Research and analysis

Summary: Direct Pay research 2017 to 2019

Published 14 July 2022

Background and aims

Direct Pay is one of two main statutory maintenance arrangements introduced in 2012 as part of an extensive programme of reform to the child maintenance system. Under Direct Pay, the Child Maintenance Service (CMS) calculates a legally binding payment amount, but it is then up to the paying parent to make arrangements to pay this to the receiving parent. Under the other main scheme, Collect and Pay, the CMS collects payments from the paying parent and passes them to the receiving parent. There are additional charges (20 per cent to the paying parent and 4 per cent to the receiving parent) for using this Collect and Pay service.

Direct Pay is the most common type of maintenance arrangement the CMS is involved in. However, as payments are made directly between parents, there is a dearth of robust information about how these arrangements work in practice after the initial calculation. This research was intended to fill that gap, building on earlier research on

• Parents’ decision-making process around Direct Pay
• What types of maintenance arrangements customers have in place three and 13 months after their Direct Pay calculation
• For those still on Direct Pay arrangements, parents’ reports of how these are working
• Parents’ experiences of Direct Pay, and
• Which customer groups are best suited to Direct Pay.

Methods

The research involved three main components:

• A telephone survey of 2000 receiving parents, conducted around three months after their Direct Pay calculation
• A follow-up telephone survey of 1000 receiving parents, around 13 months after their Direct Pay calculation, and
• Qualitative interviews with a small sample (30) of paying parents.

Key findings

Initial decision-making around Direct Pay

• In the vast majority of cases (93 per cent), receiving parents said the decision to contact the Child Maintenance Service (CMS) in the first instance had been theirs.
• However, views on who made the decision to try Direct Pay rather than any other kind of arrangement were more mixed – 63 per cent of receiving parents felt it had been their decision (55 per cent) or made jointly with the paying parent (8 per cent), but around a third felt the decision had been made by someone else - either the paying parent alone (13 per cent) or the CMS (21 per cent). In fact, the CMS cannot ‘choose’ which arrangement parents are placed on – in circumstances when the parents are not agreed on an option, the CMS is obliged to place new cases on Direct Pay unless there is clear, current evidence that the paying parent is likely to be non-compliant.
• Among receiving parents who said it had been their decision to try Direct Pay, 44 per cent said the charges for using Collect and Pay had influenced this decision at least to some extent.
• Around 2 in 5 receiving parents said they would have preferred a Collect and Pay arrangement rather than Direct Pay, although only 1 in 5 of all receiving parents said they were unhappy with the decision to try Direct Pay.
• Receiving parents who were less likely to be happy with the decision to try Direct Pay included: those with a poor relationship with the paying parent, including those who had no contact with them at all; former CSA clients; and those who had experienced domestic abuse.
• 42 per cent of receiving parents who had experienced abuse said they had paid the £20 Direct Pay calculation fee. The survey took place before a change of policy whereby the CMS now proactively asks parents whether there has been domestic abuse in the family which has been reported to a responsible person (e.g. police, social worker). If parents declare there has been such abuse in the family and that they have reported it to someone responsible, the application fee is waived. Maintenance arrangements after having a Direct Pay calculation
• Three months after their Direct Pay calculation, 85 per cent of receiving parents were either on, or in the process of setting up a maintenance arrangement. This figure fell slightly to 81 per cent by 13 months.
• In terms of arrangement type, 69 per cent of receiving parents were still on Direct Pay three months after their calculation, while 14 per cent were on or in the process of moving to Collect and Pay, 1 per cent were moving to other arrangements (Family-based or court-mandated), and 15 per cent did not have any arrangement in place.
• By 13 months the equivalent figures were: 58 per cent on Direct Pay, 16 per cent on or moving to Collect and Pay, 7 per cent on or moving to other arrangements, and 19 per cent with no arrangement.
• While the nature of parents’ arrangements at three months was strongly predictive of their arrangement at 13 months, there was also some movement between arrangements between these time points – for example, among those on or moving to Collect Pay at three months, 17 per cent were on a Direct Pay arrangement by 13 months.
• Receiving parents who were less likely to be on a Direct Pay arrangement 13-months after their calculation included: younger parents; those who had experienced domestic abuse; those with a poor relationship or no contact with the paying parent; and those who had an early preference for Collect and Pay over Direct Pay.
• Receiving parents tended to attribute non-payment primarily to a belief that the paying parent did not want to pay, although changes to the paying parents’ circumstances were also mentioned relatively frequently.
• Interviews with paying parents indicated that changes in income were a key point at which Direct Pay arrangements can break down. There was also a perception among paying parents that Direct Pay calculations did not take sufficient account of fluctuating incomes or their own wider outgoings. Experiences of Direct Pay
• Among those who successfully set-up and maintained Direct Pay arrangements, the majority reported that those arrangements were working well, both objectively (in terms of receiving the calculated amount in a timely manner) and subjectively (the receiving parent felt it was working well).
• At 13 months, among those parents who were still on a Direct Pay arrangement, 95 per cent were receiving all or most of the amount, 80 per cent received payments usually or mostly on time, and 86 per cent felt their arrangement worked well.
• Across all receiving parents who had Direct Pay calculations 13 months earlier (including those who were no longer on such arrangements), around half were receiving all or most of the amount (54 per cent) and receiving payments usually or mostly on time (47 per cent). Around half (50 per cent) also felt that their Direct Pay arrangement works well.
• A minority of all receiving parents remained on a Direct Pay arrangement at 13 months, but did not receive all or most of the amount (4 per cent) or did not receive it on time (11 per cent).
• A further 23 per cent of all parents who had Direct Pay calculations were on, or in the process of moving to another arrangement 13 months later, and 19 per cent did not have an arrangement in place (and were not in the process of setting one up).
• Among parents who remained on Direct Pay arrangements, there were relatively few patterns in who was more or less likely to be receiving all/most of the amount, usually/mostly on time, or to feel their arrangement was working well. Those who had expressed a preference for Collect and Pay at three months but had nonetheless stayed on Direct Pay were a little less likely to report their arrangement was working well across these measures, as were parents who did not have a good relationship with the paying parent.
• Paying parents who had maintained their payments through Direct Pay identified various facilitators, including: aspects of the design of the scheme (acting as a ‘middleman’, sharing bank details, and the prospect of moving to Collect and Pay); service delivery and support (including clarity of communications and empathetic staff); and their own skills and attitudes (financial literacy and a positive attitude to paying).
• Barriers from paying parents’ perspective included: unhappiness with the calculated amount; challenges arising from changes in financial circumstances; and negative attitudes towards the receiving parent and/or the idea of CMS involvement in general. Support around Direct Pay
• Seventy per cent of receiving parents were satisfied with the advice they received from the Child Maintenance Service (CMS) about setting up a Direct Pay arrangement.
• In most cases when payments were not received, the receiving parent had contacted the CMS to report this. The most common action the CMS had taken was to move them to Collect and Pay. Around 1 in 5 parents who had contacted the CMS to report problems with payments said they had been unable to help.
• Receiving parents who had not moved to Collect and Pay following problems with payments attributed this to the perceived unwillingness of the paying parent either to pay, or to move to Collect and Pay. This is in spite of the fact that the CMS can require paying parents who default to move to Collect and Pay.
• Awareness of the possibility of moving to Collect and Pay was very high (97 per cent at 13 months). However, awareness of other actions the CMS can take to support Direct Pay arrangements – such as finding the other parent or sharing bank details without the parents needing to contact each other – was lower.
• A minority of parents (8 per cent in the three-month survey and 13 per cent at 13 months) had made changes to the amount or frequency of their Direct Pay arrangements. By the 13-month survey, most had notified the CMS of these changes (though this could have been prompted by participating in the three-month survey).
• Interviews with paying parents revealed mixed perceptions of support from the CMS. On the one hand, it was suggested that CMS staff had treated them with greater understanding than CSA staff and that information was generally clear. On the other, paying parents reported perceived issues with the level and timeliness of information received; difficulties getting hold of CMS staff; information sharing between staff; and perceived issues around the tone of interactions with CMS staff.