Research and analysis

Summary: Survey of Child Support Agency Case Closure Outcomes

Published 14 July 2022

This is a report of findings from a study about the child maintenance outcomes of separated parents who previously had cases with the Child Support Agency. The research was among ‘compliant (system)’ cases and ‘enforcement’ cases. The Department for Work and Pensions (DWP) commissioned IFF Research to carry out the research between June 2017 and April 2019.

The research complements previous research carried out in 2014-2016 using a similar methodology among ‘nil assessed’, ‘non-compliant’ and ‘compliant (admin)’ cases.

Executive summary

In 2012, the Government set out its vision for a new child maintenance system, where collaborative family-based arrangements (FBAs) between separated parents would be encouraged wherever possible.[footnote 1] As part of these reforms, all Child Support Agency (CSA) cases with on-going maintenance liabilities have been closed (commencing in 2014 and completing in 2018) and the CSA has been replaced with a new statutory Child Maintenance Service (CMS).

The aim of this research was to measure the child maintenance outcomes for parents whose CSA cases were closed. This programme of research built on an earlier programme of research among parents whose cases were in the first three segments to be closed. This research specifically covers outcomes for those in the final two segments to be closed i.e. the Segment 4 ‘compliant (system)’ and Segment 5 ‘enforcement’ cases. Segment 4 consists of cases that were handled by the CSA’s IT systems. All cases in this segment were compliant and did not have any ‘enforcement’ action in place. Segment 5 cases are ‘enforcement’ cases where the method of payment was by Deduction from Earnings Order or where other ‘enforcement’ action was in progress.

Main Findings

• By a point three months after their case was closed with the Child Support Agency, most families had some form of alternative agreement in place.
• Whereas previously all of these cases would have involved administration by the CSA, three months after their case was closed, under half were reliant on the new CMS to administer their arrangement.
• The change in systems has encouraged families to set up Family-Based Arrangements. Two fifths of ‘compliant (system)’ cases (40%) and a quarter (26%) of ‘enforcement’ cases had an FBA in place 12 months after case closure.
• By 12 months after their case was closed, Receiving Parents with Family-Based Arrangements and Direct Pay arrangements generally found these arrangements to be working well.
• The likelihood of payments being made on time and in full, and the Receiving Parent perceiving the arrangement to be working well, were considerably lower for arrangements set up through Collect and Pay, compared to those set up through Direct Pay, or FBAs with a financial element.
• 14% of families with ‘compliant (system)’ cases and 29% of those with ‘enforcement’ cases did not have any form of arrangement in place at three months after the closure of their case (and a similar proportion did not have an arrangement in place at 12 months). A small proportion of these were either in the process of setting up, or had tried unsuccessfully to set up, an arrangement with the CMS. The main reason given for not having an arrangement was a belief that the paying parent would not pay.
• Often, where a Collect and Pay arrangement was set up, this was underpinned by the Receiving Parent’s belief that the Paying Parent would not willingly or reliably pay the requisite maintenance.
• There is some evidence to suggest that the charges that apply to Collect and Pay arrangements are encouraging some Receiving parents to try Direct Pay arrangements, when they might have otherwise had a preference for Collect and Pay.
• However, the application fees or service charges associated with the CMS arrangements do not seem to be the main reason for not setting up any arrangement.

New Child Maintenance Arrangements

Approximately three months after case closure, the majority of Receiving Parents had a new maintenance arrangement in place. The proportion of parents with new arrangements was higher among those in the ‘compliant (system)’ segment (86%) compared with those in the ‘enforcement’ segment (71%).

Family Based Arrangements (FBAs) were the most common type of arrangement in place after three months for families with a ‘compliant (system)’ case. These cases were significantly more likely than ‘enforcement’ cases to have an FBA (45% compared to 27%) or a Direct Pay (29% compared to 19%) arrangement in place after three months. Conversely, ‘enforcement’ cases were more likely to have a Collect and Pay arrangement (22% compared to 9%) after three months.

In nearly all cases (93% in the ‘compliant (system)’ segment and 90% in the ‘enforcement’ segment), the FBAs that families had put in place involved providing a regular set amount of money and hence could be considered a financial FBA (as opposed to an arrangement based purely on other forms of shared responsibility such as sharing childcare or ad-hoc financial payments).

Overall, the type of arrangements in place remained broadly stable at both the 3 month and 12 month points.

The proportion with no arrangement in place 12 months after their case was closed stood at 16% for the ‘compliant (system)’ segment and 24% for the ‘enforcement’ segment. The main reason that receiving parents gave for not having an arrangement in place was that they did not believe that the paying parent would pay.

Deciding on new arrangements

Around half of Receiving Parents (45% in the ‘compliant (system)’ segment and 58% in the ‘enforcement’ segment) mainly made the decision on the new arrangement themselves, while the decision was made jointly between the Paying and Receiving Parents in 33% of ‘compliant (system)’ and 22% of ‘enforcement’ cases. Only a minority of arrangements were decided by the Paying Parent predominantly, and even fewer by the CMS (5%).

Wherever possible, the government would like parents to make arrangements for child maintenance themselves without involving the CMS. Hence Receiving Parents who had a CMS arrangement were asked to give the main reason why they had chosen to have a CMS arrangement instead of an FBA. The two most common main reasons given were because:

• They felt the Paying Parent would not pay otherwise, and;
• They thought the Paying Parent was more likely to pay if the CMS was involved.

These cases had been paying at least some of their liability under their CSA arrangement but for some Receiving Parents there was a lack of confidence that the Paying Parent would continue to pay.

Conversely, those who had an FBA in place were asked the main reason for having an FBA instead of a Direct Pay arrangement. Reasons given were generally positive:

• Most commonly, Receiving Parents chose to have an FBA because they thought it was easier to make than a Direct Pay arrangement.
• Other factors given as the ‘main reason’ included that Paying Parents were able to communicate in such a way that meant the CMS was not necessary: that Paying Parents had a ‘good relationship’ or that they were able to talk about money.

In qualitative interviews, Paying Parents with FBAs also mentioned that they felt that there was less stigma attached to having an FBA than an arrangement through the CMS and that it felt like a more grown-up arrangement.

Where parents are using the CMS, wherever possible it is preferable for them to use the light touch Direct Pay service rather than a Collect and Pay arrangement. Hence, Receiving Parents who had a Collect and Pay arrangement were all asked what the main reason was for selecting Collect and Pay instead of a Direct Pay arrangement. By far the most common reason was that the Paying Parent had a history of not paying maintenance (mentioned by around three-fifths as the main reason) indicating that Receiving Parents chose Collect and Pay in order to guarantee they would receive maintenance payments. The fact that Collect and Pay cases were less likely than Direct Pay cases to receive maintenance payments in full and on time indicates that Paying Parents’ record of not paying maintenance often persist with the CMS.

There are fees associated with using the new CMS service. A £20 application fee applies to both Direct Pay and Collect and Pay services, although it is waived for victims of domestic abuse. In addition, for the Collect and Pay service, an ongoing charge of 20% on top of the maintenance liability and 4% from the maintenance received applies. Generally, the payment of the £20 application fee fell to the Receiving Parent, but most found it relatively easy to afford. The Receiving Parent paid in around six in ten (56% of ‘compliant (system)’ cases and 63% of ‘enforcement’ cases) instances, while the Paying Parent paid in only a small minority. In around one quarter of cases, neither parent paid the fee.

A minority of Receiving Parents who were using the Direct Pay service rather than Collect and Pay stated that they had made this decision mainly to avoid the fees associated with Collect and Pay (22% of ‘compliant (system)’ and 17% of ‘enforcement’ cases using Direct Pay).

Effectiveness of arrangements

In order to determine how effective new child maintenance arrangements were perceived to be, the survey asked Receiving Parents about: the frequency of receiving all of the maintenance that was due, the frequency that payments were made on time and how well they felt that the new arrangement was working.

Receiving Parents spoke positively about FBA and Direct Pay arrangements, but less so about Collect and Pay arrangements. Improvements were apparent between the three and 12 month points.

12 months after case closure the majority of Receiving Parents with a new arrangement in place reported that they usually received all of the maintenance that was due. This varied by type of arrangement:

• Of Receiving Parents with a financial FBA, 89% of ‘compliant (system)’ cases and 80% of ‘enforcement’ cases usually received all of the money due;
• Of Receiving Parents with a Direct Pay arrangement, 84% of ‘compliant (system)’ cases and 70% of ‘enforcement’ cases usually received all of the money due; and
• Of Receiving Parents with a Collect and Pay arrangement, 43% of those in the ‘compliant (system)’ segment and 34% in the ‘enforcement’ segment usually received all of the money due. At the 12 month point, 64% of Receiving Parents in the ‘compliant (system)’ segment with a new arrangement in place and 47% of those in the ‘enforcement’ segment reported that payments were always made on time. At 12 months, 77% of Receiving Parents in the ‘compliant (system)’ segment with an arrangement in place and 57% of those in the ‘enforcement’ segment reported that it was working either ‘very’ or ‘fairly’ well. This also varied by type of arrangement:
• Receiving Parents with an FBA were most likely to report it to be working well (84% of those in the ‘compliant (system)’ and 83% in the ‘enforcement’ segment);
• Receiving Parents with a Direct Pay arrangement were less likely to report it to be working well (79% of ‘compliant (system)’ cases and 60% of ‘enforcement’ cases); and
• The proportion of Receiving Parents with a Collect and Pay arrangement who reported it to be working well was lower still (36% of the ‘compliant (system)’ and 29% of the ‘enforcement’ segment). In terms of the frequency of receiving all the money owed and in terms of Receiving Parents ratings of how well the arrangement was working, findings were considerably more positive after 12 months than after three months.

There was little change in terms of the timeliness of payments.