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Report on Closure of Old Child Maintenance Schemes Published

The National Audit Office recently published the findings of its investigation into the Department for Work & Pensions’ closure of its 1993 and 2003 child maintenance schemes.

Problems of ‘Child Support Agency’ Schemes

It highlights that the 1993 and 2003 ‘Child Support Agency’ schemes struggled with IT problems leading to poor customer service, backlogs and incomplete information about amounts due. 

The 2012 child maintenance scheme was introduced to resolve these problems and encourage private arrangements, and since November 2013 all new applications have been made to this scheme.

Investigation Findings

The key findings of the investigation include:

It is taking the Department longer than expected to close 1993 and 2003 scheme cases. By September 2016 the Department had closed 33% of active cases against an expectation of 50%. The number of cases where the Department needs to finalise arrears before closure had grown to 163,000 by September 2016.

Fewer parents than the Department originally expected are applying to the new scheme when their 1993 and 2003 scheme cases are closed. The Department estimated that 63% of parents who had their active case closed would apply to the 2012 scheme, but only around one-fifth of parents with cases closed by April 2016 had done so. Three months after case closure around half of parents have no arrangement in place, compared with the 16% originally expected.

The Department has assessed that around three-quarters of the £4 billion arrears balance is uncollectable. It has not yet set out how it will manage the £3 billion of uncollectable arrears.

Since 2012 the Department has reduced its overall enforcement actions to recover arrears on the 1993 and 2003 schemes, in excess of the reduction in case volumes. When a parent owes arrears the Department can deduct up to 40% of their salary after tax, using a deduction from earnings order. It issued 69% fewer orders between 2012-13 and 2015-16.

Response to the Report

Single parent charity Gingerbread has welcomed the findings of the investigation.

“The Government’s approach to winding down the CSA is a smokescreen for a desire to turn the page on the past,” commented Janet Allbeson, senior policy adviser for Gingerbread. “Too little was done in the past by the CSA, and now too little is being done by the new Child Maintenance Service to collect outstanding debts.”

“The Government says it is offering receiving parents a “fresh start” by suggesting they write off the debts their children are legally entitled to; but as the NAO point out, there is no parallel suggestion to paying parents that they too make a fresh start by paying off the arrears they owe,” she said.

“In light of the new report, we urge the Government not to abandon CSA maintenance still due to single parent families, and to provide more clarity on progress,” she added. “This is money that can make a real difference to children’s lives.”

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