MPs have launched a formal inquiry into the Child Maintenance Service (CMS), and its effectiveness in providing financial support to separated parents and their children. As part of the inquiry, the cross-party Work and Pensions Committee will consider proposals to abolish Direct Pay and instead opt in favour of a more streamlined Collect and Pay model. The examination is also expected to look at whether current payment calculations are fit for purpose.
With around two in five CMS receiving parents reporting non-compliance with payments, the inquiry could bring welcome changes and reform within the system. For many families, the proposals could make payments more reliable and reduce delays. At the same time, there is a risk that more complex arrangements, such as those with fluctuating incomes or changing living arrangements, may still be difficult to manage within the current framework. With inquiry consultation reports due by the end of 2025, what changes to child maintenance law could parents expect to see?
As part of the investigation, MPs will examine how CMS compliance rates could be improved, if plans for moving to Collect and Pay are feasible, how maintenance payment levels should be set, and whether the system properly supports parents. CMS issues have been raised by MPs due to a large number of non-compliant parents.
The most notable change is the proposed abolition of Direct Pay. Currently, parents are allowed to transfer money privately between themselves, known as Direct Pay, with no enforcement powers if payments are missed. Moving to Collect and Pay as the only option would mean the CMS acting as an intermediary in every case. This proposed change does offer significant advantages in tackling non-payments. For parents in PAYE employment, regular deductions from income will make it much easier to secure reliable payments. Receiving parents will also see their fees reduced, meaning more money should be received and, by moving from two separate calculations to a single process, the system should reduce payment wait times for families. Should changes go ahead, compliant parents will pay a 2% service fee, whereas non-compliant paying parents face a 20% surcharge as a deterrent, which will also encourage payments to be made.
The move could encourage compliance from parents who have been reluctant to pay voluntarily, as the prospect of being brought into Collect and Pay may act as a stronger incentive. However, as with any change of this scale, there may be transitional issues as cases are moved across, and parents who have managed well under Direct Pay may feel a loss of flexibility and control. In addition, more complex cases, such as those involving self-employed parents or those with uncertain monthly incomes, may continue to prove challenging.
Another consideration of the proposed changes is the calculation system. CMS payments are based on the paying parent’s gross income, adjusted according to how many nights the child spends in their household. In practice, this can sometimes encourage disputes regarding overnight stays because of the financial consequences, rather than reflecting what is in the best interests of the child. For families with straightforward arrangements, the system can provide certainty. For those with more complex or unique care arrangements, it can add pressure and create conflict.
Fifty–fifty shared care cases present further difficulties. Even where parents genuinely split care equally, the CMS may still impose a calculation. For families who are sharing responsibilities fairly, this can feel arbitrary.
One way the inquiry could bring impactful change is by readdressing the income cap, which is currently set at £156,000 (gross) per annum. This figure has been in place for some time and has not been updated to account for, wage rises, inflation or the rising cost of living. This can leave families in high-cost areas, like London, particularly exposed. As a result, “top-up” cases, where additional maintenance is sought due to the maximum CMS calculation not taking into account the full extent of the non-resident parents’ income, have become more common in the courts. However, these require formal applications that are both expensive and uncertain in outcome. Reviewing the cap annually and/or aligning it with inflation to reflect the real costs of raising a child would create a significant change in how the CMS provides support fairly.
The inquiry may succeed in improving compliance and enforcement, and the move to Collect and Pay could simplify the system for many families. Whilst the reforms are likely to address some long-standing problems, more complex arrangements, such as those involving self-employed or other ‘complex earners’ such as directors of a company, will continue to present challenges unless deeper issues within the calculation model are addressed, including a consistent approach and the level of investigation and / or pursuit of inquires to be the same from case-worker to case-worker.
Ultimately, the CMS should be shaped around children’s needs rather than administrative convenience. The proposed reforms are likely to make life easier for many families by reducing delays and encouraging more consistent payments, but those with more complex arrangements may still face challenges.
Families should be aware of the changes ahead and prepare where possible. Above all, parents should continue to engage with the inquiry process and press for a system that works as effectively and fairly as possible for every child.
Chris Lloyd-Smith, partner in the matrimonial team at law firm, Anthony Collins.
