Work and Pensions Committee
Oral evidence: Children in poverty: Child Maintenance Service, HC 272
Wednesday 19 October 2022
Ordered by the House of Commons to be published on 19 October 2022.
Members present: Sir Stephen Timms (Chair); Neil Coyle; Steve McCabe; Nigel Mills; Selaine Saxby; Chris Stephens; Sir Desmond Swayne.
Questions 54 - 107
Witnesses
I: Dr Christine Davies, Honorary Senior Lecturer in Mathematics, Royal Holloway University of London; Professor Esther Dermott, Professor of Sociology and Social Policy, University of Bristol; Dr Jon Symonds, Senior Lecturer in Social Work with Children and Families, University of Bristol; and Dr Mia Hakovirta, Department of Social Research, Turku University, Finland.
Written evidence from witnesses:
- Professor Esther Dermott, Professor of Sociology and Social Policy, Dr Jon Symonds, Senior Lecturer in Social Work with Children and Families, University of Bristol
- Dr Christine Davies, Honorary Senior Lecturer in Mathematics, Royal Holloway University of London
Witnesses: Dr Christine Davies, Professor Esther Dermott, Dr Jon Symonds and Dr Mia Hakovirta.
Q54 Chair: Welcome, everybody, to this session of the Work and Pensions Select Committee for our inquiry on children in poverty and the Child Maintenance Service. A very warm welcome to the four witnesses who are joining us this morning, three in person, one virtually. I will ask each of you very briefly to tell us who you are.
Dr Davies: I am Christine Davies. I discovered about 11 years ago that there were problems with the child maintenance calculation regulations and I have spent all the time since then trying to get this put right. I am a mathematician by profession.
Professor Dermott: I am Professor Esther Dermott, Professor of Sociology and Social Policy at the University of Bristol. My areas of research are around parenting, families, particularly fatherhood in the past, and also measures of poverty.
Dr Symonds: I am Dr Jon Symonds. I am a senior lecturer in social work with children and families at the University of Bristol and my areas of research tend to focus on parenting, fathers and family support.
Dr Hakovirta: Good morning from Finland. I am Dr Mia Hakovirta from the University of Turku. My research has focused on families and family change and child support policies around the globe.
Q55 Chair: Thank you all very much indeed. The first question is to Esther and Jon. I understand you are researching at the moment the experiences of family members after separation. How much difference do you think child maintenance makes?
Professor Dermott: I think it is worth saying a little bit about what our study captures, if that is okay. Obviously, cut me off if this is too much detail. What we are capturing are the experiences and the challenges of the separation process, and included in that are all the resources that families require or find difficulties with. We are speaking to mothers, fathers and children as part of that study. It is coming out at the end of November.
Chair: You are publishing at the end of next month?
Professor Dermott: The report is being published by Nuffield on 29 November, to be precise, so a full report available then. Financial consequences of separation came across very clearly in our findings, not surprisingly, given all the research that has been done around lone parents and separation, the costs of two households and so on.
We had very clear examples of people talking about borrowing money from friends and family because they could not cope. One mother talked about how if universal credit had not existed for support, “I wouldn’t have been able to continue to live in my house.” That was very clear. Housing was a big issue. It was not just income; it was assets and access to necessities that were really important. That is the set-up of the financial situation of the people we talked to. Jon can come in more specifically to your question on child maintenance.
Dr Symonds: Most of the resident parents and some of the non-resident parents talked about child maintenance in their data. It did make an important financial difference to them. One mother talked about going on the gov.uk website and looking at the calculator. That was important because she had a small child and she needed to know that they were secure in that sense, receiving the payments regularly.
For a number of the parents we spoke to it was important not only financially but because it represented a sense of fairness in the relationship about having a shared financial commitment to their child. When it worked parents sometimes used the CMS in different ways to achieve that. We have examples of people finding the online calculator helpful in making payments. We have examples from non-resident parents, for example, saying, “I send my P60 in each year and I get told how much I should pay and it makes it very straightforward.” We also have examples of people contacting the CMS and then making that calculation before they moved out of the house so that they could set that up.
Q56 Chair: On the whole, from your research, is it your sense that this system is working okay?
Professor Dermott: It works okay for some and not for others, which is always the difficult issue. Where people did not have such tight financial resources and the payments could work, then both mothers and fathers would reflect that it was good and they could engage with it. When there have been very difficult relationships during the separation, the financial resources were tight and it was a point of contestation, then the child maintenance system often added to that. It was another point of tension and difficulty to resolve. That was the group of parents—particularly mothers but also some fathers—who felt unhappy with the system. We felt that it depended on their set of initial circumstances who worked well with the system and who didn’t.
Q57 Chair: Are you saying it was lower-income families who had the biggest problems with it?
Professor Dermott: We didn’t ask directly about income, but it was those who appeared to be struggling or having lower incomes or fewer resources, yes.
Dr Symonds: I would add that that has sometimes led to there being more ad hoc arrangements made between parents. That might be financial or material arrangements. That also led to concerns about the regularity or reliability of payments; sometimes it seemed like you might get a bit of money one month or some nappies, but there were concerns about it not being regular enough. Some parents would avoid using that for fear of repercussions in the relationship, for example, or not wanting third parties to get involved.
Q58 Chair: Christine, you said that you have been looking at this for 10 years now. You have argued that statutory child maintenance does very little to alleviate child poverty. Can you explain how you have reached that view?
Dr Davies: Yes. We have been hearing that for families that are reasonably okay financially and co-operate, the child maintenance system can work very well. Unfortunately, a lot of the parents in the Child Maintenance Service are rather poor.
If you go back to the Henshaw report in 2006, he found that many of the parents were in low-paid, insecure work and that basically they should not be part of the system. When we are looking at poverty in separated families, quite often these families are in poverty before they separate, and after they separate both parents are in poverty. Child maintenance in that situation does not really help the parent with care because the amount that would be moved over to the parent with care is very small, if it was paid. However, because the regulations do not work for those on low income, quite often that money is not paid in any case. The parent with care gets all the support from the state that they would; the child maintenance is completely disregarded in the amount of support they get from the state. The child support is an additional extra, but for those on low income it is a tiny amount compared with what they are getting from the state. It cannot be paid in any case, so it doesn’t happen.
Q59 Chair: What is your conclusion about what should be done to overcome the difficulty you have identified?
Dr Davies: The Department has recognised that it needs a change in primary legislation. It now admits that there are problems with the regulations, that they do not work for people on low income, and I have spelled out two of the reasons why. One, for example, is the thresholds at which you start paying more than a nominal amount. That was set at £5 in 1998. The threshold was £100. That was 20% above the rate at which you started paying income tax. If you move that forward to now, that would be that you did not pay anything more than a nominal amount until you were earning more than £15,000. Someone earning £15,000, according to the intention of the scheme, should be paying seven times 52—£364—a year, instead of which they are asked to pay £3,500.
Q60 Chair: If some low-income paying parents were not asked to pay as much in the future as they are at the moment, do you think the difference should be made up by extra benefit payments or do you think that the receiving parents should just forgo the income that they are due to receive at the moment?
Dr Davies: I said a moment ago that the child maintenance is a bonus on top of what the state believes that the parent with care’s family should receive. The non-resident parent could be paying £1,000 a week or nothing, and the parent with care gets the same amount of money. It is not a matter of making up something; it is an additional bonus.
Talking about these low-income people, again, if you go back to the Henshaw report, what it said is that these people should not be in the system. They cannot really afford to pay; the system does not work for them. There were various recommendations that were made to make sure that the Child Maintenance Service did not incorporate people for whom the system did not work.
The emphasis for the 2012 scheme was that parents should be encouraged wherever possible to make their own arrangements. There were some very serious and good efforts made for this—a system called Child Maintenance Options. When someone applied, before they could submit an application, they had to phone up and talk through the various options that were available. Literature was produced for these parents and it was excellent. It was produced by people who knew what they were talking about—people like the Centre for Separated Families. It spelled out that you did not have to be having a financial contribution from the other parent if they didn’t have much money; it might be that their contribution was having the children over to stay occasionally, perhaps at weekends, or not as often as that if they lived further away. Perhaps they could pay for specific items like school uniforms or the mobile phone bill.
They went on to say, “I you decide that a regular financial payment is the way forward, then you have to have a look at this and you have to make sure that the amount you settle on between the two of you is fair, reasonable and, above all, affordable, because only if it is affordable will it continue to be paid.”
This was wonderful advice. Unfortunately, that seems to have gradually slipped out of the system and this year they have introduced a new system where all you have to do is go online and press a button and you can submit an application. The impact of this, understandably, has been a 68% increase in the number of parents now applying. In the last quarter to June, 32,000 new applications were received, so more than 10,000 parents a month are now being drawn into this system—a system that is broken.
Professor Dermott: I just want to emphasise that the United Nations convention on the rights of the child does say that both parents, even if they are ex-partners, should continue to support their children. I think that allowing a non-resident, non-main-carer parent to not take on that role as a principle is quite a radical move.
As Jon suggested, the non-resident parents are most commonly fathers. Those fathers want to be able to contribute financially as part of the whole package of caring and taking responsibility for their children. I am not sure that an opt-in for non-resident parents, if they feel like buying a uniform or if they happen to have some money that week, is necessarily going to be a solution for those non-resident fathers having a serious level of engagement consistently with their children, and nor is it going to provide the lone mothers, for the most part, with a consistent amount of income to do that care. I think that would be a radical move and would be quite a retrograde step, given levels of poverty.
Chair: Your mention of the UN perhaps paves the way for our next question.
Dr Davies: Sorry, before that can I just come back? In fact, what Esther is complaining about is actually what happens now, in that the parents are being encouraged to make their own arrangements outside the statutory scheme.
Q61 Chris Stephens: I have some questions for Dr Mia Hakovirta from Finland. Good morning. From your research, how strong is the link between a Government’s child maintenance policies and child poverty? Does this link vary greatly between different European countries? What causes that variation? Is it Government policy, how parents respond to it, or other factors?
Dr Hakovirta: Thank you. We have examined the effects of receiving child support on poverty by comparing child poverty rates before and after child support for those who receive any support. Our results shows that when child support is received it reduces poverty in most countries, but of course there is a variation in the magnitude of the effects. For example, in Finland and in the UK, child support reduced child poverty by 30% or more, and in some countries the reduction is less than 20%.
Even though child support does not result in a substantial reduction in poverty for all lone parent families, it would reduce child poverty much more if all children entitled to it received child support. The challenge is that a substantial amount of single parent families and children do not receive child support from the non-resident parent. Some statistics—for example, European Union statistics on income and living conditions—show that in Denmark, Austria or Poland, for example, 60% of single mothers receive some support, but that it is less likely in the UK, for example, where it is only about 30%. The core issue is that low receipt rate of child support.
Some countries have approached non-payment by providing a public guarantee of a minimum amount of child support for every child. This guaranteed child support scheme means that the child can receive some support from the Government if the non-resident parent does not pay or does not pay the full amount. Most European countries have this guaranteed child support scheme. It seems that in those countries where there is a guaranteed scheme, child support can reduce poverty among single mother families most, because it guarantees at least some support for those children.
Q62 Chris Stephens: Are there any particular countries that are working best at using child maintenance policies to limit child poverty? Are there any countries that you think are doing that better than us?
Dr Hakovirta: It is a very difficult question, but at least those countries that have some kind of guaranteed support provide some support for all children with separated parents. There is some security that child support is coming every month and in that sense it can reduce poverty.
I wrote an article with my US colleagues for the Annals of the American Academy of Political Science on child support in high-income countries. We found that many countries face very similar challenges in their policies. Our conclusion in that article was that instead of focusing on enforcement and punishment, the key policy implication is to strongly consider this guaranteed support, given the limited incomes of lone parent families and difficulties in calculating adequate support amounts, and uncertain labour markets, especially for low-income fathers’ ability to earn enough income to pay child support. Our view is that a guaranteed support programme with modest generosity, targeted to those who have orders and providing some additional resources to those with low orders would be very beneficial for children and lone parent families.
Q63 Chris Stephens: You touched on this in your first answer: are there any European welfare systems that have low child poverty but have little or no reliance on a child maintenance system?
Dr Hakovirta: Sorry, can you—
Chris Stephens: Sorry, I will repeat that. Are there any welfare systems in Europe that have low child poverty but have little or no reliance on a child maintenance system? In your first answer, you referred to some countries looking at having some universal system support for children. Are there any European systems that have little or no reliance on a child maintenance system but also have low child poverty?
Dr Hakovirta: In the Nordic countries we have quite high child poverty rates among single mother families. It is much higher compared to families with two parents. In the Nordic context, although we have this guaranteed child support system, still the amount of child support orders are quite low. Single mothers rely more on the income from the labour market instead of from non-resident fathers or—I don’t know if I can answer. I can try to find more information on that question and come back later.
Chris Stephens: Okay, thanks very much.
Q64 Sir Desmond Swayne: What is the purpose of the fees that the receiving and paying parents pay, and is that purpose being achieved?
Dr Symonds: We had a couple of parents who talked about this. For both of them it acted as a disincentive. They did not see that there was any benefit to it and in some ways it put them off pursuing the collect and pay arrangements, which for one mother in particular was a real source of distress because the arrangements under direct pay were not working. Her ex-partner was not paying. He had changed his employment status to self-employed, the payments had stopped and, as a result of that, she went towards collect and pay. Because of the charges that were incurred, there was pretty much a common view among the parents we spoke to that the fees penalised both parents. They did not see the point of it.
Dr Davies: The intention of the fees was to encourage parents to make their own arrangements rather than using the Child Maintenance Service. This is why there was a £20 application fee to start with and then the charges for using collect and pay. The original idea was that both parents should be charged 10% for collect and pay. Pressure from Gingerbread reduced the 10% to 4% for the parent with care, and the fee—the extra charge—for the non-resident parent was increased to 20%.
Does it work? There may be some well-off parents for whom, yes, this is an incentive to use direct pay, but a large proportion of the parents on collect and pay are not parents who chose to be there. They are there because they could not afford the standard amount that was asked for. If they do not pay that, then they are moved to collect and pay. If they couldn’t pay what was there to start with, it is even worse if they are then charged an extra 20% on top. Of course, they can’t pay.
Professor Dermott: It might be that it is also the case that for the parents who are the receiving parent, they have gone into that system, as Jon said with that particular example, because they are not getting the payments that they are meant to get. Again, the system is not going to help them if the paying parent does not pay. Most parents we spoke to did not want to go through formal systems if they could avoid it anyway. Perhaps the payment option, to try to keep people out of the child maintenance system and arrange things privately, is what parents want to do if they possibly can anyway, the same way as they did not want to go through court systems if they could come up with private financial and other arrangements.
Q65 Sir Desmond Swayne: If recipients of universal credit were to be exempted from the fees, would that have an impact? I get the impression from what you have said, Dr Davies, that it would not because the problem is more fundamental.
Dr Davies: The problem is more fundamental. The interaction with universal credit is another whole set-up. Sorry, there are so many things in my head that it is a matter of deciding which things to say. There is a fundamental problem with affordability, which has been spelled out by the National Audit Office and the Public Accounts Committee and is well recognised. I think that two thirds of those on collect and pay cannot afford to pay the amount asked.
Q66 Sir Desmond Swayne: Would it help if there were a personal allowance?
Dr Davies: Indeed. I do not want to say every other country, but the standard practice in other countries is to have a percentage of income scheme, which is what we have here. The percentage is charged on an amount above a self-support allowance. In Australia it is one third of the total male average weekly earnings. We have zero so the amount is paid on the whole amount. Of course, that does not work for people on a very low income, which is where these thresholds come in.
The first threshold, which was £100 in 1998, you just pay a nominal sum. Above the second threshold you pay the full amount. The problem with that structure, when I talk about fundamental problems, is that you then have this catch-up region where you are going from the nominal amount to the full amount and a huge amount of every pound that you earn is taken in child maintenance. You can think about the situation in income tax and national insurance. You have your personal allowance. If you are earning a lot of money, paying a percentage of your whole income would probably be all right, but if you are only earning £15,000 there is a big difference between paying income tax on £2,500 and paying income tax on £15,000. It just does not work.
Professor Dermott: I will come in very briefly. I think that the central issue is whether for you as a Committee your focus is on child poverty, as I understood it, and therefore ensuring that children are not living in households that are poor. It is related but it is not the central issue about the affordability of child maintenance. Those perhaps require different resources allocated to different individuals.
Dr Symonds: From the experiences of parents we spoke to, we heard more examples of parents being concerned that payments were not being made, not through affordability but through avoidance. It leads to a question around enforcement. The collect and pay system is set up to ensure that the child receives the money to which they are entitled. There might be some discussion around different mechanisms by which to do that, but the concern of more of the parents we spoke to was that non-resident parents would actively find ways to avoid or reduce payments through employment status or through taking on parental responsibility of another child, rather than the actual income they had coming into their household.
Q67 Sir Desmond Swayne: Two thirds of agreements are not being paid in full. Where is the issue? Is it down to affordability? Lots of people come to me to complain that their former partner is a shyster who is hiding their income and avoiding it, but could quite well pay. I want to know where the difference is and what the solution is. Is the solution a reasonable personal allowance or what?
Professor Dermott: You are in the situation where child maintenance is not being paid. Aside from some of your constituents, who may be right or wrong in their assessment, you have a group of people who were probably living in poverty before they separated. Their two households will now be quite poor in separation, so there may be limited ability to pay for some of them, and there is also a very acute need for the household with the resident children in it. Those parents will feel that any additional income will make some difference. It may not bring them out of poverty, but even an additional few pounds a week can make a real difference. It is probably a broader issue than child maintenance for that particular group of people.
Dr Davies: Esther was talking about the two problems you are looking at, including child poverty. I have made the point that at the moment child maintenance is an addition. Therefore, if you are saying that there are children living in poverty, it is looking at what the state provides for families with children. You are saying that if they are living in poverty that is wrong, because the child maintenance is an extra that is not taken into account.
I am sure a lot of MPs have had experience of people coming in with their stories, and the majority of people who come are the parents with care who complain about not getting their entitlements. One of the problems is that the legislation says they are entitled to these amounts. There is something wrong when the amount they are entitled to realistically cannot be paid.
Not many non-resident parents go to their MPs, because they know it will not do any good. The case in my situation was my nephew’s. The partner found another partner on the internet. Once she had organised her council house she moved out, taking the children with her. She was not very pleased when the judge said the children should spend every weekend with the father, so she got her own back by putting an application in for child maintenance, and she knew very well he could not pay. Moreover, although the judge said the father has the children at weekends, she would not let them stay at the father’s house because that would mean a reduction in child maintenance. He was in real distress. He had been the main carer of the children when they were together, so he found it very difficult coping without daily contact. This almost pushed him over the edge, which is where I had the phone call and this distress.
I kept persuading him to do the things that I thought made sense. I said, “There must be some mistake. The CSA will sort it all out.” There was not a mistake. I said, “Go to your MP. He will fight it on your behalf.” The MP wrote to the Minister and received a reply saying, “This is what the law says—that he must pay. Therefore, he must pay. Otherwise we will enforce it.”
Q68 Neil Coyle: Can I chip in on that point? Clearly, in that example, someone did approach an MP and the MP tried to help. Speaking from my own experience, I have had non-resident parents, as you put it, come to me for help contacting agencies, but you made a statement that suggested that most non-resident parents would not come to see an MP because it would not help. I wonder what the evidence base is for that.
Dr Davies: If you like, it is colloquial, in that I have outlined the steps that I pushed my nephew to take.
Neil Coyle: Sorry, is it based on one example?
Dr Davies: It is based on one example, but he knew it would not work because, basically, if you go to Citizens Advice, they say, “The law says you must do this.” To take it right to the end, I supported him at a tribunal. The tribunal judge said, “I see the situation very clearly. Unfortunately, my hands are tied. All I am allowed to do is to say that the legislation is being followed.”
Neil Coyle: It was specifically that point. I cannot speak for colleagues, but I do not believe those statistics are published across Parliament and I do not think it is helpful to make a sweeping statement.
Dr Davies: Sorry—I don’t know—but when I listen to debates in Parliament, the stories always come out about the parents with care who are left in distress. I don’t often—sometimes I do—hear people speaking up on behalf of the non-resident parents, and usually it is when the Child Maintenance Service has made a mistake and it is something that they know something can be done about, or they hope something can be done.
Professor Dermott: I think that our qualitative findings, which are expressing people’s accounts, reflect your sense as well. That is our current research. There is the larger quantitative research that shows that resident lone parents are among one of the poorest groups in the UK and that has been consistent and has not changed much over decades, despite changes to benefits systems.
There are a couple of examples here from the perspective that it may be that a paying parent could not pay, but in terms of finance for the kids, he pays the bare minimum and sees that the child maintenance should cover every cost for the kids. My point is that school trips are very expensive. Child maintenance is basic living costs, and birthday parties, bigger finances that affect children, should be for both parents. There may be an affordability issue, but from the perspective of the person doing the day-to-day covering of costs it is very difficult to cover both basic maintenance and other things that feel like necessities for children.
Neil Coyle: It would be great if these statistics were published because it would be useful in casework for all MPs. Thank you.
Q69 Sir Desmond Swayne: Mia, we are only collecting one third of the agreed payments in full. Do other European jurisdictions have a better record and why might that be?
Dr Hakovirta: Unfortunately, I do not have comparative statistics on that but, for example, in Finland we have very similar numbers if we look at those children who get guaranteed child support. About one third of those who receive guaranteed child support receive it because the payment from the non-resident fathers is lower than is in the order. In the Finnish perspective, we have a very similar record, but I don’t know the case for other countries.
Q70 Sir Desmond Swayne: So, comrades, this is the issue. The minimum payment is £7, which is derisory when it comes to the cost of maintaining a child, but a significant proportion of paying parents cannot afford £7. What is the answer?
Professor Dermott: The $64,000 question, not £7.
Dr Davies: It is going back to the basic structure, isn’t it? If the parents had a personal allowance, a living cost, then you are not asking for money that cannot be afforded. That £7, if you are earning less than £100 a week, is also what is deducted from your benefits if you are out of work.
The rather interesting figures are that 33% of parents on collect and pay are due to pay by deduction from benefits. For only 64% of those is the money transferred, because these parents are in debt. There are deductions made from their universal credit to try to avoid them being evicted, for example, and there is a cap on how much can be deducted from universal credit. What happens is that when the priority is rent to avoid eviction, whatever is being paid, there is not enough left to deduct the £8.40—because it is £7 plus 20%. There is not enough left to make that deduction, which is why you sometimes get parents with care saying, “I only get £7 and I don’t even get that.” They do not get that because the Department cannot get that money transferred. That is an indication of the situation of these parents.
What concerns me with a lot of these things is the reaction of the Government. They are looking for legislation to say that instead of deducting £8.40 you can deduct up to £8.40, so if there is only £5 left you can transfer that, minus the 4%, of course, that the parent with care is not going to get. The amount of money that must be involved in trying to transfer these tiny amounts—and, of course, what is not paid goes on to the arrears. It is a nonsense situation where you have a system that is laid down in law that means people on low pay cannot obey it.
The National Audit Office and Public Accounts Committee reports spell this out very clearly. They mentioned the rate at which arrears were accumulating and they cited £1 million a week. It has gone up since then to £1.6 million a week. Both those reports said there is no way in which these arrears can be reclaimed because the money simply is not there. If the money is not there, to have legislation that says, “Notwithstanding this, you are legally bound to pay it” is a nonsense situation.
Dr Symonds: I do not think child maintenance will be the only lever to address child poverty. If you look at some of the work of Susan Harkness at Bristol, the lone parents are more likely to be in poverty than two-parent families. The parent who has done the majority care of the child before the separation is likely to carry on doing the majority care for the child afterwards and so is more likely to be in poverty. There are other levers that can be used around affordable childcare, employment and so on.
On the issue around £7 a week and whether that is too insignificant a number, for some parents we spoke to who were caring for their children the majority of the time, £7 a week is not enough to lift them out of poverty but it makes a real and material difference to their lives. If you are on very low income anyway, £30 a month does make a difference if you are struggling to manage the bills or food. Whether that is set at the right level or not is a question for policy makers, but to say that it does not make any difference at all and it is not worth pursuing would not be well received by some of the parents we spoke to.
Professor Dermott: A controversial view might be that, given that the biggest factor in child poverty is the earning capacity of the parent who the child is living with, if money for some of those schemes was put into better childcare support systems, that would allow resident caring parents to work at higher levels, provided the level of income—their earning capacity—is better. That might make more of a difference to child poverty.
Chair: Thank you. We need to speed up a bit.
Q71 Nigel Mills: A lot of what I was going to ask has been covered. Can I look at the interaction between universal credit and child maintenance? Christine, you sent us some calculations from your mathematics days—reliable calculations—that show that by the time you have had your UC withdrawal and tax marginal rates plus the child maintenance calculation, you can end up with somebody doing more work and ending up with less money. Is that still the situation we see now?
Dr Davies: It is still the situation. The reduction of the taper rate recently makes a little bit of difference but not very much. There is a real danger in the way they deduct child maintenance and the way in which it is worked on gross income and does not take account of various things like whether you are getting welfare support. When the earlier cutback on welfare benefits occurred, there was a suggestion that they should increase the taper rate to 75%. That did not happen, but that would mean people losing something like 20p for every pound they earned.
This interaction is a problem that is recognised by the Work and Pensions Committee. The breakthrough came with the evidence to the previous Committee’s report on child maintenance in 2017. In July that year, the new Minister asked the civil servants to look at the evidence I had submitted. In January 2018, at a meeting with the Department for Work and Pensions and Families Need Fathers, the opening line was, “There is no dispute there is an issue here.”
There is an issue. It can be that between £100 and £200 you can lose money for every pound you earn. After that you are something like £2 or £3 better off for every pound you earn. This means people cannot afford to be in work. This links up with people going self-employed. What do you do if you put someone in a situation where they cannot pay?
Q72 Nigel Mills: Have you updated your calculations for the increase in National Insurance?
Dr Davies: Yes, the figures I gave to the Committee included that.
Q73 Nigel Mills: That will have helped, will it not, because presumably the lowest levels of earnings now do not have the 12% or 13% national insurance loss?
Dr Davies: This problem has been there since 2003 when the scheme was introduced. At that stage it was working tax credits and the interaction with working tax credits, which meant you lost money for money you earned. It did not make a significant difference. The people on low income receive universal credit because they do not have enough of their own resources according to the state’s judgment. According to the state’s judgment, they need help from welfare support, but at the same time you are taking a big chunk of their income away and giving it to the other parent, who already has all the state support deemed appropriate for their situation.
In separated families you have to look at the two parents. It is important that both parents are involved in the welfare of their children. If they cannot support themselves, they cannot support the children. If they are driven to despair, they are not providing a good role model and being able to provide emotional support for their children. The regulations are at fault. It is now recognised by the Department for Work and Pensions that the regulations are at fault.
Q74 Nigel Mills: Professor Dermott or Dr Symonds, do you have any solutions for how we fix the interaction of universal credit tapers tax kicking in and child maintenance as a percentage?
Professor Dermott: Quite frankly, no, and in the experience of people we spoke to, most are not aware of the complexity of those systems. They are aware of the money that they receive but not those interactions. I am afraid I do not have anything else to add on that one.
Dr Davies: I can come back on that because I have immersed myself in this for so long and spoken to a whole variety of people, including someone who was involved in setting up universal credit, who started our meeting with an MP in Portcullis House by saying, “There is a solution.” It involves a lot of change. What he says is that you have to look at the hierarchy as to what happens with people’s income. He gave two alternatives. The starting point, of course, is the money you earn. The next point is the taxes you pay.
What happens after that? Do you allocate both people welfare support according to their situation and then look at the financial situation of the two people and decide how you should transfer money as regards child maintenance? Or do you transfer the child maintenance on where you are so far and then make sure you are giving the welfare support that is appropriate? Both of these hierarchies allowed the possibility of money flowing either way when parents are sharing care. The parent that gets the child benefit is classed as the receiving parent and she is entitled to child maintenance. If the share of the care of the children is 50:50, it is still the situation that the one with the child benefit gets extra money flowing in, even if that person’s income is twice the size of the other.
Professor Dermott: That is about whether you put the child at the centre and say that the income from the ex-parents comes to the child to support them, even if the individual parents may have different amounts of income, or whether you think about this as being an equalising of income between ex-parents. This current piece of research and other research is very much about putting the welfare situation of the child at the centre of all our discussions rather than viewing ex-parents as in a conflict or negotiation. That is really important and it maybe alters some of the thinking.
Dr Davies: That is very important. This was the intention when the child maintenance scheme was set up in 2008: “We want to create a child maintenance service that reinforces the principles we believe in, which promotes the best interests of children, supports successful parenting and protects children’s rights to the support of both parents.” All the good intentions were there, but what tends to happen now, as has been implied, is that one parent is thought of as the one who looks after the children and the other is the one who supplies the money. This is contrary to the best interests of the children.
Q75 Chris Stephens: Dr Davies, let me pick up on your answers to Nigel Mills. Your evidence in 2017 was pretty striking. You indicated: “A paying parent on the National Living Wage…who increased their work from 14 to 29 hours would gain just £10, or nothing, or be £10 worse off.” In 2019 the Social Security Advisory Committee confirmed your research by saying “the child maintenance formula can leave some paying parents with weak work incentives and some can be better off out of work”. Has the situation where someone can be poorer off when they double their hours changed substantially in the last three years? If that is still the case, it suggests to me that the Government’s policy to incentivise people to work more is a failed policy that worsens child poverty. Is that the case?
Dr Davies: It is indeed the case. This is one of the things that the recent reports spell out. One of the strong desires of the Government is to make sure—this is universal credit—that work should always pay, that you are better off in work than out of work, and that if you work more hours you get more money. Unfortunately, the Child Maintenance Service is set up independently of the welfare system. The fact that these two things are thought of as two disjointed things means that people cannot afford to work.
Q76 Chris Stephens: Dr Symonds, we have not yet touched on looking at this from a wellbeing viewpoint rather than a purely financial one. What is the impact on a child’s overall wellbeing if a paying parent works much longer hours but for no real financial gain?
Dr Symonds: I do not think anyone would want to argue for disincentives to work and for paying parents to have penalties of working. The principles of the parents we spoke to were more around a sense of fairness and responsibility for caring for their child. It came through in examples of disputes over whether the child would have a school uniform or go on school trips. School trips were a particular situation where there would be disagreements and arguments. If that was something that the child had been able to access before the separation and was part of family life, to then think of the child maintenance payment as a bonus on top of benefits, even though that child might not be able to go on school trips afterwards, would be a false conclusion. Where parents spoke to us about the importance of that and the way that child maintenance payments could make a difference to a child’s life, then it was enabling them to get a fuller education through school trips or enabling them to maybe go on a holiday, and that might be consistent with how that child had experienced life before.
Q77 Chris Stephens: The social part of being on a school trip with fellow schoolchildren and the stigma of not being with them—yes, that is a point well made. Professor Dermott, the 2019 Centre for Social Justice report suggests an income shares model that offers allowances to both parents. Is that where we should go or is there another way around these problems we are discussing without having to pay child-related benefits and allowances to both parents?
Professor Dermott: Dr Symonds’s response addresses some of that question in that if we work on an equal income allocation, we are not centring the focus on the child and the household that the child is predominantly living in. Some children do have a completely 50:50 share but that is not the common model. It is still more likely that the child spends most of their time with one parent, mainly the mother, after separation. If we do not look at that household and ensure it has the right income for the child not to be in poverty and not to be socially excluded, I think that we are failing in that system.
The income model focuses on some abstract sense of fairness between parents as if they are equal in all other ways, but we know that the costs of doing care before a separation mean that mothers tend to have lower wages historically through the care and those effects carry on post-separation. I do not think that is the right way to approach the question. I am slightly moving the framing rather than arguing with the statistics.
Dr Davies: Can I come back on that? What we just heard is the root of a lot of the discussions over the years and the problems with those discussions: the focus on the parent with care and not thinking of the existence of separated parents who both want to be involved in the lives of their children. Quite often they desperately want to, but there is a limit to what they can do. Running two households is more expensive than running one.
To quote from the 2008 Green Paper, “No child support scheme can work unless it recognises how hard it is to be a successful separated parent. And that is true of non-resident parents as well as parents with care. Being a good non-resident parent is demanding and difficult.” It goes on about the importance of both parents being involved and that you have to recognise the financial demands on the non-resident parent. Unless you look at both sides, unless you think of the concept of a separated family—Australia has the concept of a separated family. We do not in this country, and this is where we get these problems, because it is a natural focus to say we have to make sure more money flows to the parent with care. That may very well be damaging the family relationship.
Q78 Chris Stephens: Have you done any research around the wellbeing of a child, Dr Davies? I asked Dr Symonds that question. That is something we have not really touched on yet. Have you done any research on your suggested changes or the effect that Government policies are having on the wellbeing of children?
Dr Davies: That is not my research. My research is mathematics. Rather interestingly, the report that set up the Australian system was called “For the Good of the Children”, which I think is the focus. When you talk about the welfare of the children, in the case that set up my investigations, he could not pay. There was no way he could pay. His sister said, “Just move to another part of the country, hope they will not find you and start a new life.” He said, “I can’t. The children need me.” He continued, despite all the things that were thrown at him. He could not pay. His mother, a widow of limited means, ended up paying the amount. He could not physically pay, but he was not going to desert his children because they needed him.
Q79 Steve McCabe: Good morning. Dr Davies, I want to clarify a couple of points. I think you have addressed these already so I will be fairly brief. I want to be clear that what you are telling us is that, in your judgment, where children spend most of their time with one parent, that has an impact on child poverty.
Dr Davies: I am trying to think of the best way of answering that. If we are talking about poverty, we have already said that the family is likely to be in poverty before the break-up. Then, of course, afterwards they are both in poverty. If both parents are in poverty, the non-resident parent is unlikely to be able to contribute very much. Trying to take some of his poverty money away from him makes the situation very much worse for him. Sometimes these small amounts may not make very much difference to the parent with care, but they can affect the ability of the non-resident parent to provide meaningful contact with the children.
Q80 Steve McCabe: I want to make sure I have understood this correctly. Am I right to assume that the point you are making is about the financial impact on what we call the non-resident parent? You do not think that the actual issue of spending most of the time with one parent in itself directly has much impact on poverty. Is that right?
Dr Davies: The fact that they spend more time with one parent can be influenced by various factors. It can be that one parent has moved away and lives several hundred miles away, so there is no way that they can have regular contact. This does not mean that they are not wanting to be involved and that they visit or whatever else.
Another thing is that they may not have accommodation suitable for the child to spend time with them. Another rather dodgy issue is that in some cases the parent with care refuses to let the children stay overnight: “You can have them during the day but they have to be brought back here.” The figures on shared care that appear in the Child Maintenance Service statistics are not an indication of the desire of the parent to be involved.
Q81 Steve McCabe: Yes, I think I have that. Thank you. Do you think the way the Child Maintenance Service interacts with other benefits, like housing benefit and universal credit, is conducive to shared access or hostile to it?
Dr Davies: The basic underlying thing in all this is that the child maintenance regulations produce amounts that cannot be afforded. There is no dispute about that. The National Audit Office and the Public Accounts Committee have spelled this out and instructed the Department to investigate affordability and what can be done about it. That is the basic thing.
If you are looking at the way in which welfare support works, when the family separates, the parent with care—the one with the child benefit—gets all the support as if she had sole care of the children. The person with responsibility for children gets certain allowances. The non-resident parent, even if they have the children half the time, is classed as having no responsibility for the children and, therefore, does not get the allowances.
Just as a little throw-in here, when there was a cut-back in welfare benefits a few years ago, for some reason the work allowance for single adults, which is what the non-resident parent is counted as, which is only £25 a week, was removed. I don’t know why it was removed. Putting that back would at least be a tiny little bit that would help non-resident parents but, at the moment, they are not entitled to anything.
Sometimes, if the parents are co-operative and they have two children, one gets the child benefit for one and one gets the child benefit for the other. The child benefit is a gateway to all kinds of other benefits and then both parents get it.
Q82 Steve McCabe: These are individual arrangements?
Dr Davies: These are individual. It requires the co-operation of both parents and you cannot do it with an odd number of children, but most often the parent with care would not agree to that because they know they are better off.
Q83 Steve McCabe: I am not sure if I misheard you, so I am just trying to clarify this. Did you say that DWP deducts CMS payments before other arrears from universal credit?
Dr Davies: No, I didn’t say that.
Steve McCabe: No. That is not the position, as far as you know.
Dr Davies: It cannot be the situation because it finds that it cannot take it away because there are already deductions that have been made.
Q84 Steve McCabe: This is the key bit I want to understand. I think we have all heard your evidence fairly clearly and you are an advocate that it should be reviewed if income changes by 10% or 12% rather than the 25%. That is one of your arguments, isn’t it?
Dr Davies: Yes.
Q85 Steve McCabe: You presented this to the Department. What was its response?
Dr Davies: First of all, as background, with the CSA it was 5%.
Steve McCabe: Yes, I am aware of that.
Dr Davies: When the Child Maintenance Service was introduced in 2012, it set it at 20% and the argument was to reduce the number of times it would have to reassess people’s calculation. That was the argument. However, 20% is a huge amount. Sorry, 25%—yes. Families Need Fathers has suggested that it should be reduced and we need to remember that Gingerbread has also suggested that it be reduced.
It came up again relatively recently with covid, with the Government saying that they would guarantee to a 20% reduction. A lot of parents were then in the situation with covid that they had a 20% reduction in their income but no reduction in the child maintenance that was due. We raised this at various meetings and they said they were investigating this and they would see whether they could do it, but they never did it.
Q86 Steve McCabe: That is as far as it has got. Just tell me one crucial thing, which people often put to me. I understand this argument you make about the non-resident parent being put in a situation—you have referred to your nephew—where they cannot afford the payments. Let’s suppose the Government adopt your approach and decide to substantially reduce those payments. How would you compensate the resident parent and the child for the loss of income?
Dr Davies: Again, this is one of those things that is a zero sum. You cannot reduce one without—
Steve McCabe: No, but if it works out that the resident parent and the child are going to have less money if we follow your proposal, I am just asking what your suggestion is for how to compensate for that.
Dr Davies: Let’s go back to this thing about it being for the good of the children. The good of the children involves both parents being involved, yes?
Q87 Steve McCabe: I am not trying to be difficult here but, as you pointed out, your field of expertise is mathematics. I am asking you: if you take this money away to compensate this non-resident parent, how are you going to compensate the—
Dr Davies: Are you going to compensate?
Steve McCabe: Are you saying that we shouldn’t?
Dr Davies: When they already get all the state benefits that they would be entitled to if they didn’t get any child maintenance.
Q88 Steve McCabe: I see. I don’t want to put words in your mouth. Is it fair for me to suppose that, were you to succeed in finding a way of lessening the impact on the non-resident parent, you have no immediate proposal or no recognition that there is any need for a proposal to compensate the resident parent and the child? Is that a fair assumption on my part?
Dr Davies: I think you can put it like that, but the basic thing is, as I say, if you cannot pay it does not make sense to have legislation that someone is unable to fulfil.
Q89 Steve McCabe: I understand the argument you are making. I was simply trying to establish whether you recognise that there is a financial impact, and I think we have that.
Can I ask the rest of the panel: is that a view you would share or do you have concerns that this approach might not be conducive to the financial welfare of the child?
Professor Dermott: Yes, we have concerns.
Dr Symonds: Yes, very much so.
Professor Dermott: Lone resident parents—I am sure Mia would be able to talk about this across a whole range of European countries; it is not just the UK—are among the poorest categories. Whenever you do analysis of poverty and living standards, whether you include necessities and assets as well as just income—which is important—pensions and so on, lone resident parents are an extremely poor group. Therefore, I think anything that takes even small amounts of money away from that group is going to have an impact on those parents and the children living in those households.
If this kind of shift was going to be put in place, at the very least something else would need to be put in place state-wide to ensure that children are not further placed in poverty with more restrictions on their life chances and wellbeing.
Q90 Steve McCabe: Likewise, I don’t want to put words in your mouth, but am I hearing that what you are saying is there would be a need for compensation and probably the state would have to provide that compensation?
Professor Dermott: I cannot see an alternative to state provision but you might be better than me at coming up with creative solutions.
Steve McCabe: Thank you.
Q91 Chris Stephens: Apologies to the panel in advance: I have visitors from Scotland, so I will be leaving shortly after asking this question.
Dr Symonds, we have heard about non-resident parents contributing outside of CMS, providing childcare and retail items or covering ad hoc expenses like the school trips example. Would policies encouraging this be more effective in alleviating poverty than the current system, and could these extra contributions be measured in practice?
Dr Symonds: As it was originally set up, there was a real emphasis on the importance of these payments being regular and predictable and of the same amount, so I would have concerns about any proposed move to use ad hoc arrangements instead.
Dr Davies makes a couple of points around shared care arrangements. There is something important about taking some of those into account in terms of how many days in a week the child is staying with each parent. I have to say that, although there were some examples in our study where there were 50:50 arrangements—and those arrangements tended to work fairly well—when one parent had moved out and the child was spending most of the week with the resident parent, it was more common in our data that the resident parent was quite keen on the non-resident parent having more contact with the child and spending evenings with them or birthdays or annual holidays. There are examples of them not doing that—of dropping contact.
In terms of making some kind of contribution around that, yes, it was an important thing to consider. I think that there are ideas around whether it should be incorporated into the central payment, but how you would go about calculating that would be quite a complicated process, I think.
Professor Dermott: Can I just add to that? I think some of the points of contention that we heard were where there were discussions about, “Oh, the amounts of money aren’t the same every week or every month” or, “Are you going to pay for this event?” or, “This is coming up”. Actually having some sense that there is a certain amount—when the system worked well, there was a sense of, “I press the button and that sends the money off. Good, I know how much I am paying.” The receiving parent knew how much they were getting. So, it is an add-on, but as a replacement it has a lot of risks.
Q92 Chris Stephens: To what extent, Professor Dermott, does the current system recognise additional costs to a parent whose child spends more nights with them? That should be encouraged, obviously, as Dr Symonds was saying. Does the current system recognise that additional cost to a parent with a child who spends more nights with them, or is it possible for the extra cost to be recognised?
Professor Dermott: I am going to half-answer the question, perhaps. I don’t know if that is good enough for you.
Chris Stephens: You would be very good in politics, Professor Dermott, if you are only half-answering questions.
Professor Dermott: What came across really clearly in our results is that separation is a process. The situation of the ex-parents changed a lot. There might be a situation to start off with where the father leaves, the child spends all their time with the mother, and then they get into a better situation where they share some care. Then somebody re-partners and the whole situation changes again. I think it is the personal relationships that influence the organisation of children. It would be good if the financial situation could reflect that movement, but that is a very complex and very dynamic system, if you like. If the system is not working excellently at the minute, including all those, it is going to be even more complex.
Dr Symonds: There is an interaction with work as well. That came up as an issue for some non-resident parents who were fathers, who had contact maybe one evening a week and weekends. That was pretty much the standard arrangement with the parents that we spoke to. Although they said that they wanted to have more contact, they felt their employment arrangements were an obstacle to doing that. For example, one father said, “I might pay a little less or pay less child maintenance if I had them more”—his children—“but I have a job that I need to maintain and I need to keep performing in. I need to bring the money in.” So, for him, the priority was very much around meeting the requirements of his work. That enabled him to make his child maintenance payments, which he was very willing to do, but it did mean that he did not have care of the children for more than what he had already—maybe one evening a week.
Chris Stephens: It gets back to one of the earlier questions, Dr Symonds. Those are all the questions I have. If there are any additional points you want to make about wellbeing—because that is something we are very interested in in trying to fix this—we would be more than happy for you to write to the Committee. Thank you.
Q93 Selaine Saxby: Good morning. Christine, CMS currently holds no data on receiving parents. What data should it collect and how might this be used to reduce poverty for separated families?
Dr Davies: I think there is no policy for it at the moment to be interested in the financial situation of the receiving parents. I do not know whether that will be changing because there is a new system set up: “Get help arranging child maintenance”. There is some reference to it monitoring the kind of people who apply, so whether there will be information that comes from that I do not know.
The word “fairness” was used earlier. When a family separates, the financial arrangements, if you have a child maintenance system, need to be seen to be fair, reasonable and affordable. It is hard if the parent with care is well off and the other person isn’t and is expected to pay. One story that comes to mind, which illustrates the complexity of family life nowadays, is that my ex-stepmum has a four-bedroom house and two horses. My dad lives in a bedsit and cannot afford to feed himself, yet he was expected to pay.
Q94 Selaine Saxby: Thank you. A wider question to everyone: how effective is the guidance on managing finances after a separation and navigating CMS? Do you feel parents need more information?
Professor Dermott: Parents would like more information. Something that may be slightly more positive is that a number of the parents we spoke to found the online calculator very useful. They did use it as a go-to resource.
Dr Symonds: That is true. We have several examples of people saying, “I went to use the calculator. I put his earnings in” or, “I put my earnings in. We used that as a basis for the arrangement where we went forward, and we didn’t use the CMS any further.”
Dr Davies: Can I just come back on that? For the people who can afford to pay that is a very sensible way forward, but for the people who cannot afford to pay the online calculator says, “I am entitled to this amount.” The fact that the non-resident parent cannot pay it is an irrelevance. It is their entitlement. It is going back to the regulations. If it produces an amount that cannot be paid, it is just the source of a whole range of problems.
Dr Symonds: It is true that it gives a rough calculation. We also have examples of people then going through the full assessment, and the outcome of those two assessments was that the non-resident parent ended up needing to pay less than the original calculation had shown on the online calculator. If there was some need for further information, it could be around having some more detail in that calculation so that people felt they were more likely to get an accurate calculation as a result of it.
Q95 Nigel Mills: Mia, sorry, we have kept you quiet in Finland for a while. Could you perhaps just help us out with the international position? Do you have any examples of any other countries that do this better that could fix this for us? I think we have heard the Australian example of combining both parents’ financial position into one and then spitting out who needs what. What would be the best way forward from your understanding of international experience? Whose model is the one we should be following?
Dr Hakovirta: Yes, this is very challenging. A good system would work well for both parents and the focus should be on children’s welfare. A good system should increase the income of the single mother families and the income of children living in those families. On the other hand, it can drive those paying parents into poverty. It is challenging especially for low-income fathers who cannot pay child support. In this case, the Governments of some countries provide support if non-resident fathers cannot pay. This is one answer.
In other countries we have seen changes in the living arrangements in post-separation families. The children are not only living with the mothers. In Nordic countries about one third of the children are living equally with both parents after separation. In these cases, child support is very challenging. In many cases, parents do not pay child support because they both equally take care of their children. In some countries, child support orders are keeping it at the same level as it would be in cases where the child lives only with the mother. In most countries, there is some lowering in child support orders in shared care cases.
All these approaches have advantages and disadvantages but, as a whole, we should consider the children and consider that the child support is money to cover the cost of children, and not think so much about equality of income between the parents.
Nigel Mills: Thank you very much. Professor Dermott, I think you wanted to comment.
Professor Dermott: I was just going to come in a little bit on that, although Mia is definitely much more of an expert in the international comparison. I think one of the issues about cross-national comparison is you are never comparing like with like. We are not just being academics saying it is difficult to do it, but we have more children born into single parent families, with divorce not necessarily the most common route. We have different practices about shared care. We have different gendered inequalities in terms of employment. All those set up a system that means it is more difficult to address the child poverty issues at the point of separation. It is an annoying answer to say I would not start from here, but there is a reason for making that statement.
Dr Hakovirta: Yes, so it is very difficult. You can’t implement one system to the other country. It just doesn’t work like that.
Q96 Nigel Mills: It strikes me, from the evidence that you have given us, that we have some problems, but perhaps what we have is the least bad thing with perhaps a few tweaks, and a radical change is not really available to us. Is that a fair summary?
Dr Symonds: At the risk of also sounding like an academic, I think there is a lot more work that needs to be done in understanding the experiences of people who are involved in separations and then working upwards from there in terms of how policy can be developed that might improve the situation. I am always going to say, “More research”.
Q97 Nigel Mills: The fundamental building block we have is that in the first case it is for separated parents to work this out between them and then the state only intervenes if that is not possible. Is that the model that you think is the right one?
Professor Dermott: I think that that feels like the right model, in that it reflects what people want to do. People do not want lots of state intervention and complicated bureaucratic or legal processes if they can navigate it themselves, and they only resort to those when other things are falling apart—possibly when things are very fraught, because that is also a difficult time.
It is probably particular groups of parents at particular points in time who need state intervention. Some tweaks could make that a simpler process and offer more advice. More money isn’t always the answer but it may be for some of those groups of parents.
Dr Symonds: For that group they really do want the protection of the state, because that is what helps them to achieve those outcomes.
Dr Davies: Can I just come in there? The conversation you have just had is fine for people who have a reasonable income. The story we are hearing is that they co-operate and they arrange things, but to have a statutory scheme that demands of those on lower pay something that is impossible for them to do does not make sense.
Nigel Mills: You have made this point quite a few times.
Dr Davies: Yes. In fact, minor tweaks might help at that level. It does not help at the poverty level.
Nigel Mills: I was just trying to clarify the evidence from the other witnesses.
Q98 Steve McCabe: On that point, Dr Davies—I am sorry if I missed this earlier—what is a low income that means you cannot afford to contribute to the cost and welfare of your children?
Dr Davies: Okay. Let’s go back to when the system was set up in—
Steve McCabe: No, I am asking the figure. What, in your judgment, is an income that means you are unable to contribute to the cost and welfare of your children?
Dr Davies: People have different ideas on this.
Steve McCabe: But I am asking you: what is that figure? I genuinely would like to know. When you tell me in evidence that where someone cannot possibly make this payment—I understand you are saying that. I accept what you are telling me. I am asking you to tell the Committee: what is the figure at which someone cannot possibly make that contribution?
Dr Davies: The levels I have suggested in the past are things like the income tax threshold. If you look at what corresponds to the £100 in 1998, which was presumably thought of as reasonable, that now corresponds to about £15,000 a year. That was 30 hours a week at the national minimum wage. So, you could do 30 hours a week at the national living wage.
Q99 Steve McCabe: Are you saying that someone on £15,000 a year cannot afford to contribute to the welfare of their children?
Dr Davies: They cannot afford to pay the £3,500 that at the moment is demanded of them.
Steve McCabe: I see. Thank you.
Q100 Chair: Can I pursue Nigel’s question a little bit further? Looking around the world, is there a system that stands out as doing a good job in this area—that those who research these things think, “That is the one that is the best”—or is there no such system?
Dr Davies: The one that is always quoted is Australia.
Q101 Chair: Australia, okay. Can I put that to Mia? Mia, in your work, is Australia the system that stands out as the one that works best or would you point to a different one?
Dr Hakovirta: I probably would pick the Nordic countries because in cases where non-resident fathers cannot afford to pay, the Government pays. In these cases most children are receiving at least some support in separated families. These countries can reduce poverty more because more children are receiving such support.
Chair: Which country are you referring to there?
Dr Hakovirta: In cases like Finland and Sweden and also Norway.
Q102 Chair: Let me ask if Professor Dermott or Dr Symonds have a view anecdotally about this. Is there a system that you have heard about that you think is doing a good job?
Professor Dermott: Finland and Sweden are the ones that get highlighted. In your intro literature review, there is always a reference to some of those points, and part of it is about expectations of shared care as a starting point in those countries as well, as Mia said. Yes, I would agree with her.
Dr Davies: I just wanted to add in Spain, which apparently has done a recent trial. I do not know the details. Michael Lewkowicz of Families Need Fathers knows all about it, but that is producing very good results, having a different attitude to child maintenance and families.
Q103 Chair: I think he did refer to that in his evidence to us at an earlier session, so thank you for reminding us of that.
A final question to you, Dr Davies. You have told us you have been making these points to the DWP for a decade. Why do you think nothing has changed in that time?
Dr Davies: Just a clarification: the first approach was 2012 when I met the Minister. Nothing happened at all at that stage. The big step forward was my evidence to the Work and Pensions Committee in 2016-17. Then it admitted there was a problem. It had done a huge amount of work investigating the scale of the problem and its thoughts were to see what could be done within the present legislation.
It is a complicated issue. It was complicated at various times by Ministers changing every few months and the civil servants saying, “We have to break them in gently. There are lots of other things on their table as well as child maintenance.” Then, of course, things like covid messed things up, or they say, “The Government are leaving the European Union.” They said, “Everyone is far too busy with this at the moment. We can’t progress.” It is a very complicated situation.
Q104 Chair: Do you think the DWP has some ideas about what should be done that it just has not got around to legislating yet or—
Dr Davies: The meetings we have regularly—Michael, myself and the Department for Work and Pensions. It was every three months and then it went to every six weeks when covid came along. In the early days a lot of the work was shared with us, a lot of the research it was doing. This has not happened more recently. We are told that it is working on things but it is not in a position to share with us.
Chair: Right, so it seems to be on the case but perhaps has not yet quite worked out what to do.
Dr Davies: Yes. My concern is—bearing in mind what has happened with what was set up in 1998 and progressed through to 2012 without any change, despite the Henshaw report, which did not even look at the child maintenance regulations—how we move forward in a way that makes sense and does not cause another set of worse problems.
Q105 Chair: Thank you. Professor Dermott and Dr Symonds, arising from your research—and we look forward to seeing that paper at the end of November—are there any points that you would like to draw to our attention at this stage that we can reflect on?
Dr Symonds: Just returning to what kind of information would be helpful, providing more information for parents who are not married, who are co-habiting. There is much less clarity for that group compared with parents who are married and go through various legal processes.
Q106 Chair: The law is less clear in those circumstances, is it?
Dr Symonds: I mean the process of declarations that they might need to make and how that might impact on the decisions that they make.
Chair: Okay. That is an interesting new point.
Professor Dermott: When the report is finalised I think there will be some perspectives from children as well about the impact on them, which is something that has not been talked about in a lot of other research. We haven’t quite got there yet but that might be of interest to the Committee.
Q107 Chair: Are you able to give us any headlines on what children are saying about this?
Professor Dermott: Children are much more aware of their parents’ negotiations or of the financial circumstances than you might expect, even when they are quite young, and try to mitigate those themselves, but that is a stress to their wellbeing.
Dr Symonds: They tell us that they don’t always fully understand what is happening, that things have not been explained fully and that they would like to be more involved in the decisions around the arrangements that they have after separation.
Chair: Interesting. We look forward to seeing that. That concludes our questions to you. Thank you all very much indeed for joining us this morning and for the very helpful information you have given us. That concludes our meeting.