CMS Debt Negotiation Tool

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The CMS has an increasing caseload, and contrary to their core principles and remit, an ever increasing pot of arrears.

As part of their operating policies the CMS are supposed to negotiate with Paying Parents on how best arrears can be collected in a manageable and sustainable way, ensuring that the arrears are eventually paid off and that the welfare of any children involved are taken into consideration. This includes all children of both the Receiving Parent’s household and the Paying Parent’s household.

We have seen an increase in calls for enforcement for the collection of arrears and we have seen a corresponding increase in the application of Deduction of Earnings Orders (DEOs),  Lump Sum Deduction Orders (LSDOs), and Regular Deduction Orders (RDOs) however the CMS are unable to tell us how many cases they have entered into arrears negotiations with. It seems their multi-million Pound systems cannot surface any information on this…

We digress…

Arrears negotiations and debt negotiations are supposed to be the second step in managing a case with arrears, the first being to correctly identify and quantify the amount of arrears.

Just as we now know that the CMS have a very poor record in quantifying arrears we now also know that they are not entering into debt negotiations correctly – instead they are going straight for enforcement and attempting to collect arrears within their self-imposed limit of two years. As we have seen from our survey responses, although it is important that arrears are collected in a  timely fashion, it is much more important to obtain the compliance of the Paying Parent in agreeing a collection rate as this leads, more often than not, to a sustained payment plan and schedule.

A researcher recently asked the CMS:

1. Please provide a copy of your 2012 Debt Negotiation Support Tool.

2. Please provide copies of any of your internal policies and procedures that relate to or mention the use of this tool.

3. Please detail the training that you provide to your case workers and team managers on the use of this tool including any elearning modules, face to face training, webinar training, or off-the-shelf training that you may provide.

4. Please provide the completion rates for any training you detail in response to my question above – ideally by year for 2015, 2016, and 2017, and if you are able, and it is within cost limits, the breakdowns between case worker completions and team managers

A researcher has obtained a response from the CMS alongwith copies of the following documents and tools:

The CMS responded in reference to these tools to say:

1. Please find attached Annex A with this response a copy of the 2012 Debt Negotiation Tool.

2. Please find attached Annex B with this response a copy of the Arrears Negotiation and Missed Payments procedures, which refers to the 2012 Debt Negotiation Tool.

3. The use of the 2012 Debt Negotiation Tool is optional to provide additional support and as such training was provided through a series of on-line walkthrough sessions, utilising the 2012 Debt Negotiation Tool User Guide; attached with this response as Annex C.

4. As the training was provided on an informal basis, no record of completion rates or costing’s were recorded.

We have not linked to Annex A as the CMS supplied a locked XLS file, with embedded macros which could be used to track or harm your computer. We have asked for an unlocked and macro-free version.

In Annex B you will see that the CMS own policies and procedures state:

Arrears negotiation may be needed at any stage during the lifecycle of a case. The following circumstances may trigger negotiation:

  • Arrears negotiation requested by the paying parent
  • Arrears negotiation prior to enforcement action
  • CSA arrears transitioned onto the CMS for collection
  • Changes to the arrears balance following a change of circumstances, revision, or other decisions on the case
  • Arrears negotiation instigated by a caseworker
  • Arrears negotiation required following a change of service type to direct pay

It goes the CMS policy goes on to say:

For employed paying parent’s, the first action will be a deduction from earnings order (DEO).

This is plainly not what they should be doing!

The first action should always be to negotiate with a Paying Parent and agree a sustainable and realistic plan to pay off arrears.

When dealing with self-employed paying parents they take a slightly different approach:

For self employed or unemployed paying parent’s, or when parallel action is needed on a DEO, maintenance caseworkers must consider other enforcement options. Before referring a case to enforcement, caseworkers follow the arrears negotiation process to give the paying parent a final chance to negotiate payment.

In other words employed Paying Parents should go straight to DEO but the CMS are telling themselves to negotiate with the self-employed or unemployed Paying Parents that they can’t enforce a DEO immediately with. Again, this is plainly wrong and not what they should be doing!

Talking of Paying Parents there is also this interesting snippet:

If arrears negotiation is unsuccessful, no immediate action is needed if it was requested by the paying parent.

In other words, if a Paying Parent has requested a debt negotiation to attempt to reach a sensible, sustainable, and realistic payment plan but the CMS refuse to accept what the Paying Parent, then they can just ignore the Paying Parent who is trying to reach agreement with them.

Just going back to the first action for a moment: Annex B includes the following instruction to CMS caseworkers:

If the Action Missed Payment SR is received, there is a responsibility to negotiate payment of the CSM and/or residual arrears with the paying parent

They also say that the Caseworker should:

Call the paying parent and explain that the purpose of the call is to discuss missed payment and negotiate a lump sum payment/payment of the arrears. While negotiating payment, consider the debt steer principles while establishing continuous sustainable payments.

When negotiating with a Paying Parent the caseworker should:

Record whether the paying parent is willing to make a payment. Select one of the following options in the activity plan:

  • Willing to make card payment: debit/credit card payment (also referred to as immediate methods of payment)
  • DD represent: where the method of payment from (MOPF) is direct debit (DD) the payment request can be resubmitted in certain situations
  • Willing to make payment by non immediate method: cheque, banking head office collection account (BHOCA), internet banking
  • Not willing to make payment: where the paying parent refuses to pay or cannot pay due to an allowable change of circumstances
  • Negotiation Requested: where no one-off payment made and the arrears are to be rescheduled

It goes on as follows:

If the paying parent does not agree to make a one off payment, explain what enforcement action could be taken to recover the arrears and if dealing with an open case how this will impact on their ability to avoid future charging due to the unlikely to pay check.

They also warn their caseworkers:

Prior to renegotiating arrears on an open case firstly discuss with paying parent the non negotiable OGM/collection charges that will be due up till AR. Not doing this may have an adverse affect on any arrears negotiation.

We know that Paying Parents are often told or served with payment schedules that aim to collect any arrears before the next annual review or within a two year period whichever is the shorter period. Our research also shows that the CMS are not negotiating with Paying Parents, certainly not employed ones, and are immediately issuing DEOs to collect arrears, even when a Paying Parent has warned them that this is not sustainable and has asked to negotiate on a more appropriate payment scehdule.

In Annex B the CMS tell their own caseworkers:

Negotiated Schedule Acceptable – Tick this box if the negotiated schedule is acceptable. IE the paying parent’s offer to pay is reasonable considering their circumstances, use discretion to decide if this is acceptable, even if it exceeds 24 months. In this situation, explain to the paying parent that the arrears agreement will be reviewed when their circumstances change.

This is a discretionary decision, this includes making a Welfare of the Child Decision, for more information on discretionary decisions including a verbatim statement to record in Notes refer to Policy, Law and Decision Making Guidance

There’s a couple of thing to note from this:

  • A caseworker can negotiate any payment schedule with a Paying Parent
  • This is a discretionary decision so it is down to the caseworker to justify
  • The caseworker must/should make the Welfare of the Child a component of this decision – and this includes all children, not just the children of the Receiving Parent

They even have a category on their system to allow for arrears payment schedules that last longer than 24 months:

Breaches Debt Steer – where the agreed payment extends beyond 24 months

Once arrears negotiations have been agreed the CMS communicate this with the Receiving Parent and confirm this with the Paying Parent. You’ll note from their policies that there is no provision for them having to have an agreement from the Receiving Parent on whether to accept an agreement or at what level. The decision is completely down to the individual caseworker.

Call the receiving parent when the schedule has been set up. The system will automatically send negotiation outcome letters to the paying parent and receiving parent/s for Collect & Pay cases, but letters for Direct Pay cases must be issued clerically.

Do you owe arrears on your CMS case?

If you owe arrears on your case then the first thing you should do is establish whether these are correct.

Once you have an exact amount of arrears you need to consider how best to pay these off. They won’t go away and you owe the money so it is up to you to ensure that you pay these. The best way to do this is to try and negotiate a sustainable and reasonable payment schedule with the CMS.

Remember though, despite what they tell you:

  • You can agree a payment schedule that lasts longer than 2 years
  • It is down to the caseworker you’re speaking to to make the decision
  • They need to take into account your cicrumstances
  • They need to take into account the sustainability of any payment schedule you propose
  • They need to consider the Welfare of the Child for ALL children including your own.

If you don’t get anywhere, complain, and write to your MP.

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