17
Examination of witnesses
Naomi Wiseman and Michelle Counley.
The Chair: Welcome to this hearing of the Public Services Committee and our inquiry into the Child Maintenance Service. I welcome our two witnesses today, and wonder if I can start by asking each of you to say who you are and where you come from.
Naomi Wiseman: Thank you. I am a family law barrister and work out of a chambers called 1 King’s Bench Walk but, today, I am here on behalf of the Family Law Bar Association. Child maintenance is a topic that straddles various different jurisdictions within family law. It is not just a financial one because, of course, we are looking at a jurisdiction that also has a welfare jurisdiction. Of course, the endpoint of child maintenance is to alleviate child poverty, and it has a welfare point to it. So, on behalf of the FLBA, I am here to help the committee and assist in any way I can, but I would not say that I am a spokesperson for the association; I am here to tell you more about my experiences in practice from a family law perspective.
Michelle Counley: I am the lead consultant at NACSA, which is the leading specialist in child maintenance. We very much work on the front line representing both receiving and paying parents when they have difficulties with the Child Maintenance Service. We can help them to navigate that system. We have been doing that for the past 30 years.
The Chair: Thank you both for giving us your time today.
Q41 Baroness Coffey: We are looking at the Child Maintenance Service, and you both have some experience of that, but take a step back. We have heard evidence that some parents have managed to get a higher amount of money calculated for their child by going through the court. Tell us why somebody would prefer to go to child maintenance, or do you think more people should be going directly to the courts to get some of these arrangements that have a legal contract at the end of them?
Naomi Wiseman: Where you need to start from in looking at this is that the Child Maintenance Service, in its initial calculations, operates what many people would view as an algorithmic and unnuanced way of calculating the amount of child maintenance that will get paid. Financial orders can be obtained on behalf of children in one of two ways. You can go through the Matrimonial Causes Act if you are divorcing and have been a married couple, or you have something called Schedule 1 under the Children Act, which in effect applies largely to unmarried couples whereby one parent makes an application on behalf of the children.
What you have in both those scenarios is very different from what the CMS approach would be, which is upfront, expansive financial disclosure. So the first stage in an application for a financial remedies order through the courts is that there is an obligation on both parties to provide what we call full and frank financial disclosure. That is an enormously onerous administrative burden at the outset. You have to consider that the reason you have that algorithmic approach with the CMS is in the hope that you get an effective quick solution, and that you can have those payments made as soon as possible, because every week that goes by without a decision being made is a week when those children are not in receipt of the funds that they need to meet their income and housing needs.
It is not necessarily the case that this system works better, but what you therefore get in having that upfront front-loading of that disclosure is that the courts are able to take a much more nuanced approach. They are able to look holistically at the financial circumstances of each family and are guided by a principle of fairness, which is why no two decisions will ever be the same. We talk about things being decided on their facts, and that has to be positive, because you tend to find that you have more buy-in from the parents who have gone through that court process. There is a level of understanding that everything has been looked at holistically and a fair outcome has been decided.
We probably do not have time in this committee for me to take you through the complexities of how the process of financial remedies works, but it is also important for the committee to understand that, via that process, most disputes are resolved early on in proceedings. A very small number of cases have to go all the way through the courts for a final determination by a judge. That is obviously a hugely expensive, onerous process. There are huge delays within the family justice system, so it is not the golden ticket.
Also, both parties participate and understand the decision. There is a degree of what we call court-led mediation. So you have your receiving party, but you are enabling your paying party to understand why this decision has been reached. You then have a paying party who understands their obligations and why they are there. Within the CMS process, when we get to that stage of there being any discretion or ability to take a more nuanced view of the family’s financial circumstances, you are far down an enforcement or appeals process, during which time that child is not receiving the money that the Government are saying that they should be receiving. That is a long answer to your question, but it is important to understand how the two jurisdictions differ in that respect.
Michelle Counley: Although our work and experience do not really involve people within the court-based environment, everything that Naomi said is exactly how it is. We see the other side of that, whereby people are in the statutory scheme; they are in the system and seeing the unfairness, and the lack of understanding, communication and disclosure. As Naomi pointed out, sometimes we do not begin to see those answers until well into the process—you might be involved in the appeals process—by which time we have already created an environment of mistrust and feeling that one parent is hiding information from the other. It becomes a conflict area rather than trying to resolve the whole situation in an amicable and fair manner.
We tend to see only people either who are not involved in the court processes because of costs, which exclude them from that, or who have been within the court process and have now come out of that into the CMS system. But I have to agree with everything that Naomi said about the court system giving that holistic, flexible, fair and understandable approach to child maintenance. Therefore, that maintenance flows to the children much more quickly.
Q42 Baroness Coffey: You have set out the two different approaches and, as you say, one is, in effect, free by going through child maintenance quickly and by it being unnuanced—as has been said. It is a formula driven by legislation. Could you give us a sense of the timing and the cost that it would take to go to court? I appreciate that there are some people who cannot do that, but I am trying to understand how people can access legal advice and support in that regard. A sense of timing and cost would be helpful.
Naomi Wiseman: That is a very difficult question to answer only insofar as you, of course, can choose to be a litigant in person. There is no obligation on you to take legal representation to court with you; you can try to do it yourself. Increasingly, you are seeing litigants in person on both sides of family law cases, relating to both financial issues and what we call contact arrangements. That, as a separate issue, is one of the reasons why the family justice system is increasingly overburdened, because the onus then goes to a judge to provide a much more involved level of intervention to assist two litigants in person—for example, a couple who have separated and do not have the resources or means. Of course, as you have just pointed out, the CMS is a free service, but would you be confident that you will get the outcome that is right for your family?
It is important to know that, within the financial remedies, you can be deciding issues such as housing—who gets to stay living in the family home and whether the father should have to take out a mortgage to purchase a house. Maintenance is obviously a small part of it, because that is, in effect, outsourced to the CMS and the family court is guided by the CMS algorithm; it cannot go outside it.
You have to pay your issue fee and then put together this financial disclosure, which is very expansive. You are talking 12 months’ worth of bank statements, any capital assets that you have, savings, shares and whether you own a company. All that has to be within your financial disclosure, as do your chattels. If you have a car, that would go in. That is a very onerous task and quite a difficult undertaking. Looking at the cost of a lawyer, the most significant upfront cost in the court system is paying a solicitor to put that disclosure together for you. If that form is not done comprehensively, and often it is not, you will bat up against delays in the system. Your first hearing or appointment often will not be a success if you do not have all the financial disclosure.
The cost of a solicitor is a difficult figure to give you, but to have a solicitor do your financial disclosure costs several thousand pounds. To be represented at the hearing is an additional several thousand pounds. Then you go on to what is called a financial dispute resolution appointment. It is not uncommon to get to the FDR stage of court proceedings and have your legal fees in the tens of thousands of pounds.
The Chair: What is FDR?
Naomi Wiseman: FDR is financial dispute resolution. Basically, there are three stages to a financial application: your first appointment; the financial dispute resolution, which is a court-led mediation—a judge helping the parties to reach agreement but not making a determination; then a final hearing, where you are inviting the court to make the decision for you. To get to the end of that process, if you are represented, would cost tens of thousands of pounds.
Michelle Counley: As I mentioned, we deal only with the statutory scheme so do not have any experience of timescales or costs for the court-based approach. My only comment is that, because Schedule 1 applications need a maximum income award through the CMS scheme before the courts can pick up on the periodical payments element, that can create a lengthy delay. Generally speaking, if that involves complexity in the paying parent’s income, it could take several years before a conclusion is made, which can then be presented to the courts for the periodical payments under Schedule 1.
Baroness Coffey: Michelle, my understanding is that parents may come to you for advice and support with the appeal/tribunal process. Can you tell us a little about the financing of that?
Michelle Counley: The process itself does not incur costs. As Naomi explained about the court process, a person can represent themselves within the tribunal process without incurring any cost at all. The problem is that it is such a complicated system to navigate that parents really need to have a good understanding. There are so many threads of the system of which they need to be aware, because they all interact with one another, which are relevant to the point of their appeal, that it is quite a difficult process to navigate without representation. There is a chance that you are likely to want somebody with that legal, technical understanding and expertise who can guide you through it. That can certainly run into hundreds or thousands of pounds. It certainly would not be the equivalent of what Naomi described, but it can exclude certain people who are on low incomes and simply cannot afford representation.
Q43 Baroness Coffey: How fit for purpose is the current legislation for providing effective child maintenance agreements through the CMS and what changes would you make?
Naomi Wiseman: Are you asking about the calculation or enforcement?
Baroness Coffey: However you want to answer, although somebody else will come on to enforcement later.
Naomi Wiseman: We have sort of identified it. An algorithmic approach, while giving you upfront efficiency, appears, when looking at the levels of debt and non-payment, not to be working. It seems that you are dealing almost with a sunk-cost syndrome, where you stick with this system because “We want the algorithm and we want it to come up with a quick answer”. However, because you do not have buy-in from both the receiving parent and the paying parent, and because there is a real lack of transparency up front about how that calculation is being arrived at—albeit it is an algorithm—there is a real sense of unfairness. As soon as you have a sense of unfairness, people feel justified in not paying. That is a psychological issue that you have to confront.
Baroness Coffey: I do not want to put words into your mouth, but could changing or strengthening legislation about disclosure duties be an enhancement?
Naomi Wiseman: I will say the word “resource” over and over again. If you have a system where the amount of information that has to be provided up front is more expansive than it currently is, are you likely to arrive at fairer decision-making? Yes, but you have to support people to provide greater disclosure. At the moment, its simplicity makes it user friendly: you just input your income. Obviously other factors are looked at—the number of nights that the children spend with each parent, et cetera—but it is a fairly straightforward system. We have to look at why it is not working. There is potentially scope, if it is properly resourced, to have a slightly more expansive application process that looks at a bit more and gives agency to both parents involved in that process to understand and to make submissions early on.
Michelle Counley: To answer your first question about whether it is fit for purpose, it has to be no. Separation is a really difficult time and emotions are quite high and raw. The simple process that the CMS applies immediately creates this unfairness that can inflame, rather than reduce, conflict. The system cannot clearly differentiate between those who cannot pay and those who will not pay; it is a broad brush across all of them.
The system is so complex that parents feel it is all fight with no guarantees of an outcome. Confidence is really low. Paying parents feel that they are victimised and not listened to—which, as Naomi said, creates unfairness that spirals into perhaps not paying. Most parents simply give up, because the process is just such a challenge to work through. That comes down through resources; they are certainly not resourced enough.
Naomi is correct in saying that a greater emphasis on disclosure at an earlier stage would help, but not if the barrier around communication is not removed. Parents simply cannot communicate effectively with caseworkers. They cannot secure adequate, effective and realistic responses to complaints and disputes. Letters and responses are just churned out; they are computer-generated responses that do not address the questions that have been asked. That unfairness begins to build and build until, eventually, there is a complete shutdown and people stop paying. So I agree with having disclosure at an earlier stage, but it has to come down to effective, better communication and training of staff.
Q44 Baroness Cass: My apologies—I may have got a bit confused. You said that you do not have discretion and that you cannot go outside the algorithm but, when you talked about mediation, you said that there is a high rate of resolving things. Do you have flexibility if the partners come to a different financial compromise that is not within the algorithm? How much discretion do you have? I am a bit confused about it.
Naomi Wiseman: How you could look at it is that, if you have two parents who are able to come to an agreement—albeit one that is court led or with the benefit of the assistance of lawyers guiding them through it, simply to give them faith in the decisions they are making—what needs to be differentiated is that, as a father, you could sign up and say that you will pay £5,000 a month, but what you have to understand is that, if it is a private agreement, that is not enforceable by the court.
What you end up with is a situation where that is accepted. When you are negotiating, for example, a holistic financial order, which will not look just at child maintenance, there is almost very little point in going outside of that algorithm because the advice you give to your client is, “Well, you can put that in place for a year but, if the other parent goes off to the CMS, they can get that amount increased or decreased”. That tends to be why the algorithm confines you in your negotiations. It is because you tend always to have an eye on this: if I have a court order, I am going to be pessimistic about it, and I need to think through how that court order would be enforced in the event that one of the parties breaches. I hope that that assists; it is because we always have our minds on enforcement.
Baroness Cass: I understand now.
Naomi Wiseman: You can sign up to anything; you have agency to do that. It is just that it will not have any legal basis to it.
Q45 Lord Prentis of Leeds: I am just wondering whether you could clarify something that you said earlier—that the courts look at income, assets and chattels. I got the impression that, in terms of the day-to-day work of the actual units that look at cases, they look at income.
Naomi Wiseman: We need to differentiate here. There is the Child Maintenance Service. If you are talking about the tribunal system that you enter on appeal, that is separate from the use of, say, the county courts for enforcement when you are talking about getting attachment of earnings orders or liability orders. Then you are talking about the family court jurisdiction. They are three quite separate things.
If you are talking about going through the First-tier Tribunal on appeal, that is the first stage at which, for child maintenance, the tribunal would look outside of the algorithm. You are able to look slightly more holistically, but it still would look only at income, really. When you are looking at enforcement orders, of course, those is much more to do with asking, “Have you got over all of the several hurdles?” You have to try every single step before you can start escalating the nature of the enforcement order that you are seeking. The family court has much greater powers to make all sorts of different orders. You can order a capital lump sum or the transfer of a property. That is very different from looking just at child maintenance.
The reason why this can perhaps assist you as a committee is, I think, because of the range of powers that the family court has. Alongside that, it has very wide discretion. It is what we call a needs-based jurisdiction; it can do what it needs to do to ensure that the children’s needs are met. This is not really something that exists within the jurisdiction of the Child Maintenance Service.
Of course, that is because it deals with very significant issues. Here, you are potentially talking about saying to a party, “Although you own half of that property and your equitable entitlement is £300,000, tough—that has to be a house for your children and you cannot access those funds until your children’s minority has ended”. That can seem a very draconian example but it is an order that the family courts make week in, week out to ensure that children’s housing needs continue to be met through their minority. I hope that helps.
Lord Prentis of Leeds: When the Child Maintenance Service is doing its casework and it comes to an understanding, is it still possible to go to the courts after that?
Naomi Wiseman: It is not until you hit what we call the top-up. If you have a Child Maintenance Service award, the family court will not go behind that unless the paying party’s income is above a certain threshold; it can then order what we call top-up payments. It is really important to understand that the family court will not go behind a CMS decision, but what it can do is make a more generous award in other aspects because the child maintenance award does not really meet the children’s needs.
The Chair: That is very helpful.
Q46 Lord Bradley: You touched on enforcement. How well do you think the Child Maintenance Service uses its enforcement powers? Again, you touched on communication. How well do you think it communicates with both the paying and receiving parents on that issue?
Naomi Wiseman: When we look at the debt level, it should indicate that there is a serious issue with enforcement. I agree absolutely with what Michelle said. Let me be very blunt with you: I have represented parties at the tribunal, but it has only ever been on a pro bono basis. As a rule, people cannot afford to pay you to go and represent them at these tribunals. Some people can, perhaps, but it has always been pro bono through the sorts of organisations that we know are able to provide pro bono advice, such as Citizens Advice or free legal advice centres.
It is quite important to draw that thread together. When you, as a barrister, meet someone going through this process, it is nearly always at the stage, when you are in either an appeal or an enforcement situation. The communication is extremely poor. People do not know what is going on. As Michelle said, they get generic responses and it is extremely slow.
The one thing that we really have to think about here is enforcement. If someone is simply not paying, as soon as they are not paying, you have a child who is being deprived, whose outcomes are, week by week, being impacted by the fact of that non-payment. We put the burden of enforcement with the agency—it is the CMS that has to take that forward—but we are really disenfranchising both the individual who is not receiving the payment and the child, because we are excluding them from the process that they need to go through in order to get what they need.
I have one example from my very lovely pupil who is sat behind me, Ella Fogg. She and Grace have done lots of research for me; I am very grateful. Let us look at something like guaranteed maintenance, which would put the debt burden on to the state. In that case, if there are four weeks of non-payment, the payment starts being made, and the debt that is created is actually a debt to the Government. I wonder whether the enforcement process or obtaining arrears might be more efficient if the debt burden were on the Government rather than on the individual, as it is in effect.
To me, that is a real issue with enforcement. You can look at the bureaucracy of it and how many hurdles you have to get over, which are extremely frustrating, but you could have a situation like the Nordic model—as I understand it, it is what they have in Sweden—where you have a set period of time and, if there is no payment, that payment gets made and, in effect, it is for the Government to go after the non-paying party. So you have all the means to enforce and to obtain those arrears, but you are not depriving the child. It seems nonsensical to me to have a system where you can have a child not receiving the money that the Government deem they should be receiving for a period of one or two years. As Michelle said, you can understand why people just give up on that system and say, in essence, “I’m just going to have to make do with what I can provide for my children. Nothing’s going to be coming from the other parent”.
Lord Bradley: That is very helpful. Michelle, do you want to add to that?
Michelle Counley: It is certainly a fundamental part of any system that there needs to be an enforcement scheme in place that has to be robust and effective, which this simply is not. In the last statistics, something like 140,000 cases that were on collect and pay paid no maintenance at all, yet fewer than 20,000 different enforcement measures were put in place. Our experience is that the enforcement is inconsistent and varied. Some caseworkers will act really quickly; others have little interest. The receiving parent might provide lots of evidence about money that the paying parent has in their bank accounts or that they have come into some money, and the receiving parent may want the CMS to act quickly to secure that maintenance, but the actions are just not timely enough to be able to make that a positive outcome for receiving parents.
There are, thankfully, quite a minimal amount of what we consider hardcore non-payers. They are not paying and are going to work whatever system they can to keep under the radar. All sorts of threats of enforcement and letters are just not going to be a deterrent. However, the lack of enforcement is not all down entirely to irresponsible, non-paying paying parents. A lot of issues are happening behind the scenes that prevent that enforcement from taking place, which brings me back to the communication point.
If a paying parent has a reason to dispute or cannot understand a calculation or how a decision is being made, and is just being met with a barrier of evasive responses that do not respond to the specific questions and concerns that have been raised, ultimately, that will become a process—a dispute that moves into the mandatory reconsideration process and then, potentially, on to appeal. The whole thing becomes locked up for several years. Whereas, if there were more resources around the training of officers to communicate more effectively with the paying parent, those disputes should be resolved much more quickly, which will then lessen the disruption of maintenance to the children. However, I agree with the principle that the responsibility of collecting debt rests with the Government, who should absolutely be thinking about how they fund that child in the meantime, during those non-payment periods.
Q47 Baroness Wyld: I want to ask for a bit more detail about timescales. Naomi, you already used the word “slow” and Michelle, you used “inconsistent”. I realise that this is a big question, but I wonder whether you might talk us in more detail through the sort of timescales that we are looking at for enforcement action and engagement through the courts. You will be aware that the Government are committed to bring forward legislation—I think by the end of 2025, but we will see—to make sure that the CMS can take some enforcement action without getting liability orders. What is your view on that?
Naomi Wiseman: I am going to look at some notes here, because this is quite technical. Regarding enforcement, what has to happen first, as Michelle was saying, is that you have a complaint. When I was talking about the receiving parent not having agency, it is that the money does not land in your account; what do you do about that? You cannot take any enforcement action yourself; you have to make the complaint to the CMS. As I understand it, because it is discretionary, you cannot put a timescale on how long that complaint process might take. The difficulty is that, before you even get to a situation where you are in court or issuing that sort of enforcement action—Michelle will know better than me— anecdotally, it can take over a year to get through that complaints process, which you have to exhaust before you can look at getting deduction from earnings or those sorts of orders.
I am here to try to give you the family justice system’s take on this. If you were a mother receiving what we call global maintenance payments, which are for yourself and your child, there would have been an order put in place at the end of a marriage. Your entitlement to that derives from the fact that you have been married. You can get a carer’s allowance as well, under Schedule 1. You could immediately apply for enforcement of that. You would have the issue fee of that application and it may take several weeks, potentially a couple of months, but you will get that in front of a judge. That is a real contrast, because you take away that agency from the receiving parent via the CMS process and you give them no strict timetable, such as, “We will determine this complaint within 24 days, and if not, you can judicially review us”. But no one is going to judicially review, because the cost consequence of that for someone who does not have legal advice is not a proportionate remedy and is a real issue.
Once you get to the deduction from earnings orders and the deduction from bank accounts—the liability orders you are talking about—you are largely in the court process in terms of how quickly those orders can be made and then enforced. But the period before that is the real issue.
On the changes that you are talking about, Michelle would probably agree that anything that can speed up this incredibly long, drawn-out process is to be welcomed. If the CMS were able to make those sorts of enforcement moves without any delay in going to court, it is obviously a good thing. My view is that that is not the point at which the significant delays are happening.
Baroness Wyld: That is very helpful. It takes up a huge proportion of a child’s life. Michelle, did you want to come in?
Michelle Counley: As Naomi said, this is very much a discretionary, inconsistent process and we receive varied experiences. Some caseworkers will act quite swiftly but, ultimately, it comes down to the process needing to be better managed within the CMS scheme, the dispute resolution process and the changes of circumstances, because there are lengthy delays in simply recalculating a change of circumstance—even more so if that has to go to appeal before it is finally concluded. All those delays have to be resolved before any form of enforcement can take place. As Naomi said, the delay is not so much once you are in the court process but what is happening before we get to that stage.
I fully understand and support the move to have anything that will speed up the court process once we are there. But the power for CMS to do that at this stage worries me—I have to be honest—because we then find that the CMS is judge, jury and executioner. Often that court hearing is the first time when the paying parent can actually feel like someone has listened to their complaint. Removing that external body that can help put the brakes on what is otherwise an uncontrollable spiral downwards is a concern. We need to make sure that the enforcement is more robust, more effective and quicker. But we cannot secure that until the communications, complaints and training to resolve disputes are better managed.
Q48 Baroness Wyld: Michelle, earlier you said that the process was inconsistent as far as you could see. Are there examples where you think it has been done well? Have you come across cases where you have thought, “They have done a really good job there”? What is causing the inconsistency?
Michelle Counley: It is difficult to say because people are coming to us because they have a problem. We encounter cases where perhaps an appeal has taken place and the revisions have then been put into effect, and the CMS then very quickly instigates a liability order and quickly moves on to a charging order. But in our experience those are few and far between. More often, we see very slow returns on instigating enforcement action.
Baroness Wyld: Naomi, you came straight to the complaints procedure and said that that is where the delay is. Do you think it is dependent on individuals? It sounds like you think this is systemic, but do you see any examples of it being done well by good caseworkers?
Naomi Wiseman: Our involvement at that stage is really limited. We are talking about advocating within court proceedings, so Michelle is much better placed to answer that. But, frankly, it would not surprise me if you have caseworkers who are perhaps much more efficient and able to deal with things more efficiently.
Q49 Lord Mott: What are some of the reasons for non-payment? Is it people just trying to delay the process, so they do not pay and it then takes six, 12 or 18 months? Or are there genuine reasons, in your experience, as to why people are not paying?
Naomi Wiseman: What is so hard is that we are trying to put people’s very messy personal lives within an algorithm. It would be wonderful if everyone had an income each month that was dependable and the same and they kept the same job. It is a huge issue that the CMS does not get this real-time income data, for example. That is one of the legislative changes the FLBA would put forward for consideration.
For example, if it is assessed that you should pay a certain amount based on a job that you lost 12 months ago or that you were made redundant from, there is no system in place for you to very quickly get redress for that and say “I’m not trying not to pay, but my circumstances have changed” or something as simple as “I’ve had another baby with another partner and therefore I’ve got a different burden on my income”—or “My ex has got remarried and her new husband earns far more than I do. Why am I still having to do this?”
You have to break it down. That is what it really comes down to. It is incredibly difficult to put an algorithm on to people’s lives that has very limited capacity to take into account that, month by month and year by year, people’s lives change and move on, and it has to be dynamic to work with that in order for it to seem fair. If you are happy to have a system that says, “We have to have a blunt figure. We have to draw the line somewhere”, that is fine, but then you are more likely to get non-payment based on a sense of unfairness.
Again, Michelle is possibly in a stronger position than I am to comment on this, but I do not think it is helpful to consider that non-payment is largely from feckless fathers who do not care about their children. That is quite a small proportion and it is possibly a bit of a dog whistle. It is easy to say that debt burdens are not being paid just because of fathers who do not want anything to do with their children. It is much more complicated than that.
Michelle Counley: It is very dependent on circumstances. We have to look at the whole affordability issue when paying parents on low incomes are genuinely struggling to make the payments for their regular maintenance and the response for not doing so is the penalty of an extra 20% levy on top. That is particularly gruesome when that parent might have good equal shared care of the child and have costs while the child is with them, as well as having to pay out child maintenance in addition. There is certainly a question mark about affordability and the response to that being an extra 20%, which just seems bizarre.
As I mentioned earlier, there is also the whole issue of change in circumstances and the delays around that. One of the difficulties is that the CMS will not allow smaller payments. So, while somebody might be waiting for a change of income or change of circumstances recalculation to be done, if they pay a different amount to what the last assessment was, there is a big risk that that will be disregarded. It is actually a safer position for the paying parent not to pay anything rather than pay something different from the last assessed amount.
I have another example of a case we encountered recently where the paying parent had advised the CMS that he had dividends in addition to his income. The CMS told him it could not take those into account. Four years later, it decided it could and backdated that decision by four years. He now has in excess of £50,000 worth of debt. During those four years, the paying parent made additional payments to the amount that was assessed, but the system will not allow those voluntary payments to be considered. There is this huge cavern of unfairness because the legislation has no flexibility to accommodate these sorts of situations. We could sit here all day discussing examples of where those sorts of nuances affect the fairness, which immediately makes people want to shut down and not pay.
The Chair: Just so we have got it right, because that seems so unbelievable, you are saying that, when the CMS is recalculating, if the paying parent pays X, once the calculation is made, it will pretend you did not pay X? It will not minus X from the amount?
Naomi Wiseman: Yes.
Michelle Counley: Because he paid in addition to what the assessment was at the outset, the CMS will take that as gifts. It will not take them as voluntary payments, even though it was its error and the backdating of the error created the debt. It will not take responsibility for those additional payments. Anything that is either below or above that pay schedule is at risk of being taken into account as a child maintenance payment.
The Chair: Michelle, you said once or twice that, if the staff were trained more effectively, the system would work better. I appreciate that even in a poor system it would help if staff were trained but, on the whole, do you think the problems could be solved by better staff training? Is the system beyond that working effectively for those it is meant to be supporting? What is the balance in your mind as to whether it is saveable?
Michelle Counley: No, I think that fundamentally there needs to be some significant changes in the system that we have—
The Chair: You cannot train your way out of it.
Michelle Counley: Yes. Whatever system is in place, it must have fairness at its root in terms of what is right for the child, having both parents working together for the needs of the child, the communication and the mediation. As Naomi described, in the court process you have the stage where the parents can almost put their side before an independent judge, but a mediation environment where everybody is adding into the system is absolutely where any new system needs to head towards.
Q50 Lord Carter of Coles: I am reeling from the word “gruesome”, which describes it really well, and nowhere more effectively than in this question of appeals. You would hope that the appeals system could be prompt and would deal with these things and clear them quickly. I know that they are complex, but it is pretty clear that it is a major source of disappointment at a key moment. What do you think of the accessibility and effectiveness of the whole process?
Naomi Wiseman: If we take a step back, the ultimate aim of the system should be that the appeals process is there as an absolute last resort. You ought to have a system where you are not really making mistakes as a matter of fact or law. It all feeds into this issue of how you could bolster the system earlier, so that you do not end up in a position where your access to an appeal or the efficiency of the appeal system is such an issue. It slightly segues to the idea that you could give the caseworkers or the process more information up front—an example that we were suggesting is a legislative change with an amendment to Section 14 of the Child Support Act that would give the CMS access to real-time income data. It is what they have in Australia. Already you can make decisions based on your real-time tax information, rather than what is being reported to you with that huge time lag.
Are you likely to strike out lots of appeals or, in effect, stop appeals before they have to happen? Yes, that is exactly the sort of system change that would send fewer people towards the appeals process.
There are also aspects that you can borrow from something that they have within financial orders, whereby you have an annual updating disclosure. Again, rather than placing the onus on the paying parent to say, “My circumstances have changed”, if you have that ongoing financial disclosure, even if you have an algorithm-based calculation, you are feeding in accurate information each year and perhaps you will get an update each year as to what the amount should be. Again, you will see off appeals against decisions by doing that.
The actual appeals process itself is not unlike any appeals process: you are able to challenge that decision as a non-resident parent. At least you give agency to the non-resident parent. They are the ones who bring that appeal; they are not dependent on anyone else in the agency to do it. However, there is a nebulous pre-process to the appeal, which is not dissimilar to the issues we talked about with the complaints process, because you have to request a revision of the decision and then go through something called mandatory reconsideration. That is supposed to take place within 30 days of the receipt of the written notice of decision, but you cannot request an appeal until that has happened. Then you go to the First-tier Tribunal, so there is already quite a burdensome administrative process even to get yourself to the First-tier Tribunal.
Once you are at that tribunal, are you equipped to make those arguments as a lay person? No, you are not, because you are talking about a legal principle of whether you can challenge the decision in law or fact. Not many people would be capable of putting their case without some form of assistance. So, is the process set up for the people it is designed to help? No, because they should not have to get to the stage of appeal. These are not complex decisions in the sense of, “Are you likely to have made an error of law in calculating what the child maintenance payment should be?”
Lord Carter of Coles: Do you have any sense of the abandonment rate then? We often get evidence that suggests that people give up. Do we know how many people give up?
Naomi Wiseman: I am going to hand to Michelle, because I do not have any of that data, but it would be interesting to see, if people accept the First-tier Tribunal decision, for example, how many try to appeal to the Upper Tribunal. I would imagine that it is not that many.
Michelle Counley: We do not collect statistics on that situation, to be fair. My experience is that, fundamentally, you have to be prepared. If we go right back to the beginning, as Naomi mentioned, you have to ask for either your supersession or revision. You then have to go through the mandatory reconsideration process, which can take several weeks to conclude. You might never actually get a mandatory reconsideration notice, which is fundamentally the document that you have to have before you can go to appeal. That is particularly so with financial investigation unit decisions, where financial investigators have completed their investigation but, when the non-resident parent receives their letter, it is literally a figure on a piece of paper: there is no explanation or methodology around how that figure is arrived at, and it is up to the paying parent then to take that matter to appeal. They put the mandatory reconsideration request in but the CMS refuses that because it says, “We cannot deal with that because it is FIU”. However, you still need to do the mandatory reconsideration. So you have all these hurdles to overcome before you even get the document to then take you to appeal.
Another common obstacle is that the mandatory reconsideration request is automatically applied against the last decision on the system, and that might not be the decision that needed to be appealed. It might not be the disputed decision. Often, somebody might have a range of different letters issued either on the same day or within a few days of one another. They appeal, raise the mandatory reconsideration and go on to make their appeal, believing that they are appealing a decision that they are disputing but, actually, it is six, eight or 10 months before they realise that they appealed the wrong decision.
There are lots of hurdles before we get to the tribunal process, but what is fundamentally wrong here is that the First-tier Tribunal process is probably the first time when someone has some reasonable and rational answers behind the decision that, until this point, was made out of nowhere. The tribunal process should be the last resort and should be used for those real, finer, complex cases that fall on a technical point of law. Often it is just simply because of ineffective, poor decision-making from the CMS.
I am going to again raise another example. I had a client who had left quite a significantly well-paid job through ill health, but had a long period of payment in lieu of notice. The CMS had put him on a nil assessment because he had left his job but, actually, the period of payment in lieu of notice should have meant that his assessment stayed on maximum income for six months. We were telling the CMS and the paying parent was telling the CMS. We even managed to contact the receiving parent and have her tell the CMS that they should be on maximum income. It took 18 months to put the matter to a tribunal process and 24 minutes to decide that it should have been maximum income throughout. So all these people were caught in the system but absolutely did not need to be. It did not need to occur because the evidence was there and the CMS simply chose to ignore it.
Lord Carter of Coles: Just on that, we are trying to separate process from people in this. Is this a process failure or is it the people not running the process properly?
Michelle Counley: A lot of it is to do with the people not running the process properly. The process is there, they have the mandatory reconsideration notice and file the application to appeal, but the communication and guidance is not there. Receiving parents are not told about the variations or steered for the variations scheme. The process is there, but communication to parents is so poor that you get poor decision-making, poor communication and parents left to fathom it out themselves.
Q51 The Chair: Michelle, could you say a bit about caseworkers? In our previous hearings, we have seen that some people—the difficult cases—get their own caseworker, so that they have somebody who could talk things through. So should the cases that you described as long and complex not have had caseworkers or are there just not many people who get a caseworker?
Michelle Counley: It is my understanding that you get a single caseworker if there is domestic violence or a domestic abuse case, and there are still difficulties around that. You are probably all aware of Rachel Parkin, who made representations to the House of Commons about her case. She had been consistently promised about a single caseworker, but she was continually fed back to a multitude of caseworkers. You have to repeat the same processes over and over again. In our experience, at least, you do not get a single caseworker.
Q52 The Chair: That has been incredibly informative. The system is complicated but my understanding has increased tremendously in the last hour. You have both been very helpful throughout our conversations because you often said that you would recommend this and the other, so we already have a list, but I want to ask the last question. At the end of the day, we have to put recommendations to the Government. What would be your top two recommendations that would be useful for us to consider including in the report?
Michelle Counley: My two top two things would certainly be to have a system that encourages better communication and mediation, in which both parents are involved in the conversation around child maintenance aspects, and the system has a robust and effective complaints process.
Naomi Wiseman: I recommend borrowing from other jurisdictions; there is nothing better than seeing something that works in a different jurisdiction. I have already mentioned a couple of things, but the Government should be looking at the idea of guaranteed maintenance. However much we talk about the system and the process, surely we are really talking about limiting, as much as possible, any period of time when a child is not receiving the money that they need and that the Government say they need. That is such an important thing to bear in mind.
We also have to look at an advisory body that perhaps sits within the CMS so that you are empowering parents from the outset. That is not necessarily going to be easy to resource; you could also come up against the same issues about staff training. But when you look at providing that kind of rights-based information to parents, so that they understand what is going on and what they can apply for, that will enhance that sense of procedural fairness. What I talked about, in terms of enhancing disclosure and the information that the CMS can have access to, can all be part of the same thing. It will take some legislative change, but it is not huge. You do not want things to get to court. We would always say, particularly when you work within that system, that if it has got to court something has gone badly wrong.
The Chair: Thank you, both. We will finish our formal session there but thank you for your time and expertise. It has been incredibly helpful. Thank you for your openness and for answering our questions.
