel the statutory service is what they need or want.  The survey of gateway calls with CMO found that the number of parents intending to choose family-based arrangements reduced by more than a third from 5,540 in August 2013 to 3,590 in March 2014.   However, DWP believes this is a temporary phenomenon which is the result of the gateway conversation being made mandatory; they expect the position to change over the next 12 to 15 months.

Gingerbread in particular are noted for their belief that the Department had been unrealistic about the number of parents who would be able to make their own arrangements.  The real issue then, is whether those not making family based arrangements are also those who appear to be put off the statutory scheme by the fees and are therefore potentially going without any maintenance arrangements in place.

It is early days, and some parents may go on to apply to the CMS.  It will be very important for the service to watch over time whether those contacting Child Maintenance Options are getting maintenance in place one way or another.

The full documents can be found at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/359363/2012-child-maintenance-scheme-experimental-statistics-september-2014.pdf  and  http://www.publications.parliament.uk/pa/cm201415/cmselect/cmpubacc/455/455.pdf