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Labour announces review into child maintenance services

Helen Goodman, Labour’s Shadow Minister for Welfare Reform, today announced Labour will bring forward a review into the functioning of the controversial 2012 Child Maintenance Service if they win in May.
 
As evidence mounts that the new Child Maintenance Service is leaving single parents without the money they are owed, often leaving families in severe hardship, Labour has committed to bringing forward the review to make sure lone parents get the help they are entitled to. Originally scheduled for 2016, Labour will start the review process as soon as they are elected.
 
Helen Goodman said:
 
“David Cameron pledged that his government would be the most family friendly ever, but he has left single parents fending for themselves. This government introduced charges for accessing the child maintenance service, despite the fact that their own assessment said this would put parents off applying. They have also failed to tackle the shocking growth in maintenance arrears.
 
“Child maintenance can make all the difference – lifting one in five of the poorest families above the poverty line. It is children and lone parents who are paying the price of this government’s callousness and incompetence. Labour will review the Child Maintenance Service and make sure it works in the interests of the child.”
 
Ends

·         A new Child Maintenance Service was introduced in 2012, gradually phasing out two older child maintenance systems. However, the government decided to impose charges on parents for accessing the system:

-          £20 application fee to the Child Maintenance Service (with no guarantee of getting anything back). There is an exemption for victims of domestic violence but this does not seem to be well advertised

-          The service encourages parents to make ‘private arrangements’ between themselves rather than using the collection service by charging the non-resident parent a fee of 20% of the child maintenance and the parent with care 4%, e.g., if the child maintenance is £100, the non-resident parent pays £120 and the parent with care receives £96. The government collects a fee of £24

-          The fees are putting people off using the service. The government’s own impact assessment warned that at least 12% are being put off. These are likely to be poorer parents with care who need the money most. 

·         The government is failing to collect child maintenance arrears. A total of £3.8bn is owed in child maintenance arrears, £1bn of which is owed in “live” cases. In almost half of these cases no money is flowing and £2.9bn  of which has been classified as “uncollectable”
 
·         These changes come at a time when lone parents are already hit hardest by the Coalition’s actions. According to analysis of IFS, ‘The effect of the coalition’s tax and benefit changes on household incomes and work incentives’, working lone parents have lost £1,560 a year as a result of tax and benefit changes
·         Child poverty has risen by half a million under the Coalition government according to official HBAI figures
 
 
Number of children in absolute poverty in real terms after housing costs
 
%
No. (millions)
1997-98
42
5.4
2009-10
27
3.6
2012-13
31
4.1

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