Yahoo Finance Watchdog finds £3bn in child support arrears may never be collected
At least £3bn in child maintenance payments ordered by the former Child Support Agency (CSA) may never be paid, the Whitehall spending watchdog has said.
According to a National Audit Office (NAO) report, three-quarters of the £4bn in payments owed by absent parents – some dating back more than 20 years – are considered “uncollectable” by the Department for Work and Pensions.
A further £527m of arrears is described as “potentially collectable” while just £366m is assessed as being “likely to be collected”, it says.
The report, which looks at the DWP’s handling of the winding up of the original CSA scheme over the past five years, concludes that the process of closing the cases has been slow and dogged by inaccurate assessments.
The CSA was set up in 1993 and swiftly became a watchword for Whitehall incompetence as it struggled with a series of IT problems, assessment blunders, case backlogs and poor customer service. It was was replaced in 2012 by a new Child Maintenance Service (CMS).
Closure of the original schemes – which requires finalising arrears in 799,000 active cases – has fallen behind schedule, the report notes, because 500 DWP civil servants were transferred to help manage crises and backlogs in other policy areas such as universal credit and personal independence payments.
By September 2016 the department had expected to close around 50% of the cases but had managed to close just 33% of “active” cases. It still aims to close the CSA caseload by end of 2017.
Since the introduction of the new scheme, the NAO said the department had reduced the number of enforcement actions it was taking, with a 69% fall in the number of orders issued deducting the sums owed from a parent’s earnings for the periods 2012-13 and 2015-16.
More than a third of the total arrears – £1.4bn – are owed by just 4% of absent parents. Most parents who have arrears do not see enforcement actions taken against them, with 44% falling below the £500 arrears level threshold for DWP intervention.
The NAO said that as of September 2016, there were more than 1.1m cases of arrears. Although the majority related to the old CSA schemes, 96,800 were from the new CMS programme.
While the DWP had estimated that almost two thirds of parents whose case was closed would apply to join the CMS scheme, as of April 2016 only around a fifth had actually done so. Three months after case closure, half of parents had no new arrangements in place.
The chair of the Commons public accounts committee, Meg Hillier, said: “A million and a half families rely on government-run schemes to ensure they get the right child maintenance payments. DWP must do more to make sure these vulnerable families don’t lose out from the changes.”
A DWP spokesman said: “The old system wasn’t good enough, which is why the CSA has been replaced, and today nearly 90% of parents are paying the maintenance they owe.
“We are taking enforcement action in a higher proportion of historic cases than in the past and will be publishing a strategy for addressing arrears in due course.”
