Charging for the use of the administrative services was recommended by Sir David Henshaw’s independent 2006 report on child support redesign as a means of incentivising private arrangements, which can be more successful, thereby helping child welfare through increased compliance and reducing the impact on the taxpayer by offsetting operating costs.
Henshaw suggested that, because successful private arrangements require both parents to co-operate, there is a rationale for charging both the parent with care and non-resident parent for using the service, outlining the complementary measures of charging an application fee and charging a percentage of maintenance for using the collection service.
We know that collaboration between parents means better outcomes for children, while resorting to the statutory system can engender conflict between parents. Therefore, the Government’s strategy is to support parents to take as much responsibility as possible for arranging support for their children, rather than defaulting into the statutory system.
The charges that we detail in this paper reflect the rationale and suggestions of the Henshaw report, with the application fee encouraging parents to think carefully about their options before defaulting into the statutory service, while collection fees will provide an ongoing financial incentive for both parents to collaborate and agree to pay and receive maintenance direct. Our client insight research supports this and
we have published this research in full on the Commission website.
Charging for child maintenance services will not generate an overall surplus or ‘profit’ for the Government, although it will reduce the net cost of providing those services; In 2011/12 the Commission spent £428 million on delivering statutory child support services. Combined with significant efficiencies achieved by the new system, charging for some child maintenance services will mean that the net cost of the administrative system is anticipated to drop to just £174 million by 2018/19.