Heidi Allen and her 10 minute Bill – An analysis

At the Voice of the Child we have been clear regarding how dissatisfied we are with the UK’s current system of Child Maintenance.

The current legislation is poorly drafted, badly implemented and continues to cause problems up and down the Country for the children involved and their parents. There are many in the establishment who are very well aware of the problems but there seems to be no political advantage for these MPs to engage in pushing for real and proper reform.

We believe that wholesale reform is urgently needed but  MP’s in Westminster continue to propose and support Bills to worsen the situation rather than have the courage to admit that the system is deeply flawed.

We witnessed another mistake being made again yesterday by the MP for South Cambridgeshire, Heidi Allen.

Interestingly, Heidi seems confused as to whether this is a Bill designed to benefit children or to “save the taxpayer money” so please bear those 2 things in mind as you read her words.

The Work and Pensions Select Committee

The Work and Pensions Select Committee (on which Ms. Allen is a member) opened the day with the following Tweet:

Firstly, we have a concern that a Parliamentary Select Committee would think it appropriate to refer to anyone as “deadbeat parents” or, indeed to support a Private Bill in such a way and we would urge you to write to the Committee members or your MP to complain about the terminology being used by the Select Committee.

Parents, both Receiving and Paying, have had a shocking experience at the hands of the CMS and the DWP, and there is more than enough mud-slinging and name-calling going on without a Select Committee lowering itself to the same level.

Parents expect Select Committees to investigate the facts and to make unbiased and unpartisan recommendations, not further fuel the fights and arguments between parents already stressed and frustrated with each other as a result of government incompetence.

Heidi Allen, the proposer of the Bill

Ms Allen  presented a 10 minute Private Members Bill that was riddled with untruths and misrepresentations. We will leave it to readers to decided whether this was intentional but what it did serve to do was to make the current “situation” appear to be in need of change in the manner in which the Bill suggests. We do not agree that such change was appropriate “in isolation” (or perhaps even at all).

We have previously written articles about Heidi Allen and her (in our opinion) misguided agenda.  You can read them by clicking on the links below:

CMS – Repeating the mistakes of the past, ten minutes at a time

Spotlight on Heidi Allen MP

You can also read more about her actions in the Work and Pensions Select Committee in the following pieces:

Rearranging the deckchairs on the Titanic – Analysis of a Select Committee

Child Maintenance Service: Government Response to the Work and Pensions Committee Fourteenth Report of Session 2016–17

Heidi Allen’s 10 minutes in the spotlight

So, now turning our attention to her 10 minutes let’s take a look at the content; we will then dissect the content point by point.

This is what Heidi said:

Child Maintenance (Assessment of Parents’ Income) Bill 2017-19

I beg to move,

That leave be given to bring in a Bill to equalise the assessment and enforcement of child maintenance arrangements of children of self-employed parents with those of children of other employed parents; and for connected purposes.

In introducing the Bill, I am following in the steps of David Burrowes, who, until the recent general election, was the Member of Parliament for Enfield Southgate. Let me explain the Bill’s purpose in plain language.

One of the greatest privileges in my role as a Member of Parliament has been meeting and getting to know four brave mums in my constituency. I call Melissa, Sue, Kate and Jo-Anne my super-mums. As well as being fabulous women and wonderful mothers, they all have one thing in common: having split up from the fathers of their children, they have all had to fight, and are still fighting, for fair maintenance payments. The aim of the Bill is to ensure that the parents and children who find it hardest to be awarded a fair child maintenance arrangement are better supported by a system with proper teeth. Whether paying parents have complex finances, are hiding their true incomes to avoid tax or are simply determined not to pay maintenance, this Bill is for them.

When parents split up, the Child Maintenance Service can help them to work out a fair payment schedule for their children. When the split is amicable and sensible, the system works well, but if paying parents want to avoid paying, they can do so all too easily—and all too often—by hiding behind self-employed status. By hiding their income, they are not only denying their children the financial support that they deserve, but defrauding Her Majesty’s Revenue and Customs, and, in many cases, forcing the parents with care on to benefits. That is a double hit to the taxpayer. The country loses out on tax, and instead pays out to support the receiving parents. The purpose of the Bill is to ensure that the statutory child maintenance system works for as many families as possible by closing that loophole.

The Child Maintenance Service, which was introduced recently by the Department for Work and Pensions, replaced the old Child Support Agency. In straightforward cases involving a traditionally employed paying parent, it works well. A standard child maintenance calculation under the CMS is based on HMRC’s “gross taxable income” data. That usually means gross earnings from employment or self-employment, with pension contributions deducted. However, the system does not work when the paying parent takes income in other ways—unearned income from, for instance, trusts, dividends, rental income, individual savings accounts, assets, or capital gains from property sales: essentially, any income that does not show up on HMRC records.

I suspect that you are starting to get my drift, Mr Speaker. If it is not shown on HMRC’s records, it is not seen by the CMS. The current system does not work if paying parents are evading tax and not declaring their income to HMRC. In such cases, the amount of child maintenance that the CMS deems a paying parent to owe may be negligible. Receiving parents may be struggling to make ends meet while seeing their exes buy new cars, take holidays, and lead luxurious lives with new families. The mum who brought the issue to David Burrowes’s attention was Elizabeth Green. In her case, her ex had organised his finances in such a way as to pay the minimum statutory sum—just £7 a week—but was found to be a multimillionaire and the owner of multiple properties. My super-mums have had similar experiences.

The old CSA system had a component entitled “lifestyle incompatible with earnings”, which allowed the CSA to challenge income if there was evidence of a more comfortable lifestyle than the declared income suggested. I do not understand why, but that feature has been removed in the new CMS system. The right hon. Member for Birkenhead (Frank Field), who is one of the Members who have kindly added their names to my Bill, told me recently about a constituent whose application for tax credits had been called into question by HMRC because it believed that her standard of living was too high for her to qualify. That ably demonstrates that HMRC has the capability to question income and allege fraud. It must therefore be able to extend that power to ensure that appropriate child support payments are made.

This simply cannot be right. I do not seek to demonise the self-employed or the wealthy—most parents living apart from their children do pay what they owe—but as the Government rightly turn their attention to the growth in self-employment and the new challenges that that brings in terms of systems, law and taxation, and as they also crack down on tax evasion, now is surely the time for the Child Maintenance Service’s rules of engagement and enforcement powers to change.

The Work and Pensions Committee, of which I am a member, has already looked into this issue. Much of what we found highlighted the challenges associated with the growth of self-employment and the potential that it creates to hide true earnings. As child maintenance evasion often goes hand in hand with tax evasion, it seems inefficient and ineffective not to combine forces with HMRC in a proactive way. The Government must surely consider that—especially given that the CMS’s financial investigations unit has so far conducted only four investigations, just two of which have resulted in action.

This is not a difficult concept to grasp. Parents can see with their own eyes when their exes are living beyond their declared income or assets. For example, a constituent of mine paid just a few pounds to access a public search facility at Companies House which showed as clear as day that the father had drastically under-declared his income through creative company and dividend manoeuvring.

We must act on this exploitable flaw in the system, or instead allow parents to take their cases to the family courts. My super-mums have all trodden that path, only to find that the CMS is not obliged to uphold the courts’ judgments. I know that the Government are serious about tax evasion, so the current loophole in the CMS process makes absolutely no sense. The CMS must either join up with HMRC, or let the courts do their job: it must be one or the other.

In response to our Committee, the Government have said that they will consider how they can include all sources of income in the CMS calculation. That sounds encouraging, but, in the absence of the promised new arrears and compliance strategy, the Bill can be the vehicle to effect the changes that are so desperately needed by introducing measures to help struggling parents and children to secure the maintenance that they deserve. Child maintenance lifts a fifth of single parents on the lowest incomes out of poverty. It provides a lifeline for parents and children, whether that means putting a roof over their heads, covering childcare costs, or enabling children to take part in school trips. It also saves taxpayers’ money.

A child maintenance system with teeth will also offer protection to parents and children when there has been a history of abuse and control. Some cases are high-conflict, involving parents who are determined to avoid their liabilities. That can be a means of continuing to exert control, just as they used to when the parents were still together. Coercion, domestic abuse and ongoing manipulation are the backdrop for the most vulnerable parents who turn to the CMS, and in those cases the state must step in. The fixes are obvious, and dovetail comfortably with the Government’s determination to crack down on tax evasion while also getting a handle on our rapidly growing self-employed economy.

I urge Members to allow the Bill to be read a second time.

 

Before we get into looking at what Heidi said this time, let’s look at Heidi’s voting record:

Heidi Allen Vote Record on Welfare Benefits

Date of VoteHow Heidi Voted
4th June 2015Heidi Allen voted in favour of proposed spending cuts and changes to the welfare system and in favour of spending on new nuclear weapons.
20 July 2015Heidi Allen voted to reduce the household benefit cap, to freeze the rate of many working-age benefits, to reduce social rents in England and for other changes to the benefits system.
20 July 2015Heidi Allen voted to reduce the household benefit cap, to freeze the rate of many working-age benefits, to reduce social rents in England and for other changes to the benefits system.
15 September 2015Heidi Allen voted to reduce the amounts people are paid in tax credits.
20 October 2015Heidi Allen voted in favour of an impending reduction in the amount people are paid in tax credits.
27 October 2015Heidi Allen voted in favour of reducing the amount people are paid in tax credits.
27 October 2015Heidi Allen was absent for a vote on Welfare Reform and Work Bill — Clause 13 — Employment and Support Allowance: Work-Related Activity Component
27 October 2015Heidi Allen was absent for a vote on Welfare Reform and Work Bill — Clause 14 — Universal Credit: Limited Capability for Work Element
27 October 2015Heidi Allen voted to reduce the household benefit cap, to freeze the rate of many working-age benefits, to reduce social rents in England and for other changes to the benefits system.
18 November 2015Heidi Allen voted for proposed cuts to tax credits and against investment aimed at growing a productive economy focused on science, technology and green jobs.
6 January 2016Heidi Allen voted in favour of cutting universal credit benefits for many people in paid work
23 February 2016Heidi Allen was absent for a vote on Welfare Reform and Work Bill — Clause 13 — Employment and Support Allowance: Work-Related Activity Component
23 February 2016Heidi Allen was absent for a vote on Welfare Reform and Work Bill — Clause 14 — Universal Credit: Limited Capability for Work Element
2 March 2016Heidi Allen voted to make the removal of the work-related activity component from employment and support allowance conditional on an impact assessment and to require Parliament to approve details of implementing the change.
2 March 2016Heidi Allen voted to make the removal of the limited capability for work element of universal credit conditional on an impact assessment and to require Parliament to approve details of implementing the change.
26 May 2016Heidi Allen voted in favour of repealing the Human Rights Act 1998; against plans to save the steel industry including fast-tracking infrastructure projects requiring large amounts of steel; and against a principle of the Government not borrowing to fund day-to-day spending.
8 June 2016Heidi Allen voted for reductions in benefits for disabled and ill claimants who are deemed capable of work.
20 July 2016Heidi Allen voted for cuts in housing benefit for recipients in supported housing.
20 July 2016Heidi Allen voted for reducing public borrowing and for capping welfare spending.
16 November 2016Heidi Allen was absent for a vote on Universal Credit and Employment and Support Allowance — Analysis of Impact of Changes on Those with Different Incomes

Heidi Allen Voting Record on Corporation Tax

Date of VoteHow Heidi Voted
14 July 2015Heidi Allen voted in favour of the Summer 2015 budget which, among other measures, increased the minimum wage, replaced student maintenance grants with loans and cut tax credits.
21 July 2015Heidi Allen voted for the measures in the Finance Bill including an increase in the income tax personal allowance, and to cap the rates of VAT and income tax at their existing rates until the next general election.
21 July 2015Heidi Allen voted for the measures in the Finance Bill including an increase in the income tax personal allowance, and to cap the rates of VAT and income tax at their existing rates until the next general election.
26 October 2015Heidi Allen voted for the measures in the Finance Bill including an increase in the income tax personal allowance, and to cap the rates of VAT and income tax at their existing rates until the next general election.
22 March 2016Heidi Allen voted to approve the March 2016 budget which contained plans to spend £56bn more than was expected to be taken in, introduced a policy of requiring all schools to become academies and introduced a new soft drinks levy.
11 April 2016Heidi Allen voted to increase the personal income tax allowance, change the way dividends are taxed, cut capital gains tax and reduce the amount which can be taken out of a pension tax-free from £1.25m to £1m.
28 June 2016Heidi Allen voted to reduce the main rate of corporation tax for the financial year 2020 from 18% to 17%.
5 September 2106Heidi Allen voted to reduce the main rate of corporation tax to be charged in 2020.
6 September 2016Heidi Allen voted to increase the personal income tax allowance, change the way dividends are taxed, cut capital gains tax and reduce the amount which can be taken out of a pension tax-free from £1.25m to £1m.

Heidi Allen Vote Record on Tax Avoidance

Date of VoteHow Heidi Voted
13 April 2016Heidi Allen voted against implementing a series of proposals intended to reduce tax avoidance and evasion.
19 April 2016Heidi Allen voted against giving the Financial Conduct Authority and Prudential Regulation Authority duties to combat abusive tax avoidance arrangements, including by ascertaining and recording the beneficial ownership of trusts.
28 June 2016Heidi Allen voted against requiring multinational enterprises to publish a country by country tax strategy including information on their attitude to tax planning.

Interesting isn’t it…?

For someone saying that want fairness and help and support for low income parents Heidi’s voting record tells a completely different story…

Let’s take a look at the facts behind what Heidi Allen said

Apologies if this gets a little dry; however,  it’s vitally important that before support is given to proposed changes in law that we all ensure that the true facts are recognised and that decisions on whether a Bill should be supported are made on a factual basis, not a partisan approach, or one based on spin and whim.

We will take the text from Heidi’s speech and then point you to the facts (where what she represented was not accurate; or, where it was)

Heidi said it was a

Bill to equalise the assessment and enforcement of child maintenance arrangements of children of self-employed parents with those of children of other employed parents; and for connected purposes.

Firstly, we would dispute that such a Bill is necessary in the first instance. The current variation regime already permits the CMS to vary the amount of maintenance for unearned income or in the case of what it terms  “diversion of income“.

Thus, the CMS already has a mechanism to capture income not taken into account under the basic formula.

Heidi then went on to say

One of the greatest privileges in my role as a Member of Parliament has been meeting and getting to know four brave mums in my constituency.

I call Melissa, Sue, Kate and Jo-Anne my super-mums. As well as being fabulous women and wonderful mothers, they all have one thing in common: having split up from the fathers of their children, they have all had to fight, and are still fighting, for fair maintenance payments.

The aim of the Bill is to ensure that the parents and children who find it hardest to be awarded a fair child maintenance arrangement are better supported by a system with proper teeth. Whether paying parents have complex finances, are hiding their true incomes to avoid tax or are simply determined not to pay maintenance, this Bill is for them.

Heidi’s “super-mums” deserve a whole piece themselves so we will not dwell on them here except to say that we have serious reservations about legislative changes just because Ms Allen has been able to identify 4 people who have had alleged issues with their ex partners. Heidi makes no mention of whether these “supermums” made any contribution to the dysfunction of the relationship themselves (we will come back to that in another piece in the future).

In addition, by using the example of 4 woman Heidi is setting the scene that the non payment of Child Maintenance is somehow a “father problem”.

It isn’t.

Plenty of Resident Parents who contact us about issues with the CMS are fathers. Plenty of Non-Resident Parents who contact us about being held over a barrel and harassed by the CMS are mothers. It’s not a “fathers” or “deadbeat parent” thing.

The language Heidi has used here is also very interesting. She talks of child maintenance being “awarded” like it’s some sort of prize. She also uses the word “fair” but doesn’t say what “fair” is. The parents who contact us have a firm idea of what “fair” is and it doesn’t seem to us to be the same definition as the one that Heidi is alluding to.

Tax evasion and complex finances

Heidi then goes on to throw parents with “complex finances” (nothing illegal or immoral about that as she herself well knows) in with tax evasion (which is already illegal). This is a sneaky slight of hand and she should really know better. This is Heidi’s first misrepresentation.

Proper Teeth

She talks about a system with “proper teeth”. The Child Maintenance Service arguably already has all the teeth it needs in order to accomplish the collection of “correctly” (and incorrectly) calculated maintenance. These include the powers to do the following:

  • Deduct money directly from bank accounts (lump sum and regular deduction orders). The DWP is now looking at removing money from joint bank accounts.
  • Remove Driving Licences (they have done this 3 times in the past 3 years). Remove passports.
  • Instruct employers to deduct money directly from wages at source.
  • Instruct balliffs
  • Committal to prison

It’s worth noting that much of the above can be done with very little oversight and we would argue that far from giving the Child Maintenance Service more powers they should be compelled to use the existing powers in a more responsible way.

It’s not clear what further “teeth” Ms Allen would like to give the CMS in order to do their jobs? Perhaps a fresh set of “Positive Pants” would do the trick?

Back to tax evasion with added benefit issues

Heidi then goes on to say

When parents split up, the Child Maintenance Service can help them to work out a fair payment schedule for their children. When the split is amicable and sensible, the system works well, but if paying parents want to avoid paying, they can do so all too easily—and all too often—by hiding behind self-employed status. By hiding their income, they are not only denying their children the financial support that they deserve, but defrauding Her Majesty’s Revenue and Customs, and, in many cases, forcing the parents with care on to benefits.

That is a double hit to the taxpayer. The country loses out on tax, and instead pays out to support the receiving parents. The purpose of the Bill is to ensure that the statutory child maintenance system works for as many families as possible by closing that loophole.

Again she is talking about “fair” payments and implying that the Government will “help” separated families. The statutory Child Maintenance system is based on gross income of the payer, there is very limited flexibility in it and it does not take into account the outgoings of the paying parent nor the income or other benefits received by the receiving parent. It is a blunt instrument that is not fit for purpose. The statutory scheme also does not consider any non-monetary contribution and in fact rewards a perverse reward to a receiving parent for reducing the amount of contact that the paying parent has with the children. That, in our opinion is a much bigger scandal.

Benefits, Universal Credit, and Austerity

Heidi then goes on to make her second misrepresentation when she says that the self employed are somehow defrauding HMRC and “forcing the parent with care on to benefits”.  She then makes a misleading plea to other members of her Conservative Party suggesting that by supporting her Bill that they will be assisting with a reduction in the benefit bill for the Exchequer.

This is totally incorrect as receipt or non receipt of Child Maintenance payments has no effect on the quantum of benefits a receiving parent is able to claim from the state. 

Supporting her Bill will not cut the UK’s Benefits bill.

Unearned and diverted income

The next bit of Heidi’s speech went like this

The Child Maintenance Service, which was introduced recently by the Department for Work and Pensions, replaced the old Child Support Agency. In straightforward cases involving a traditionally employed paying parent, it works well. A standard child maintenance calculation under the CMS is based on HMRC’s “gross taxable income” data.

That usually means gross earnings from employment or self-employment, with pension contributions deducted. However, the system does not work when the paying parent takes income in other ways—unearned income from, for instance, trusts, dividends, rental income, individual savings accounts, assets, or capital gains from property sales: essentially, any income that does not show up on HMRC records.

Ironically, Heidi mentions the previous iteration of the CMS, the Child Support Agency or “CSA”. The CSA was closed down as a result of a number of issues including incorrect assessments that were based on subjectivity, customer service issues and a mounting arrears balance that became a Government embarrassment.

Unearned income… again…

Heidi then goes on to  talk about a number of other  unearned income sources citing “trusts, dividends, rental income, individual savings accounts, assets, or capital gains from property sales: essentially, any income that does not show up on HMRC records.”

Firstly, dividends and rental income are both covered under the existing legislation covering unearned income variations. Trust income may also be covered depending on whether it is actual income or a loan from the trust. Individual Savings Accounts (ISA’s) would not be taken into account as these vehicles are used to save relatively small amounts of money (on which tax, and child maintenance has already been paid) in a tax free wrapper designed to encourage individual financial responsibility. ISA money is held either in cash or invested in stocks, shares and bonds.

Capital Gains?

Lastly, capital gains are not “income” at all so it is unclear why Heidi has seen fit to mention this in her “definition” of income.

For those who are interested, all income types under Parts 3, 4 and 5 of the Income Tax (Trading and Other Income) Act 2005 can be taken into account by the CMS without any changes to existing legislation or Heidi’s Bill.

I suspect that you are starting to get my drift, Mr Speaker. If it is not shown on HMRC’s records, it is not seen by the CMS. The current system does not work if paying parents are evading tax and not declaring their income to HMRC. In such cases, the amount of child maintenance that the CMS deems a paying parent to owe may be negligible. Receiving parents may be struggling to make ends meet while seeing their exes buy new cars, take holidays, and lead luxurious lives with new families.

The mum who brought the issue to David Burrowes’s attention was Elizabeth Green. In her case, her ex had organised his finances in such a way as to pay the minimum statutory sum—just £7 a week—but was found to be a multimillionaire and the owner of multiple properties. My super-mums have had similar experiences.

Back to tax evasion and the case of Elizabeth Green

Not wanting to point out the obvious but tax evasion is already illegal and covered under extensive legislation without the need for Heidi’s Bill.

Heidi then raises the case of a lady she identifies as “Elizabeth Green” and gives selective and misleading information about her case to suggest that Elizabeth was a mother who was just about managing on £7 per week. No mention is made of any child tax credits, working tax credits (both of which Ms Green claimed) or her income from her part time job (£500 per month).

When you look closer at  what her ex partner had actually given Ms Green, the picture changes further still from  that presented by Heidi. Elizabeth Green is not a woman who has had “nothing” from her ex partner as Heidi would have you believe.

The case of Green vs Adams was widely reported in the press earlier this year. However, far from getting “just £7 per week” it may assist readers in forming a view of whether Ms Greens’ former partner had met his financial responsibilities (willingly or otherwise) if we outline the following regarding Ms Green:

As recently as May this year we are aware that she applied to Court to compel the father of their 16 year old son (“N”) to pay the following:

i) £15,000 to replace her car (the father had offered to give her a choice of 2 second hand cars but she wanted a new one).

ii) £3,000 to cover the cost of a forthcoming trip to Israel by N (because all children “need” a trip to Israel every once in a while).

iii) £1,500, being a 50% contribution, towards the cost of a trip to China last year by him.

iv) £500, being a 50% contribution, towards the cost of a kayak purchased last year for him.

v) £600 for the cost of a new laptop for him.

Elizabeth Green also apparently tried to claim £44,000 reimbursement of rent paid on her behalf by her mother between
October 2009 and May 2012 which she says she owes to her mother (although it seems that this claim was subsequently dropped by her).

It should be noted that according to publicly available information the father had also given the mother a total of £248,000 in 2005 to purchase and furnish a home.

Income should mean more than income (apparently)

Finally, when Heidi says that the father had “organised his finances in such a way as to pay the minimum statutory sum”, a more accurate description would have been “he retired” (he is now 65).

You can read the whole judgement here but we would argue that Ms Green’s circumstances are in no way representative of the general population or those using the CMS who may be genuinely struggling (for whatever reason). Heidi had this to say:

The old CSA system had a component entitled “lifestyle incompatible with earnings”, which allowed the CSA to challenge income if there was evidence of a more comfortable lifestyle than the declared income suggested. I do not understand why, but that feature has been removed in the new CMS system.

We can help you here Heidi: the lifestyle variation was replaced by the other variations of diversion and unearned income as well as the basic calculation now being based on gross income rather than net income (which makes it much less open to manipulation than the 1993 and 2003 schemes administered by the CSA).

The DWP said this recently about the “lifestyle variation”…

We have no plans to reintroduce this provision, which was difficult for parents to use and uncertain in effect. The onus to prove that grounds for a variation existed lay with the applicant, typically the parent with care, and it was often difficult to obtain such details.

As a result, very few applications for ‘lifestyle’ variations resulted in changes to the existing liability. The decisions on these grounds also involved a degree of subjectivity and a large proportion of such decisions were challenged or appealed, delaying the receipt of a steady maintenance amount.

That seems like a pretty damning indictment of the very proposal that Heidi Allen is looking to introduce. This is not a new idea. It has been tried and tested before but was a resounding failure and responsible for the closure of the organisation preceding the CMS (the CSA).

Spousal maintenance

We’re just going to have a little rant now…

It’s worth noting that Heidi, and some of her more vocal supporters on social media, seem to be confused about something. The Child Maintenance Service wasn’t set-up to calculate and collect against spurious claims for spousal maintenance dressed up as child maintenance. Spousal maintenance is spousal maintenance and would have either been settled at court along with the whole disposal and dispersal of assets or dealt with under a private arrangement between the parties. Child Maintenance is separate, and if two grown adults can’t resolve that between them in the form of a family based arrangement then they’re stuck with using the CMS.

When Heidi says:

Receiving parents may be struggling to make ends meet while seeing their exes buy new cars, take holidays, and lead luxurious lives with new families

…she’s trying to tug at those heart strings again. People pay for things in lots of different ways. Most people fund things through credit these days – mortgages, credit cards, loans. Just because someone has a car on finance (or a company car), went to Vegas on holiday, and has a 42″ TV in their lounge it doesn’t for one moment mean that they’re rolling in it – just take a walk through any council estate in the UK and you’ll see for yourself – somehow some of the poorest people in our society can afford these things without being multi-millionaires hiding their ill-gotten gains in the Caymens. We’re not judging people’s choices, we’re merley observing. As can you, and as can Heidi Allen in her own constituency.

You know what the biggest complaint we hear about the unfairness of the system is? it’s not from Receiving Parents – it’s from Paying Parents who say that they are being nailed on huge and inaccurate child maintenance amounts, lumped with thousands of pounds of fictitious arrears, whacked with another 20% collect and pay fee because the resident parent won’t give the CMS their bank details, they’re bearing all the costs for all the travel back and forth, can’t afford to take the kids on holiday (even if the other parent will let them, often not), and meanwhile the Resident parent got the house, the car, the new partner, child benefits and tax credits, and as a household has an income thousands of pounds greater every month… oh and the resident parent also got legal aid (in the old days) whilst the non-resident parent had to fund their entire legal campaigns for years, just to see their own kids for one Saturday a fortnight at a Macdonalds, on their own.

Let’s not do the whole “heart-strings” thing because frankly there’s so many sad stories out there that it diverts all of our attentions from what’s really needed – wholesale reform of the entire maintenance system.

Sorry, we’ll get back on topic now. Rant over…

Tax evasion… again

Heidi goes on to say

The Work and Pensions Committee, of which I am a member, has already looked into this issue. Much of what we found highlighted the challenges associated with the growth of self-employment and the potential that it creates to hide true earnings.

As child maintenance evasion often goes hand in hand with tax evasion, it seems inefficient and ineffective not to combine forces with HMRC in a proactive way. The Government must surely consider that—especially given that the CMS’s financial investigations unit has so far conducted only four investigations, just two of which have resulted in action.

Heidi is right, she tried to push this through last year and the Government responded logically as our previous articles have already covered. Heidi thinks she knows best though.  She then makes another misrepresentation when talking about the Financial Investigation Unit by saying that they had “only conducted 4 investigations” with 2 successes.

This is totally untrue.

What Ms Allen and the rest of the Work and Pensions Committee was told was that the 4 investigations related to “joint HMRC and DWP efforts” with 2 resulting in custodial sentences (incidentally, the children of the 2 people now in jail will not be receiving maintenance).

CMS Financial Investigations Unit

Voice of the Child has learned that the FIU instigated 13 prosecutions in 2016 and 20 in 2017 YTD. Note, this is not the number of investigations but the number of prosecutions they have brought (which may or may not have been successful).

In terms of the number of “investigations”, we’ve been told that the 54 FIU investigators are currently looking at over 200 cases per month. This in no way implies any wrongdoing on behalf of the paying parents who are currently under the microscope of Barry Porter and his team . For those interested you  can read more about the FIU and the criteria for case referral here.

Then Heidi moves on to talk about Companies House and Limited Companies

This is not a difficult concept to grasp. Parents can see with their own eyes when their exes are living beyond their declared income or assets. For example, a constituent of mine paid just a few pounds to access a public search facility at Companies House which showed as clear as day that the father had drastically under-declared his income through creative company and dividend manoeuvring.

It’s not clear what she means by “creative company and dividend manoeuvring” but she is no stranger to normal  (and perfectly legitimate) practice when it comes to Limited Companies as she herself is a Company Director.

Next she says

In response to our Committee, the Government have said that they will consider how they can include all sources of income in the CMS calculation. That sounds encouraging, but, in the absence of the promised new arrears and compliance strategy, the Bill can be the vehicle to effect the changes that are so desperately needed by introducing measures to help struggling parents and children to secure the maintenance that they deserve. Child maintenance lifts a fifth of single parents on the lowest incomes out of poverty. It provides a lifeline for parents and children, whether that means putting a roof over their heads, covering childcare costs, or enabling children to take part in school trips. It also saves taxpayers’ money.

These proposed changes are likely (according to the DWP themselves) to delay maintenance payments even more as more calculations will be subject to challenges and this will likely cost the Government even money to administer. It will not save money for the taxpayer and it will not help the children receive any maintenance due in a more expedient manner.

The final part of the monologue dealt with the buzzwords of Domestic Violence, Coercive Control and Heidi Allen fails to see the irony of the way that the CMS approaches all people who they deem “Paying Parents”. We hear frequently of heavy handed demands, threats and intimidatory tactics employed by the CMS even when people are up to date with their payments.

Next Steps…

The Bill will be read a second time on February 23rd 2018 BUT the time for action is now. Write to your MP if you disagree with any of the proposals that Ms Allen is proposing. Tell your MP about your case, explain what has caused delays in your payments and calculations, explain what it feels like to owe or be owed arrears amounts that just don’t add up.

Reform is what is needed

We believe that the CMS needs wholesale reform for both Receiving Parents and Paying Parents and all their children who are impacted by this horrendous system. Here’s our list of what needs to be tackled way-way-way before passing any new and ill-conceived legislation to help out 4 of Heidi’s “supermum” mates:

  1. Correct calculations – it isn’t difficult, the formula is simple, there should be zero delays in calculating the correct amount of maintenance due and payable
  2. Fast calculations – see point one above. Taking up to twelve weeks to come up with an incorrect calculation is a nonsense. Either they’re all idiots at the CMS or their expensive computer system isn’t fit for use. A calculation should be able to be generated within seconds, adjusted against the case records, and confirmed by first class post the very next day.
  3. Mandatory reconsiderations – the bane of every paying and receiving parent’s lives. If calculations were accurate and fast, there’d be no need for the sheer amount of MRs currently being processed by the CMS. Let’s get that horse back in front of the cart.
  4. Mandatory reconsiderations (again) – sorry, but waiting weeks and months for some faceless CMS junior to get back to you with what you hope is finally a correct and accurate calculation (but invariably isn’t) is also a nonsense. MR requests should be deal with within 48 hours of receipt unless additional evidence is required. From what we see and hear from both Paying and Receiving Parents the MRs 99% of them apply for are based on evidence and information the CMS already has infront of them.
  5. Education education education – most parents don’t have a clue how the CMS actually works or what the definition of income actually is. Some we speak to mistake the CMS as a collector or righter-of-wrongs for spousal maintenance. It isn’t. The CMS needs to become more transparent and it should do more to educate both Paying and Receiving Parents on how it all works. It shouldn’t take over 2 years to get a full set of policies and procedures out of the CMS (and then only because of Freedom of Information requests despite direct requests or requests through and supported by MPs)  – these should be published publicly on their own website and kept up to date.
  6. Leadership – sack the lot of them and bring in external, commercially and operationally minded experienced individuals to run it. We don’t mean G4S or Capita either. We mean hire employees who know what they’re doing. The same people who screwed up the CSA simply moved over to the CMS and took their incompetence with them. Fire them all. Fresh blood with a customer centric focus, and at least a GCSE in maths, would be a great start.

That’s just for starters and only if we have to stay stuck with the CMS (which ultimately we’d like to see abolished). We actually believe there is a much better, faster, and more accurate way of dealing with most Child Maintenance calculations and issues, but we don’t believe those chumps at the DWP should have anything to do with it.

Heidi Allen knows all of this. Her postbag and email must be full of the same stuff we see. So why on earth is she pushing the same old nonsense?

Here is a list of MP’s who signed the Bill. Is yours among them?

Is your MP on the list? Let them know what you think and perhaps write and ask why they are supporting ill thought out changes to Child Maintenance instead of a review of all the existing legislation and processes. 

Heidi Allen (South Cambridgeshire)

Antoinette Sandbach (Eddisbury)

Mr Ranil Jayawardena (North East Hampshire)

Stephen McPartland (Stevenage)

Suella Fernandes (Fareham)

Frank Field (Birkenhead)

Layla Moran (Oxford West and Abingdon)

Neil Gray (Airdrie and Shotts)

Kit Malthouse (North West Hampshire)

Mrs Cheryl Gillan (Chesham and Amersham)

Kevin Hollinrake (Thirsk and Malton)

Mr Steve Reed (Croydon North)

Has Heidi Allen Misled the House of Commons?

We will be seeking advice on what steps to take with Heidi Allen’s Bill and whether there is any recourse to stop it in its tracks. It seems wholly inappropriate that support should be given to a Bill based on information that is demonstrably incorrect. 

It is incumbent on MP’s to understand documents that they put their name to and we are concerned that the MP’s who have supported this Bill have done so solely on the arguments put forth by Ms Allen without checking the facts and data themselves first.

It seems to us that there is the possibility that she may have misled the House of Commons in presenting her Bill.

 

As always, we want to hear from you. How will changes like this benefit or hurt your children? Do you think this will improve your relationship with your ex partner? Do you trust the Child Maintenance Service to be able to implement any proposals fairly and reasonably? Is there anything else you’d like to say?

Comment below.

In a Family Law system designed for combative parents there is no real allowance for the views of children and any understanding of how Family Law ultimately impacts on children most of all.

We speak for the children in Family Law so that, finally, the children have a voice.

  1. Nick Dawkins on 1st December 2017 at 5:42 PM

    Bad enough how the CMS calculate things now. Been in touch with my MP numerous times (Dennis Skinner), on different things about the CMS. Paying parents get penalised all the time. Especially when you still have to pay your tax & NI on top as well as all your bills leaving very little money to do things with my son when he’s with me. Disgraceful



  2. Voice of the Child on 3rd December 2017 at 2:01 PM

    Hi Nick

    The point you’re making is about the calculation itself as a percentage of your income. It’s an argument we hear from a lot of Paying Parents; that the calculation is set at too high a figure, especially for Paying Parents on lower incomes, leaving them unable to do things with their children when their children do come to stay/see them. They also make the point that as the Paying Parent, even if they have 50/50 or close to 50/50 they receive no child benefits, they have no access to the benefits or other financial help and support that Receiving Parents have access to.

    It’s a difficult one. We can see both sides of the discussion. Could we ask… what do you consider would be a fair percentage of your income to be for child maintenance?



  3. Hazy on 1st January 2018 at 2:10 AM

    o think the answer is quite simple.

    Given that say a 24 year old on the minimum wage of £7.05 an hour working 35hrs a week would earn £246.75 a week. £13,830 a year.

    As a single childless person (no such thing as a non resident parent on benefit system) the threshold/cap for working tax credits is £13,400 so he would get a small amount of working tax credits approx £3 a week but hey! It all helps)

    He would also pay Child support based on his gross wage which results in him effectively receiving tax credits then handing those tax credits + some of his wage over in child support.

    This is crazy and turns the principles of the benefit system on its head. (Minimum a person or family needs to live on)

    My suggestion is that all NRP’s keep the first £13.400 of their salary at all times so that they at least get the minimum a single childless person gets for now.

    Once this 24 year old turns 25 he will then get £7.50 an hour. Hooray! He could therefore maybe pay 20% of all income over £13,400 for one child ,30% for 2 children and so on.

    This does two things , gives him a sensible allowance to live on above the minimum so the have some spare cash which they can use to enhance quality time with their children. This may also make NRP’s feel that things are fairer than before, that child support is more affordable. That they have a defined amount for themselves.

    This should then lead to regular and sustained maintenance payments because it will be seen as fairer.

    If an NRP has children with a new partner ans they are on low incomes they will also get benefits so again they may end up receiving tax credits and paying them out again as child support must still be paid to his children from his ex. This results in his seconds families over all income falling.

    https://ibb.co/n20mpw

    No one on benefits should pay anything in child support it is just too punitive. Why should someone on JSA pay £7 from a pittance if they don’t see their kids (which may be because he is alienated).

    I would urge you to double check everything and to Maybe consider whether or not the suggestions made are practical and sensible and worth thinking about.

    It does however mean that men on incomes lower than £13,400 cannot pay child support but the single parent NEVER gets below their benefits entitlement unless they have some tax credit arrears. A single parent would also not be expected to rear children on £13, 400 hence why she gets the whole gamut of benefits including working tax credits at the couple threshold of £20k.

    This is just one of many possible ideas of what is better than the current method.



  4. Hazy on 1st January 2018 at 2:12 AM

    Fixing an error – correct salary for 24 year old is £12,830



  5. Del_M on 24th February 2018 at 9:54 AM

    Well once again we hear about the poor PWC who is struggling. The same PWC that if he/she cant get a payment she likes from his/ her childs other parent can just pay £20 and have the legal weight of the government to bear, Then can with hold access on a whim and play god with peoples lives, whilst there is no low cost assistance available for the NRP. If the NRP is blocked from access to their child they then cant afford legal help because their already being fleeced. Lets us not forget that these PWC’s are probably in receipt of every benefit due to them, and maintenance is not taken into account. As in they may be in receipt of £100pw but this would not reduce what state assistance they are entitled too?

    A fairer system.? is this a system where 2nd family children are worth the same as 1st? instead of the stupidly low payments of £5 a week but the 1st family children are worth £25+ a week .

    Is fairer where the CMS automatically assumes the children stay with the NRP 3 nights a week as default? Because which PWC would want to deny access in a loving caring manner unless the NRP was found to be a safeguarding issue?

    Is fairer where the percentage taken for collect n pay is equalised?

    Is fairer where CMS payments are calculated up to Min wage because the government states its what we need to live on with a flat rate of say 5-10% for anyone earning anything over £27195(average UK earnings).

    Is fairer where the CMS stop cherry picking the best wage in the last 5 years to assess from or the last as they should?

    Is fairer where the CMS stop breaking data protection laws where they inform the PWC how much a NRP earns?

    Is fairer where maintenance is used as income by the PWC and affects other benefits?

    Fair is a funny word when applied to maintenance cases it seems.



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