Oral evidence: Child Maintenance Service, HC 74

Oral evidence, 14 October 2026.

Witnesses

Dr Samantha Callan OBE, Elisabeth Cooper and Michelle Counley.

Chair

A very warm welcome to the second oral evidence session for this inquiry into the Child Maintenance Service. Today we are very lucky to be joined by our first panel: Elisabeth Cooper, who is a barrister from St John’s Chambers, Dr Samantha Callan, who is a co-founder and Director of the Family Hubs Network, and Michelle Counley, who is joining us virtually from NACSA, the national child support advisory service. Thank you again. If you have any technical issues, wave and we will make sure that we are aware of those. I will start the questions. I wonder if you could outline to the Committee the support that the Child Maintenance Service provides to parents to make an initial child management arrangement, what that is, how effective that support is, looking at both the family-based arrangements but also statutory arrangements. Who would like to start?

Dr Callan

I will start. On family-based arrangements, the 2012 scheme was I would not say pushing but really hoping that as many parents as possible would undertake family-based arrangements. In many ways, it keeps you out of the complications of somebody else being involved in your finances, if at all possible and fair. The types of support are things like information about options and guidance on the different ways to arrange child maintenance.

Chair

Is that in person? Is it online? Is it by phone?

Dr Callan

That is a very good point. It is pretty much all online and you can ring. One of the main points I want to make is this is such a contested, difficult subject, whether you are on a family-based arrangement and you have somehow managed to make that work or you are going for the statutory service, which is currently direct pay and collect and pay. I know that the Government are planning to legislate to put everyone into collect and pay who does not want to make a family-based arrangement. There are all sorts of online tools and an explanation if you are trying to get the advice before perhaps going into the CMS proper. The problem is you have two people; you have two very different customers. The CMS treats both as customers but they both have different ways of grading whether the outcome is acceptable or not. You can help people create an arrangement and come to an agreement, but it is the sustaining that is the difficult thing. There is no help in the current system to sustain an arrangement and things are subject to change. Emotions are subject to change. Circumstances are subject to change. Yes, there are variations that can be made, and you can submit a change of circumstances all through an online or a phone system, but it is very mechanical and harsh, despite the fact that DWP is trying to develop trauma-informed systems.

Elisabeth Cooper

I would add that there is an online calculator that is usually the first port of call for most service users, which is as a starting point helpful for them to get an idea of what their obligation is. But it is quite simplistic and does not deal with the more complicated cases. If you are a PAYE earner, then it is great, but if you are or you are the receiving parent of maintenance from somebody who has a company and receives dividends, for example, then there is an issue because the online system and the information online does not make it clear that the CMS does not, as a starting point, take dividends into account in the initial calculation. With both receiving parents and paying parents I have situations where you get an absurdly low calculation based on what is inevitably a PAYE income set below the tax threshold. Then the receiving parent does not understand why, when they are clearly far more wealthy than earning £12,500, for example. What the current system requires you to do is to make a variation application for dividends or other unearned income to be taken into account. That is some months potentially down the line. That is not backdated to the original date of the calculation. That is only dated to the date of the application for variation. It depends when that receiving parent, for example, suddenly obtains the knowledge that they actually need to make that variation.

Chair

Are there any other anomalies, Elisabeth? You have mentioned dividends. Is that fairly regular? Are there any other non-regular forms of payment that are making this difficult for a realistic calculation of income?

Elisabeth Cooper

Yes. Rental income, for example, depends on the classification of the tax paid on rent as to how it is then input into somebody’s tax return, and then whether or not the CMS takes that into account as rental income or other unearned income. Anything that falls into something that is not salary, effectively—including, for example, payments made by way of directors’ loan accounts or shareholders’ loan accounts that are ostensibly loans but could be characterised as income, depending again on the treatment of that for tax—falls outside of that very straightforward calculation that the calculator enables you to access online.

Chair

Thank you very much. Michelle, would you like to come in?

Michelle Counley

Yes, thank you. The problem in my view is that the CMS is very much an administrative service. It is not advisory. The support throughout the entire scheme is very limited. There is another gap that was created when the CM options helpline was removed, because at least that was a touchpoint where parents could feel that they had a human contact, with a voice, that could listen to their personal circumstances and address any specific concerns or queries. Everything is now online. It is just a factual sheet that parents have to read. It is very indifferent. It is very matter of fact. It is quite impersonal at a time where parents really need to be able to have that practical support. There are experiences here that are negative from the receiving parent’s point of view. In our line of work we see both; we help receiving parents and paying parents. We get a good insight to the overview that parents experience completely. Certainly, one of the common problems that we are having at the moment is these applications have just been shut down before they are even processed. They are not following the regulations. They are based on perhaps lack of time, lack of resource, lack of training, but they are being shut down and paying parents are having their applications refused for six or seven months before that application is revisited again. From a paying parent’s point of view, most paying parents want to support their children. They want to be involved with their children and the upbringing of their children. Right from that very first contact, the language used is very hostile. It is entrenched with threats. There is a no discretion part where if you do not reply within the 14 days of that QR code, you are immediately deemed as non-compliant. There is no discussion about any facts that may have hindered that particular contact. If somebody is searching for advice about how they deal with this application, it is all stick and no carrot. Addressing the point with the online calculator, it is a very basic starting point. Sometimes there are real clear indications that perhaps there is more to what is being declared as an earned income, and there needs to be a little bit more of an exploration about the unearned income, particularly with dividends. I know a point that has been mentioned is legislation to amend that, but I think that was back in 2022. We are now approaching the end of 2026 and we do not seem to be any further forward. Again, what it is creating is a system that immediately isolates and antagonises parents. Instead of reducing parental conflict, you are, right from that very beginning stage, inflaming that relationship.

Rushanara Ali

Good morning and thank you very much. Can you talk me through some of the common challenges that parents experience when they try to navigate between the Child Maintenance Service and the Family Court?

Elisabeth Cooper

There are a number of challenges. The two systems are clearly set up to be independent, but the decisions made in each of those systems impact on the other system. Just by way of example, I specialise in financial remedy proceedings. I also do private law proceedings. If we start with financial remedy proceedings, the determination of child maintenance is directly relevant to a number of the section 25 Matrimonial Causes Act factors that a court has to take into account when determining the fair outcome in financial remedy proceedings. There is a tension in the fact that maintenance is a highly variable calculation. Clearly, inbuilt into the system is the provision for annual reviews of child maintenance, albeit that that in itself can rely, depending on when the annual review is, on quite outdated information. It could be from a tax return from several years prior, for example. The Family Court, in financial remedy proceedings, is being asked to make a final decision on capital distribution, where somebody’s income feeds into their mortgage capacity. Mortgage lenders sometimes will take into account child maintenance as an income resource, and therefore, when the court is assessing that party’s housing needs and the capital that they need in order to purchase suitable housing, the maintenance calculation, whether that is notional because it has not yet happened or is existing, is highly relevant to that. As it is so variable moving forward, there are final decisions being made in the Financial Remedies Court that ultimately a year later can change because even if the parties agree that this is the right amount and this is the information and the order that is based upon that right amount, the jurisdiction of the CMS can only be ousted for that one year. You may have heard of what we call Christmas orders, which are the mechanism by which some practitioners attempt to get around this point that the CMS, if it is approached a year after a maintenance order is made in the Family Court, will then make an application that discharges the Financial Remedies Court maintenance order. That then removes the certainty for the parties that have agreed or had a judge impose, for example, a financial remedy final order. One of the key things that I think is important is when a Financial Remedies Court requires some level of certainty as to what the position is moving forward. As they are making very important decisions, final decisions, based on that—because capital decisions are final and non-variable—there needs to be, in my view, consideration of whether or not that 12-month period should, subject to appropriate safeguards, be extended further. That is not to say necessarily for five or 10 years and so on, but to give some certainty to parties for the foreseeable future.

Dr Callan

The thing to bear in mind is that the Family Court’s primary concern is, yes, the child’s welfare and safety, and finance becomes interlocked with all that, whereas the Child Maintenance System is interested in money flowing. There are different aims; there is different information. Parents are caught up in this system. Both systems are the state, but the parents think there is no join-up and they are right. There is no join-up. In my review for the Government on how the CMS responds to domestic abuse, one of the areas that I felt was very important and neglected was the legal administrative abuse, where systems can be used. Paying parents can be victims of this as well as receiving parents. In a 2025 Family Court case, the judge accepted evidence that the deployment of multiple forums—the Family Court, the Financial Remedies Court and the CMS tribunal—all formed part of an alleged continuing pattern of coercive and controlling behaviour and it caused substantial harm. May I make one more point? It is not meant to be political, but I am concerned at the current clause 17 of the Courts and Tribunals Bill, which would remove the presumption that it is in a child’s best interest—it is a rebuttable presumption—to have contact with both parents. That immediately introduces a whole new possibility that parents will feel at a disadvantage before they even come to the courts and the child maintenance system. It is that knock-on effect of a presumption that is having a good effect in prisons, because there is an acknowledgement that even if a father or a mother is away from a child it is good if that child has contact, unless evidence is to the contrary. I am just inserting this extra layer of concern.

Rushanara Ali

Thank you. Michelle Counley, would you like to come in?

Michelle Counley

The whole point of jurisdiction is complex. It is one of the areas where there is a lot of misunderstanding. As Elisabeth mentioned, CMS can trump the courts after 12 months. That court process has had a much deeper review of the circumstances and perhaps a longer view of the future of how that would look. Certainly, we see a number of applications coming through that are likely to be heading towards a tribunal venue because paying parents with complexities and high net worth individuals see the CMS as a good, safe exit route from an expensive court order. I certainly think an extension of that 12-month period would benefit, with some security for the children. The information about jurisdiction is wildly misunderstood across all sectors, and it can have significant financial consequences. We have seen a number of cases where CMS had the jurisdiction. Mum had applied to both the CMS and the courts, processed through the Financial Remedies Court and secured a maintenance order within the final court orders, but nobody actually took the effort to notify the CMS. We have a system where a paying parent actually becomes liable under both schemes. Again, there is no discretion within the CMS legislation to apply common sense where the evidence clearly shows, “This court order is what told me to pay and that is what I have been paying, whereas actually the debt has just accrued”. We have seen cases with significant debts that have accrued because that information is misunderstood and it is not available through CMS, through family lawyers, through online information. It is not available. That is having significant financial consequences to parents.

Rushanara Ali

I will press on. My next question is for Elisabeth. How often do you see challenges arising because lawyers do not have a full understanding of the CMS? Very briefly, if you have suggestions on what could be done to promote more joint working beyond what you have already said, then please say.

Elisabeth Cooper

There are very few solicitors and barristers who are comfortable practising in this arena. I am direct access based as well as receiving instructions through solicitors, and I very commonly get referrals from solicitors for clients who have approached them. These are exceptional city centre-based firms, yet they do not feel comfortable taking on CMS cases. That continues within the Family Court itself because frequently I encounter judges who clearly understand the jurisdiction to an extent but do not understand the intricacies in relation to annual reviews or how variable the calculation may be depending on the complexity of the paying parent’s situation, and that then causes problems because if you are at a final hearing or at an FDR, where a court is trying to push the parents and mediate effectively an agreement between them, there has to be a level of knowledge from the judiciary to say, “Well, this is the scenario moving forward on the income that this party will receive by way of CMS liability and I take that into account in X, Y and Z ways.” Instead, they are treating the current calculation as if that is the calculation and is cemented moving forward, even when there is evidence to suggest that next year’s calculation may very well be different. It is because the counsel on the other side is not necessarily up to speed with the impact on it and therefore you cannot necessarily have the exchange of submissions that you might want to to put to the judge the knowledge that they would need in order to take into account the number of variables that the CMS will take into account in the future. I have been wondering about this as to whether or not the Financial Remedies Court and the DWP could work together on a standard approach to be taken in CMS, in financial remedy cases. For example, could there be a Child Maintenance Service information statement, which sets out the current assessment, the effective date, the income upon which that is based, and how that decision has been reached, the shared care assumptions and, importantly, whether there is a pending challenge and what the relevant review dates are? The other issue is that invariably, when calculations are appealed to the lower tier tribunal, those appeals sometimes take years. In the meantime, the financial remedy decision has been made. Sometimes the appeal will enable a decision to be backdated and sometimes it will not do that because in the meantime there will have been a number of other annual reviews with the same issue. I think that the starting point needs to be potentially an information statement that gives the judiciary a particular format, and then perhaps an idea of consistent treatment of maintenance in mortgage capacity evidence as well—I think that would be helpful, so taking it into account with and without maintenance—scenario testing in disputed cases so that the court again can assess whether proposed housing solutions remain viable, depending on the various CMS positions, and then joint guidance and judicial training. I am not sure whether there is any specific judicial training on CMS cases. We have, for example, the “Financial Remedies Guide” of earlier this year, which tells us what should happen at every stage of the financial remedy proceedings, building on top of the Family Procedure Rules. As yet, there is nothing in there in relation to child maintenance, so I think some joint guidance and judicial training would be of massive assistance.

Rushanara Ali

Thank you very much. If other panellists have any additional points very briefly, then please say. Michelle, did you have any additional points to this question? If not, I will move on to some further questions.

Michelle Counley

No. I think Elisabeth raised some really good points there.

Rushanara Ali

Thank you very much. Moving on to mediation, what would you say are the benefits of accessing mediation for parents who are struggling to agree to a child maintenance arrangement? Michelle, do you want to kick off?

Michelle Counley

This is an area where I think real change is needed, because the aim here is to remove child poverty but there is a much broader picture involved. As I said from the outset, the problem is that the starting point is that CMS treats parents in isolation and it cannot distinguish between parents who cannot pay and parents who will not pay. There is no distinguishing between those two categories. Right from the outset the language is hostile and threatening. That will immediately lead to one party is feeling attacked, which if you are getting unfairness, if you are getting that view from one parent, you will immediately affect the compliance. My point has always been that the system must have an effective communication process that involves both parents from that very first point of contact. It has to be inclusive of both parents. Whether there is a point of disclosure from the beginning part of the application to eradicate concerns such as we addressed earlier, with unearned income, there needs to be a much better inclusive communication system so that both parents feel that they are treated with the same level of respect and involvement within the decisions around their children rather than one parent continually feeling that they are not listened to, their complaints are unanswered and they have random poor decision making with no explanation around it, compounded by threat after threat after threat, ignoring all their protests, ignoring all their complaints—just continual threats. There would certainly be an argument for mediation to be included, but I am not so sure the resources would extend that far. Whereas if we had something with a good communication system, we could at least start to rebuild the trust and repair the damage that has already been created.

Rushanara Ali

Thank you. Samantha, did you want to come in? The Government programmes, the reducing parental conflict programme or the mediation voucher scheme, do you have a view on those?

Dr Callan

I think the mediation voucher has been very important. For the reducing parental conflict programme, almost all the local authorities have taken the money up and run with that. They are encouraging everybody in the local authority, in the best cases, to have an eye to conflict as being a problem in a family system that you might not present with going through a messy separation; you might present with all the offshoots of that. The voucher has been an important nudge in the right direction, but at £500 the people around me will know that that might get you one and a half sessions. Still, I don’t think the Government should have to pay for everything. I think you value what you have to pay a good contribution towards. I do not know if you want me to talk about it now, but I think there is a greater role for mediation, though it needs to be as part of a community-based support package. I will finish with this. We have had almost 40 years of a child support system and we keep discovering the same mistakes. DWP and CMS are constantly trying to improve and up their game, and that is what I found in my review. They are a reform-minded organisation, but they are working with the most frail family systems. They need something in the community where people can go and say, face to face, “Look at my ream of paperwork from the CMS. What do I do?” and get in there before the ream builds up—early intervention.

Rushanara Ali

Thank you. Could plans to remove the direct pay service reduce opportunities for parents to resolve difficulties through mediation?

Dr Callan

On the whole direct pay problem that the Government are trying to solve, which is that conflict can build up because there is no automatic Government redress if you do not pay, it is good that they are reducing the fees and everyone is moving into collect and pay, to 2% and 2%. The problem is, as Michelle has explained, you are still in this very hard-edged system with so many things. We have had so many reforms to the payment system of child maintenance. If we only tweak at the edges—this is quite a big reform, I grant you that, but if we are just trying to reform a system rather than to put other support in place, we will never get over the internal contradictions in the CMS, such as the more contact you give to another parent, the less money you get. That is a big internal contradiction that needs proper smoothing in a community-based setting.

Rushanara Ali

Absolutely. Finally, what are the safeguards that can be put in place to make sure that parents are not pressurised into an FBA or mediation when it is not appropriate, especially in relation to the risk of domestic abuse?

Dr Callan

That is yet another reason for these family hubs that are now all around the country—if you have triage, if you have a family separation clinic, which is something I have been working on, it is spotting these issues, coercive control and so on, psychological abuse and emotional abuse. You cannot tell that on the phone, despite all your training. It is another reason why, if you are in a family-based arrangement, let’s talk to you in a setting that is—

Rushanara Ali

There is so much here that I have run out of time, but please do write in if there is more you want to say. Thank you.

Patrick Hurley

I have a question about equal-care cases. Whichever of the panel feels like they want to come back, I am fine to open it up. The 2012 regulations say that a parent should only be treated as the non-resident parent if and only if that person provides day-to-day care to a lesser extent than the applicant. If two parents provide precisely equal care, neither parent will be required to pay maintenance, is my understanding. The problem comes when it comes to the interaction with child benefit, and I want to clarify or get some confirmation from the panel as to the interaction and how child benefit is treated in these equal care cases, whether or not it is used as evidence for one parent to be non-resident or one parent to be given primary duties. That is to whoever would like to take that on.

Michelle Counley

If I can address that first, child benefit very much is the language for CMS and, yes, that is very often used as the deciding factor. Although you have the rebuttable assumption for where child benefit is paid to determine the primary carer, that is usually the deciding factor. The CMS will routinely disregard lots of other evidence that might have been provided, including maybe a child arrangement order. Traditionally, or historically, that has forced most applications where equal day-to-day care has become an issue into the tribunal arena. There are long delays on that. That then brings complications with payments and arrears accruing, and so on, and whether payments continue, because there is no responsibility to reimburse. The problem is that the narrative around the equal-care position is misunderstood. Again, we find lots of parents have been told, “My solicitor told me I don’t have to pay”. That is not exactly true, because there is a difference between what the CMS treats as band equal shared care and day-to-day equal shared care. There needs to be a greater involvement to decide whether parents do equally share the day-to-day care of their children, and CMS routinely does not take that level of investigation. No communications, no explanations, it just rejects the position and forces the aggrieved parent into tribunal. The only point I will make on that is that I am aware that CMS has introduced new checks and changes where the equal shared care is concerned, and I understand that they are now taking a greater view on evidence that is provided rather than just relying on the child benefit. It is relatively new. It would be nice to see that there is a reduction in applications to tribunal when regulation 50 is raised. But it is a case of watch this space, because up until now it is very much decided by who claims child benefit.

Patrick Hurley

A very quick supplementary. Because this is relatively new, what questions should the CMS be asking to determine day-to-day care of children?

Michelle Counley

It comes down to the boring day-to-day routines of child contact. A “lives with both parents” order does not necessarily provide sufficient information. It is about who is providing school runs, who is doing the after-school pickups and drop offs, who is taking the children to the doctors, who is administering the medicine, who is having the discussions about what school the children will attend and what mental wellbeing is being provided for the children. There is a whole scheme of questions that need to be addressed to drill down into whether children are being cared for equally by both parents, because this is not about number of overnights. This is not, “I have them five days a week and then two days and swap it the next week”. It is about who is providing that day-to-day care for the children. It has to be about that day-to-day routine that everybody does, or parents do, without having to think about it.

Elisabeth Cooper

Can I add to that please? I have experience of a number of cases where parties have an exactly equal number of nights spread over, say, 14 days, shared school holidays, exactly equal. Their understanding is that there should not be a liability for child maintenance. However, as you may know, there is a difference between having an exactly equal number of nights, which entitles you to a discount in what you pay, and equal day-to-day care. The questions that Michelle raises are exactly the questions that I advise my clients to get evidence of to rebut the presumption that child benefit answers the question. They submit that evidence and provide the exhibits that they need to do that, “I am the first port of call that the school identifies. I am the address that the child is registered with the doctor”, and still repeatedly the CMS comes back and says, “No, I don’t accept that information”. Then I am struggling to advise my clients, “I am not sure what else you can provide here. We have to appeal it to the tribunal and see if a face-to-face human will give us a different answer”. Invariably they do, but of course that then clogs up the tribunal system, which could otherwise be dealing with far more complex cases on income.

Patrick Hurley

You mentioned earlier the family hubs and the rollout and the integration there. Could you talk me through the benefits and the difficulties of trying to integrate with other agencies such as family hubs so that parents can get that better support that they need?

Dr Callan

That is a great question, thank you. We need that crock of gold at the end of the rainbow, cross-government working. MoJ is keen to have this because, as you may know, the President of the Family Division, Andrew McFarlane, said about 38% of separating parents are using the courts. Judges are saying, “Why am I adjudicating between which service station on the M4 to drop this child off at?” It is tragic, it is a huge drain on the public purse and on the court time, but it is because parents do not have somewhere to go early to prevent conflict from building. It will sometimes build, regardless of any early help. Unlike in Australia, where it is a statutory pre-action family dispute resolution requirement, when parents are in dispute, that they will have been to somewhere that they—sorry, let me start again. You cannot take action in the family courts in Australia unless you have used statutory family dispute resolution. The gateway for that is these family relationship centres. I visited them in Australia. They do good work, they do child-focused mediation, you can watch films about the effect that will likely be incurred on your child if you have war without end, but the main thing is that it is storefront, it is not a government building in the usual sense—the family court can look very austere—it is a place you would like to go. The Government have made a good start. In 2022 one of the minimum expectations on family hubs, which has been continued under this Government was that they would support separating families, but it is very minimalist. What we need is, as I said—I can write in about this because there is quite a lot of detail—that what would be good in a family hub is you could have something called a pre-mediation information and assessment meeting. You could get something that is not short-circuiting the process of the MIAM, and then maybe mediation or going to a lawyer, but where you just jolly well get some advice. You know that even if you do mediate, you will still have to pay a solicitor to get a consent order. A lot of people have very little idea of the process of separation, and they go into it and suddenly it gets very contested. I hope I have answered your question. There is a lot more that I could say, but it will take a resolution at the heart of government that this is a very important area for family hubs, because they are meant to be nought to 19. Separating families, almost without exception, are going through something pretty traumatic. In Norway or Australia, as I said, they do not expect you to go through that process without face-to-face help, and that is where CMS could be helped as well.

John Milne

This is a question for Dr Callan, specifically in relation to your recent report into the CMS. What improvements have you seen in the service in response to domestic abuse cases?

Dr Callan

One very good reform is that you have named and trained specialist caseworkers, so that rather than you having to repeat your story again and again—which is very, very distressing, as everyone can imagine—you can go straight into a team. It might not always be the very same person, but people do not mind, as long as good records have been kept and they say, “This is my name”, or they give their number, and people say, “Oh, yes, we have all your information here”. One thing I would say for CMS is that I have heard that it is like you are starting all over again every time you pick up the phone. Why can’t we be using AI like so many doctors are now to record these conversations so that people do not have to repeat themselves all the time? They can make outbound calls. They can be much more proactive. One thing that I asked the team recently is, “Are you capping the number of people in this specialist team by the amount of people you have who are trained?” They said, “No, we are trying to ebb and flow the team, adjust it for the number of cases that we think qualify to go into the team”. I thought that was quite encouraging. Moving on, I watched some of the training that all operatives have and it was very focused on it being a woman who is the victim and it being the receiving parent. We need a lot more balanced training. I have not seen a lot, but I mentioned it to them recently, and they said, “Yes, we will we will go and review that”. Another thing that others will talk about is that the calculation has not been reformed. They made a decision not to reform the calculation for cost of living reasons. However, what their research did show—the Government did some attitudinal research—is a priority to change the calculation. I know that Professor Hirsch will be talking about this in the next session. Their research showed that the paying parent’s willingness to pay increases if they have more contact with the child. If the calculation is viewed as fair and not excessive, and if it is transparent—we all know about the algorithm—there is less conflict with the other parent. I wish that the Government had made a different decision on the basis of their research, but they have not, but I think that there is some good data in there. Finally, both salaries should be taken into account. A service that is considered inherently unfair is an engine of more conflict. In many European countries, and Australia and New Zealand, the systems take both parents’ income into account. But we are still saying, “No, it’s too complicated”. I made several recommendations, but my final recommendation, which I have not seen enough progress on, but again it is a political decision, is this community-based help. We will not see a major change, especially in identification of domestic abuse, if it is all done on the phone or online. That is why I keep pushing on the family hubs button. Thank you.

John Milne

Thank you. I was going to ask you what recommendations you felt should be acted on that they have not acted on, but you have just answered that.

Dr Callan

Good, I am glad that I have done that.

Liz Twist

I want to ask about the wider aspect. How well do you think the CMS works with other agencies to support safeguarding, for example, as part of the multi-agency risk assessment conferencing, or MARAC, system? Who would like to start with that one?

Dr Callan

Would Michelle like to start, because I have talked a lot?

Michelle Counley

To be fair, because we are more proactive on the frontline of helping parents, we do not generally get involved in the interactions with multi-agencies, so I would probably defer to the other panels.

Elisabeth Cooper

The only thing that I would add, being a public law practitioner when I started out, is that, to my knowledge, the MARACs do not take into account or have any support in assisting the parents in making provision financially for the children. It is more to, I suppose, firefight the immediate concerns on the safety of the children and probably the safety of the parent.

Liz Twist

I am thinking—and we heard evidence on this—of the fact that sometimes, as we have heard, CMS can be used as a tool to continue domestic abuse through different financial and other pressures. Is there any way in which we could or should make that link so that people are aware of the whole picture?

Dr Callan

You have pointed out why the Government are considering abolishing direct pay, because it was being used as a very effective, very nasty tool. You would have people making payments to the other parent and putting nasty references in—I hardly like to say it—for prostitution services or something. It was really unpleasant, not paying on time, paying just enough that it was hardly worth the while to say to CMS, “The money is not flowing”. Also somebody being paid, but then turning the tables on the paying parent for these, as I say, legal administrative abuse reasons and saying that you are reporting them to the CMS for not paying. It was rife with problems on that front. When I interviewed a lot of CMS professionals, they felt that their hands were tied. They probably would have liked to have been involved in a MARAC. I would say that if we had CMS people based in family hubs, there would be a lot of job satisfaction there, because they sense the frustration of the person that they are talking to. They feel it themselves, because they are thinking, “How much of this story am I really getting?” I have to be quite hard-edged for the reasons that Michelle has talked about. I keep coming back, if I may, to this problem that we are trying to do everything almost through the letterbox of a house, when if you could sit and talk to somebody, things could be resolved more equitably and easily.

Liz Twist

You think that personal involvement would be a key change, because there are other ways of using the system, aren’t there, like appealing the shared arrangements that we talked about earlier?

Dr Callan

Yes.

Elisabeth Cooper

I was just about to say on that point that a colleague of mine has a case currently where the paying parent has told the CMS that there is a shared-care arrangement—he has not seen the children for many months—and the CMS has completely changed the calculation based on what he has asserted and is refusing to take into account anything other than a court order from the parent with care. She does not have a court order and, in fact, one of the children is over the age of 16, so she would not be able to get a court order. She is stuck in this situation where the maintenance has now dropped off to nothing. There is nothing ostensibly that the CMS will accept as evidence to show that the reality on the ground is not what he is asserting. That is one example of the ways in which people are using the system as it currently is.

Liz Twist

Would you agree with the suggestions that embedding more CMS staff in real-life, multi-agency stuff might be useful, with more personal contact?

Elisabeth Cooper

Yes, I would absolutely, not least because it gives that human contact to be able to talk them through, “This is how it works, this is how the calculation works, these are the variations that can be applied, and these are the range of possible outcomes for you”. I think that it would be extremely helpful, yes.

Chair

Thank you so much, Liz. That concludes the evidence session for this first panel. Thank you so much, all of you, for joining us, Michelle online, and Samantha and Elisabeth here in person. Thank you. Examination of witnesses

Witnesses

Dr Christine Davies, Mari Haapanen and Donald Hirsch.

Chair

Welcome back to this inquiry session on the Child Maintenance Service. This is our second panel for the morning and it is a pleasure to welcome Dr Christine Davies, formerly at Royal Holloway, University College London. We also have in the room Professor Donald Hirsch, Emeritus Professor of Social Policy from Loughborough University, and Mari, I hope I get this pronunciation, Haapanen?

Mari Haapanen

Yes, that is correct.

Chair

She is joining us virtually from Finland, from the University of Turku. It is lovely to welcome you as well. I will start the questions. Could you explain to the Committee how fit for purpose you think the current child maintenance calculation formula is? Could you go into a bit of information, one of you, about what it is, how they go about calculating this, and also in your response, if you think it is not fit for purpose, why that is? Who would like to start?

Dr Davies

I will do my best, and thank you for inviting a few details. The child maintenance calculation scheme—summary at the end and beginning—is not fit for purpose because it produces amounts that cannot be paid. The decision was made, having had problems with the 1993 scheme, to go for a very simple scheme. So the child maintenance is calculated as a percentage of the income of the second parent, I will quote the second parent, the one who does not have the main care of the children. The basic rate is a percentage of the whole income, and this causes problems because if people are not earning very much of course they cannot pay a big percentage or even a significant percentage of their income. The Child Maintenance Scheme introduces two thresholds. It has one below which you pay a nominal sum at a flat rate. It has another, above which you will pay the full amount. In between, there is an intermediate area where you pay the reduced fee, the reduced charge. This seems to make sense. You only pay the full amount when you are earning enough. If you are earning less than that, you pay a reduced amount. The trouble is in this insistence that the maintenance is on the full amount, because if you think of what happens—and I will draw a graph in the air—there is a percentage of the income, and then they say that up to this first threshold, you play a flat amount. When you get the top one, you are paying that whatever. In between, you have to go rocketing up, so quite a large proportion of every pound that you earn is going in extra child maintenance. This causes problems. The structure causes problems. Even more so—I have been involved in this for a long time, and there are two specific things to draw people’s attention to. What thresholds should we have? The current thresholds below which you pay nothing, the flat rate, and above which you pay the full amount, were set in 1998 at £100 a week and £200 a week. To give you a flavour, in 1998, £100 was 20% above the income tax rate, where you started paying income tax. Obviously, as time has gone on, it has got silly. In my briefing paper before the meeting, I gave you an example of the kind of thing that happens. People who should, under the intentions of the scheme, be paying just a flat amount, a nominal sum—it would be £7 if you are on Universal Credit, plus the 20% that they charge for going through the collect and pay—are, instead of paying that, paying the full amount. Someone earning £300 a week, which is probably where the threshold ought to be now, instead of paying £8.40 a week, is being asked to pay £68.40 a week. These are people who are on a very low income, so it does not make sense. This problem has been there right since 2003 because the same structure was used then, and the same threshold was used then.

Chair

Good grief. Okay. We heard before with previous panel also about the anomalies like dividends not being included as income. I am sure you can let us know if there are other anomalies that we need to be aware of.

Dr Davies

There are numerous ways.

Chair

Right, please do let us know. Donald, is there anything that you would like to add to that?

Professor Hirsch

Our research has been particularly on the paying parents who are non-resident but who have some shared care with some responsibility for overnight care of children. Superimposed on this system, there is some consideration taken in the formula of that sharing of care. However, both structurally and on the levels, it does not correspond in any way to the costs that people actually face. I can talk more about it, but just in brief, on the levels, you get let off at a certain proportion of what you are paying according to how much time you are sharing the care. If you are doing it a day a week, you get a seventh. That is a seventh of what is generally 12% in these lower to middle-income brackets. It does not add up to very much. If you were on £200 a week, it would be roughly £3 for every day that you spend caring, which does not even pay for the extra fuel costs, and we identify many different costs. There is also a structural issue, which is that our research, which I can talk more about, shows that a lot of the costs that people face are fixed costs—providing a suitable home, particularly, for their children to spend time in. It is not just twice as much if it was two days in from one day. There are ways that we have suggested in a note to the Committee that you could start to change that structure.

Chair

There may be an opportunity to go into that in a bit more detail, Don, towards the end. Mari, do you want to comment on how the UK’s system with the CMS varies with your own examples in Finland?

Mari Haapanen

In Finland, if I can briefly talk about the background of the child maintenance system in Finland, parents can agree on child maintenance and municipalities can then ratify the agreement. The amount is in principle based on case-by-case discretion, but there are also official guidelines on how to determine child support. These guidelines were made in 2007 and the child maintenance is calculated based on children’s needs and both parents’ ability to provide for the child. These guidelines were made in 2007, and in 2025 they made an amendment to the guidelines that also take into account sharing the care of children.

Chair

Is that discretionary?

Mari Haapanen

Yes, they are not obligated to follow these guidelines, but they are just a guide on what to take into account when determining child maintenance in Finland.

Chair

Thank you very much. I will hand over now to John Milne.

John Milne

The first question is for Christine. You touched on this a little earlier; the principles for the child maintenance service and the thresholds were laid down some time ago. What has changed? What were the assumptions then and are they relevant to today?

Dr Davies

Indeed. They were set in 1998 when the Green Paper was put forward to propose what became the 2003 scheme. It is difficult to know where to start. Obviously, anything that was happening that was relevant in 1998 is not relevant now. I could give all kinds of examples. For example, the £100 threshold was equivalent to 30 hours’ work at the national minimum wage. It is now about four and a half hours’ work at the national minimum wage. It is very bad. Are we talking more about the review cancellation and the research there later on, or shall I bring that in now?

Chair

Bring it in now.

Dr Davies

I have been involved in this for a long time and have meetings with what was Families Need Fathers and Both Parents Matter. We have quarterly meetings with the Child Maintenance Service Policy Group. This means that I do have some insight, and I am told various things about the things that were happening. For I don’t know how many years, their attitude has been that there is nothing wrong with the structure; they can do things in other ways. A senior member of the team said to me, “We will just have to disagree with this, Christine. You say the structure is at fault. We say it is fine.” In fact, in the work that they did building towards a possible consultation, what they decided they would do was to look at increasing the thresholds so that they would go back to the kind of situation it was in 2003. We were not told what they would change those thresholds to, but it could be—as I have already implied—that perhaps the lowest threshold will become about £300 rather than the £100 it is now. It depends on what you want to do as your comparison. The threshold for paying income tax has been frozen for a few years in any case. Therefore, there are political reasons why you might want to use one comparison or another. This is fine if the structure was fine. You could say yes, and I wonder if what I am about to say is perhaps the reason why they have not gone ahead with their consultation, because if you change the thresholds in that way, you might change the lower threshold to £300, say, as an easy example, and the top one to £600, but, in that region, the parents are now paying income tax. They are probably on Universal Credit, which means that for every pound they earn, they are paying National Insurance, income tax, and the child maintenance increases. If you are paying for three children under the collect and pay scheme, then the result of this is that for every pound that you earn between £300 and when your Universal Credit runs out, you will be losing—is it 5p? I cannot remember—but I think it was 5p a pound for every pound that you earn. As far as I am concerned, the structure does not work. You cannot put things right by changing the thresholds.

John Milne

These systems are obviously very out of date. What mechanism would you suggest for adjusting them in the future? Clearly, even if we set them now, they go out of date again. Is there a principle or mechanism you would suggest?

Dr Davies

My basic, fundamental thing is you cannot stick with this structure. If you tried doing it with income tax, you would get a silly situation. The moment you pay your National Insurance at 8% and your income tax at 20%, it is 28%. If you did this sort of thing, you would pay nothing to start with, 28% after a certain level, and in between, you would be paying 56p of every pound that you earned. It does not make sense. What happens in other countries is that they have a self-support allowance. Just like with income tax, you have a personal allowance. There is an allowance for your personal basic living costs, and your maintenance is charged above that. Rather interestingly, when they set up the scheme, the intention was that parents should contribute towards the upbringing of their children, but they should be left enough to live on themselves. If they cannot support themselves, they cannot support the children.

John Milne

Yes, in principle. Moving on to other countries, let us go for Finland. Mari, you talked a little bit about how maintenance is calculated in Finland, but what are the key differences from the UK and pluses and minuses in your view?

Mari Haapanen

I am not an expert in the UK system—[Inaudible.]

John Milne

Mari, we cannot hear you at the moment, although you seem to be unmuted.

Mari Haapanen

I cannot see that I am muted.

Chair

That is slightly better, is it not? I do not know if it is your microphone.

Mari Haapanen

Can you hear me?

Chair

Only just.

Mari Haapanen

Okay. I do not know what has happened.

Chair

We will come back to you, Mari, if that is all right. We have our tech whizzes here who are working on that at the moment.

John Milne

I will move on to the next question.

Chair

Yes, please, John. Thank you.

John Milne

This is a general question. This is about CMS interaction with other benefits. What evidence is there that interactions between the social security system and CMS can cause problems for parents specifically on low incomes? What sort of problems arise? Donald?

Donald Hirsch

It is more a question of not having coordination, because when you look at paying parents, they have no access to any child benefit, for which there is a good argument. If they are trying to run a household that includes children there some of the time, they are being treated as a single person if they are on benefits. For example, they would only have the right to one bedroom to be paid for under social housing with the bedroom tax or under local housing allowances if they are in the private sector. Quite an interesting point—I think Christine has suggested this as well—is that there is a real case for giving them a work allowance, which means, as other parents, once you start earning, you do not immediately get your Universal Credit withdrawn from the first pound. The rationale for giving a work allowance for people who have family responsibilities is that they have other responsibilities, and you take that into account on thinking about how much you expect them to work or what happens if they do small bits of work. There would be a real case for that, as well as for potentially a higher Universal Credit standard allowance. Of course, the Government is not exactly overflowing with cash, so I am not suggesting they will do this tomorrow, but we need to start thinking about how paying parents who do have responsibilities for their children can avoid bringing them up in poverty. We think about poverty very much on the lone parent who is the primary carer, but not about the fact that the children may be spending quite a lot of time in inadequate accommodation or not be able to stay with that parent and have the benefits of having a relationship with the second parent because they cannot afford it. One reason for thinking in this way is because anything you do to change the formula that favours paying parents will involve a quid pro quo on the receiving parent receiving less, and there may be a case for that in many cases. However, I think you have to think of those two things together, not completely in isolation.

John Milne

Christine, do you have anything to add?

Dr Davies

If I can pick up on the work allowance situation, until 2016, every worker had a work allowance. Building up to that year, the Government proposed, in order to try and save money, that they should increase the taper rate from 65% to 75%, and also get rid of the work allowance for people who did not have responsibility for children. They did not go forward with increasing the taper rate, but now, people who are deemed to have no responsibility for children do not have a work allowance. Universal Credit is meant to enable people to go into work and to benefit from their work. I would very much like that work allowance to be given back—not just to people who have responsibility for children, including paying parents—but for every person to have a work allowance. Why should they be excluded? If you look at the figures now, the first parent—the one with primary responsibility for the children—has so many benefits opened up to them; they get child benefit, but that opens up everything else. They are treated as if they have sole responsibility for the children. The work allowance is—I cannot remember the exact figures, but it is more than £400 a month if they are receiving housing support, and if they are not receiving housing support, it is more than £700 a month. The second parent gets none of this. As soon as they start work, their Universal Credit is reduced, at 55p in the pound.

John Milne

Thank you. I think we have Mari back. Can you hear us?

Mari Haapanen

Can you hear me now?

Chair

Mari, it is still quite faint.

Mari Haapanen

Can you hear now?

Chair

Perfect, yes.

John Milne

Loud and clear. Something has happened; whatever was on top of the microphone has just come off. I will go back and remind you of the question. I was asking how child maintenance is calculated in Finland and other countries, and what the key differences are compared to how the calculation is made in the UK.

Mari Haapanen

If I have understood correctly from the conversation, the formula is very rigid in the UK, whereas in Finland, it is more based on discretion in determining maintenance, and parents can also agree on maintenance themselves, so they do not have to make formal agreements. That is one. Furthermore, both parents’ incomes are accounted for, which is another one. Regarding benefits, some countries do it better than others. In Nordic countries, there are possibilities to split benefits between parents if there is a shared care arrangement, and, for example, Sweden and Norway do this way better than Finland. There are differences between countries in that regard.

John Milne

In a scenario where parents cannot afford to make a payment, what happens in Finland?

Mari Haapanen

In Finland, we have a guaranteed child maintenance scheme. If the other parent cannot pay, their child will get guaranteed maintenance from the state. In cases where there is a child support agreement, but the obligated parent does not obey the agreement and does not pay child maintenance, there is a possibility of getting the guaranteed maintenance. If guaranteed maintenance is paid due to neglect of child maintenance, the social insurance institution can collect it from the parent who is liable to pay child maintenance. The basic principle is that every child should be secured some maintenance, either through publicly guaranteed child maintenance or through the other parent.

John Milne

Thank you. Moving on, I do not know if you heard the previous conversation, but I was asking the other contributors about interactions between the social security system and the CMS and the impacts on parents on low incomes. Are there any lessons you think the UK Government could learn from other countries, including Finland, as to how the social security system treats separated families?

Mari Haapanen

I would look at countries that support both parents, for example, regarding housing allowances or how they can divide the child benefits. In social assistance in Finland, received child maintenance is considered as income. If there was a pass-through where it was not considered as income, decreasing social assistance, that would be one way of reducing child poverty, for instance.

Liz Twist

I think we have already touched on the questions that I will ask, but I would still be glad of your thoughts. The Department stated in its evidence that the CMS calculation formula represents an amount of money that is broadly commensurate with the amount a paying parent would spend on the child if they were still living with them. How accurate do you think this is? I think I have a clue.

Dr Davies

You can probably see the smile on my face, because the percentages set up for the 2003 scheme did not have any appropriate foundation. It is quite remarkable. They decided, for example, that for one child, a family would spend 30% of their income on that one child. Just think about your own personal situation: 30% would go on the child. Since there were two parents, they decided to divide this by two and pay 15% each. Apart from the mathematical flaw in that, there was no logical foundation for this. When you look at the practicalities, if you are a low-income family, a huge proportion of your income goes on basic things like rent. At the other end of the scale, if you are earning a lot, it is not the case that 30% of that income—or the amended amount for large incomes—is going on the child; people might be investing in their future or doing this, that or the other. The percentages simply do not make sense. In Australia, by contrast, they work out the cost of the child depending on the age, which is amended annually, and that cost is divided between the two parents in proportion to their income, and that income includes any state support.

Donald Hirsch

I support Christine’s suggestion that it is a bit of a nonsense. I tried to look at where the evidence was coming from, and there is reference to an American study from about 30 years ago about the proportion of a couple’s income—the individual income of someone living in a couple—that would be spent on a child. They started by looking at the cost of toys and things they could measure directly, and then for housing, which they could not really work out, they did it on a pro rata basis and came up with a proportion. I do not think it is a question you can answer, because when families live separately, so many things are different compared to when they live as one. There are economies of scale. There is the fact that it is not one parent who is contributing some of their income if you are getting a family benefit. I think it is a non-starter. What was suggested in relation to the Australian system makes more sense, but it needs to start with current situations and actual costs rather than some abstract figure. There will always be an arbitrariness in this, much as there is in our benefits system, where social security benefits are ultimately based on something that was reported in the Beveridge Report, which had research in the 1930s when they set the national assistance levels. That was about what people spent rather than what they needed. Since then, it has been about how much you uprate it each year. It is a nice idea to ask what the previous situation was and how we can translate it into the current situation. However, the current situation is not the same, not least because two households are more expensive to pay for than one.

Liz Twist

I will return to that in a minute, but Mari, I saw you nodding your head at different points there, so I wondered if there was something you wanted to say.

Mari Haapanen

In Finland, we have a calculation method where children’s costs are divided between parents based on their ability to provide for the child, which also includes benefits and the calculation of the basic needs of the parents.

Liz Twist

To summarise, what I am hearing is, no, it does not reflect the amount commensurate with what a paying parent would expect to pay towards the costs. Donald, could I ask you to go a bit further? How could the calculation formula be amended to take into account the costs of raising the child by both parents?

Donald Hirsch

It is very reasonable that the present system reduces the amount you are expected to pay if you have responsibilities for overnight stays. Our research found a number of different costs which were very important if a child is not to be brought up in poverty by a low-income parent: providing suitable accommodation, equipping it well, ensuring it is a home rather than somewhere they camp overnight, doing things together and being part of that child’s life—whether it is giving birthday presents or helping to share the costs of things like children’s activities. To the parents we spoke to, this was so much more meaningful than just giving a cheque to the other parents so that they could pay for things. It had a significant effect on the relationships. We should also consider things like clothes and equipment, which you cannot constantly transport between different places, different homes. There was also a bit about things like food. The bulk of the costs were what I would call fixed costs. They will not vary according to how many nights they are there. It is about having an alternative home. One option is to have a flat-rate element rather than purely a proportional one, and to make sure that that flat-rate element helps people on lower incomes rather than it being a percentage of what you pay and therefore what you are let off is less, the poorer you are. One such hybrid system, which I have suggested in my evidence, is that you could have a flat-rate amount that it is reduced by, to help people for whom the current amount is very low, people on lower incomes, but that you also have the current system, which reduces the presumed income that 12% is paid on. You have that system for people who are better off, and it is just whichever is the greater. It is a reduction of the liability of the paying parent by a fixed amount unless 12% of their income—sorry, you would have a banded system. You would have the present system where it would be a certain proportion of your days, which would determine what your income was presumed to be and then 12% would be added on to that. I am sorry, these things are always very complicated to explain. I refer to my paper. The ultimate thing that I am saying is that, in order to avoid poverty within these families, you certainly would want to take account, at some sort of flat rate, of these basic costs, of making sure that people have a home that is decent. As I said earlier, if you can combine that with the state being a bit more generous towards regarding them as families, then that flat rate would not have to be as high and therefore reduce what the receiving parents are getting. Particularly with housing, I think it would be more about state rules and benefit rules regarding people as having a right to more than one bedroom if they are a single person putting up a child.

Dr Davies

May I come back on that? We have referred to the reduction if you are having the children for some of the time, and it has already been commented that perhaps this is not sufficient. If you are sharing care equally—spending half your time with one parent and half with the other—according to present rules, the parent receiving the child benefit still receives child maintenance from the other parent, regardless of their income and financial situation.

Chair

That came up very strongly in the previous panel.

Liz Twist

Finally from me, looking at the broader issue of poverty or hardship in this situation, how well do we understand the number of children who experience poverty or hardship when living with both the paying parent and the receiving parent in families who share care? Do we understand it?

Dr Davies

No, not in official documents.

Donald Hirsch

The problem is that we do not study poverty in that way, and maybe we should. Our report was about needs; we did not look at the actual experiences. There would be room for a survey on that. When we report on child poverty rates, we completely ignore any evidence—because we do not have a basis for doing it—of income falling below a certain threshold, taking into account the extra obligations of someone with a child staying some of the time.

Liz Twist

It sounds like there is a gap in the data we have. Mari, how could the UK Government approach data collection to gain a better understanding of the economic wellbeing of children in families with shared care? What examples can it learn from Finland and elsewhere?

Mari Haapanen

I agree that there is a problem with lacking data for analysing shared care families because we examine households, and when family members extend households, we do not see who is actually living there. There have been some comparative studies, such as the EU-SILC, which included children’s living arrangements in their 2021 module. This allowed us to research households that traditionally, in these household-based surveys, seemed not to have children but actually do. Additionally, some of the households that seemed to have full-time children have part-time children. That is one way to research this that includes the information on where the children live. That is about identifying those households; that is the one problem. Then there is the question of how much the children actually cost. There are some studies, as we heard here, on how much they cost, but there are not that many. I think it would be important to increase understanding of that. We also need to acknowledge that parents do share the cost of children across the household. More research on how this happens and how it affects the wellbeing of families is needed. I think the answer is that we need more research and more data that accounts for this.

Dr Davies

We talk about lack of data in research, but all the data is there in the Child Maintenance Service. The National Audit Office produced a very powerful report, because of course they have access to all the data. If the paying parent is in poverty, then the children are in poverty in their involvement with that parent. If you look at the National Audit Office report, 46% of paying parents do not earn enough to pay income tax; 62% of those in arrears do not earn enough to pay income tax. The people who are on the Child Maintenance Service books are people who are more or less living in poverty themselves, even before they start having to try to pay child maintenance. Again, if you go back to the National Audit Office, they talk about the amount in arrears—this may come back later. These arrears can never be paid back, because the people do not earn enough money to pay them back. If you want a little personal story, years ago in my hometown, an MP was talking about all these parents who have the children for the weekend, and they cannot afford to buy them an ice cream.

Donald Hirsch

I have a bit of a warning here, which is that we can look at the cost of a child, and the research at the centre where I have worked—the Centre for Research in Social Policy at Loughborough University—regularly does that for the Child Poverty Action Group. What we conclude is that benefits are certainly much too low to cover the cost of a child, and benefits generally are much too low to cover what we identify as a decent standard of living. There will always have to be compromises. What you cannot do, for example, is look at our research—which says that to provide a decent amount for a child in our model, you need nearly £100 a week for a child if they are living with you for some of the time—and say that therefore you should reduce obligations by £100 a week. That would be quite tricky for the receiving parent, I think. The problem is that both, in the case of being on low incomes, do not have enough to live on. We should not be under any illusions that we can just say, “Let us look at the cost of the child and how to distribute it”, because you will not cover it fully without a huge increase in benefits generally.

Chair

I have a last couple of questions, if I may. The decision that the DWP has made is not to change the funding formula calculation around that. I wondered if you would like to comment on how it relates to its own evidence.

Donald Hirsch

One of the main things that it commissioned was a big interactive survey, putting different scenarios to paying parents and receiving parents. I do not know why anyone was surprised to hear that the paying parents did not want the payments to go up, and the receiving parents did not want them to go down. There were exceptions to that; I think that there were some questions where paying parents did see the point in—

Chair

This was a survey?

Donald Hirsch

This was the DWP’s consultant’s report, which came out in June, looking at the case for changing the system. I feel that that is not a very good reason, except that sometimes reopening a can of worms is difficult. I do not feel as though that kind of research is sufficient to say the system is fine as it is, because it is obvious that if you ask people whether they would like to pay more or receive less, you know the answer.

Chair

Indeed. Christine, do you want to add to that?

Dr Davies

I support that wholeheartedly. It is the research that they did, the survey that they did, in which they gave us a reason for not going ahead. It did not—Donald has used much better, much more polite language than I would. It came up in our quarterly meeting as well, and I asked some questions, and we got feedback from this, because they said things such as, “Oh, paying a bit less would not make much difference.” When we queried it, in fact, the average statement was, “It would have to be a very significant reduction in order for it to make a difference, and in order to make it affordable”. The example I gave earlier of someone being asked to pay £68.40 instead of £8.40—that £60 a week less is a very significant reduction.

Chair

Yes, indeed.

Dr Davies

That might very well have made the answers different. Again, you ask one parent, “Would you like to receive less? Would you like to pay more?” The answers are pretty obvious.

Chair

That is disappointing on the quality of the study. If you were to design a review into the child maintenance calculation, what areas would you consider? What would be your success indicators? We talked about children living in poverty in shared care arrangements. What other ones would you want to identify?

Dr Davies

In some of my documents, I have written comments about the system and what the system has to satisfy to succeed. Payments have to be seen to be fair. They have to ask for a reasonable amount. Of course, the bottom line is that they have to be affordable. At the moment, certainly the affordability is something one can go on about. The arrears are horrific. If I can say something now, the National Audit Office, when they did their report, the arrears were about £400 million, rising at about £1 million a week. They said that by March 31, it will reach £1 billion. The Government’s response to this was that they do not recognise these figures. If you look at the figures for June this year, they have now reached more than £800 million, and they are rising at more than £2 million a week. We will reach that target of the billion level by the end of next year. One of the things the National Audit Office said is that these mounting arrears have got to be looked at; you have to find a way of dealing with them, because they cannot be repaid.

Chair

Looking forward, how can we move from the position where we have had what seemed a questionable engagement with parents, which has resulted in a status quo remaining? What would you do? How would you design a good quality review that wanted to look at the calculation?

Dr Davies

It is a very complicated situation. The system that would work—Australia has always given us a good example—is where you look at the income of both parents, whereas now we just look at one. You share the costs between the children according to their ability to pay, and that ability to pay includes the benefits they get from the state as well. That would be seen to be something that was fair. At the moment, as I say, only one income is taken into account. I think stories can reveal a picture. When this was being looked at some time back, one girl said—it tells us about the complicated relationships there are nowadays—“My ex-stepmum lives in a four-bedroom house and has two horses; my father lives in a bedsit and cannot afford to feed himself,” yet he is expected to pay maintenance. There is a practicality that at the moment things do not work. You have to have a system that is affordable. If it is not affordable, it does not work. You have to have it be fair and reasonable. Otherwise, the ones with more money will be very unhappy at paying it and will look to evade.

Donald Hirsch

We have certainly, for three decades or so, been struggling with balancing fairness with simplicity, because I think the previous system was just seen as too complex. I am not an expert in child maintenance and would not presume to propose a new system. On looking at what its outcomes are, I think it is quite a significant thing that back in 2009 and 2012, I think it was, the legislation brought in this presumption of shared care if that were possible, and now we are taking that away. I think that as part of any review, you would want to think very carefully about how you can continue to enable shared care where that is appropriate on safeguarding and things like that, but not to go back to the system where, before all this, it was about custody. Basically, the idea was that one side had custody and the other one did not. If we do believe that it is good for children to grow up with a relationship with both parents, we have to make sure that we are not making that impossible from an economic point of view.

Chair

That is very fair.

Dr Davies

Can I come back?

Chair

I was just going to ask Mari if she wanted to add anything, if that is all right.

Dr Davies

Indeed, that would be helpful. Thank you.

Mari Haapanen

Yes, it is okay. I do not have anything to add here. Thank you.

Chair

Thank you. Go on, Christine.

Dr Davies

I was forgetting what I was going to say.

Chair

The final word.

Dr Davies

We talked earlier about the interaction with Universal Credit and, picking up on what the Social Security Advisory Committee said in their report, there was one thing they asked the Government to do—they said there is no joined-up policy for dealing with separated parents. That is something that has to be looked at, because at the moment, because there is no such policy, we have this interaction with Universal Credit. We talked earlier about the differences in how Universal Credit deals with the two parents, but the interaction of these two things is what produces marginal tax rates of over 100%. The actual details have changed over the years as various things have changed, but that interaction is a problem. Possible ways forward have been suggested, but this involves looking at the two families, and looking at what they receive, before you decide what the child maintenance should be. The suggestions that were made to me did not then look at what the child maintenance should be when you get to that situation. That joined-up thinking, joined-up policy for dealing with separated families—in Australia, the concept exists. In this country, it does not.

Chair

Thank you so much, all of you. This has been very helpful and illuminating, helping us to think through some of the gaps. We are coming up to the end now. I would like to thank Christine, Donald and Mari for joining us in the second panel.