Duncan Lewis

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The charges being collected by the new body replacing the Child Support Agency, from the parents is going to worsen child poverty says a report

Date: (18 May 2012)    |    

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The new body which is replacing the existing Child Support Agency is charging 12% of any maintenance that a single parent gets which has been criticised as filling its black hole in its budget.
In fact the plans to charge the single parent mostly women to get access to the replacement agency could worsen child poverty the MPs have warned. The ministers said that half of all children in the UK from separated families were already being brought up in poverty.
Almost half of parents received less than £20 a week are being deducted at the rate of £2.40 to pay for the service, which is good source of cash for the commission but it is being collected from poor households. The charging scheme also penalised women, as nearly all those who contact authorities were mothers chasing fathers to pay for their child's care.
Margaret Hodge, chair of the committee, said it was important that the parents with responsibilities for care received the full child maintenance owed to them to support their children.
She said that it was concerning that the commission's cost reduction plans seem to rely heavily on charging parents to use its services. The commission must ensure that the introduction of fees did not end up making child poverty worse.
The report on Friday also noted that the cash raised by fees meant that the commission's savings target of £151m by 2014 was reduced to £117m, which diluted governments’ argument that the only reason to charge people was to dissuade them from using the system and encourage them to opt for voluntary agreements.
Figures produced by the National Audit Office earlier this year showed that by 2021, the charging regime would be producing £167m in revenue for the commission, money that would unreasonably come from the poor.
The commission would also effectively write off billions of unpaid support. Absent parents now owe £3.7bn in child maintenance but the agency in charge of securing payments only believes it can collect £1bn of that. MPs claimed it "beggar’s belief" that so much money was being written off and said parents were frustrated for not being paid the right amount of money or any at all.
Hodge also pointed out that a new IT system being introduced by the commission to try to save money was already delayed.
Meeting the current timetable, the critical testing was needed to be done at the same time as the system was being delivered, which had been the reason for failure in the case of many previous government IT projects. Every month of delay would cost the commission £3m, money it can ill afford to waste.
Charities were very critical of the new charging structure. Gingerbread's chief executive, Fiona Weir, said it was not right that heavy reliance was being placed by the commission on charging parents to use the future child maintenance service in order to meet their own costs targets.
A Department for Work and Pensions spokesman thanked the committee for its report and said they would carefully consider its contents before responding fully in due course. Child maintenance presents serious challenges which have tested successive administrations.
The government's fresh approach was to encourage and support parents to make their own maintenance arrangements whenever possible, benefiting children, parents and the taxpayer.