New Child Maintenance Service May Fail To Make Expected Savings Target

The UK’s new Child Maintenance Service, which has just recently come into force, may not in fact generate the savings that  the government was expecting, it was announced today.

The new scheme, which was designed to replace the old Child Support Agency to ensure that more children are benefiting from child maintenance arrangements. By charging a £20 admin fee for pchild-maintenance-spendingarents that need to use the service to arrange adequate payment, it is hoped that the Child Maintenance Service (CMS) will reduce government spending whilst encouraging families to work together.

Many have been criticising the new rules, saying that the introduction of an admin fee will reduce the amount of overall maintenance paid to single parents and have a negative impact on children. But the Department for Work and Pensions argued otherwise.

[quote]The old Child Support Agency often took responsibility away from parents, encouraging conflict and hostility at huge expense to the tax payer,”[/quote]

a DWP spokesperson said.

[quote]More than 50% of children living in separated families had no effective financial arrangement in place at all.”[/quote]

But it may not just be families that are at risk of losing out from the new rules. A new report has suggested that the Department for Work and Pensions’ (DWP) savings target may not be reached if more parents do not intend to reach agreements independently by themselves.

It was predicted that the DWP could save up to £220 million a year by reducing the number of applications received from separated partners. But this target all depends on the DWP’s ability to predict parents’ reactions accurately when it comes to the actual implementation of the CMS. If many parents refuse or fail to sign off the current statutory scheme, these targets will not be met.

The report went on to claim that so far, only 3590 families has opted to come a independent family-based arrangement in March, which is down from 5540 in August 2013. By 2018, ministers expect there to be fewer than 250,000 cases left on the statutory scheme, with over 800,000 having been moved to the new collect and pay system.

However, the number of families opting out of the statutory scheme may take a significant leap now that the new charges are in full swing.

If parents wish to come to an independent decision and avoid the admin charges, they can use the CMS Options service for free either online or by telephone. This helps parents work out how much child support should be paid and when.

About the figures, auditor general Amyas Morse said:

[quote]I am pleased to see that the department is proceeding cautiously and aiming to learn from experience. Significant tasks still lie ahead; however .

Delivering value for money from the 2012 scheme will depend on successfully winding up the remaining legacy cases from previous schemes, and making the necessary technology improvements.”[/quote]