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DEPARTMENT OF SOCIAL SECURITY

Case No. C.1344/95

Errors and delays in the payment of child support maintenance

11.1 Mrs K complained that she suffered financial loss due to errors and delays by the Child Support Agency (CSA) of the Department of Social Security (DSS) in dealing with her application for child support maintenance (CSM), and that they failed to keep her informed of developments in her case.

11.2 My investigation began in December 1995 once the Commissioner's predecessor had obtained comments from the then Deputy Chief Executive of CSA after the Member's referral of the complaint. I have not put into this report every detail investigated by the Commissioner's staff; but I am satisfied that no matter of significance has been overlooked. Annex A to the report sets out a chronology of the main events in Mrs K's case and annex B lists the initials used in the report and their meanings.

Background

11.3 CSA are responsible under the Child Support Act 1991 (the Act) for the assessment, collection and enforcement of CSM. A parent with care of a child (PWC) who is in receipt of certain qualifying benefits, including family credit (FC), is required under section 6 (1) of the Act to pursue CSM from the absent parent (AP) through CSA. A PWC applies to CSA for CSM on a maintenance application form (MAF). CSA then send a maintenance enquiry form (MEF) to the AP to obtain a financial statement so that the amount of CSM may be assessed under a standard formula. Maintenance assessments (MAs) are made by child support officers (CSOs) at one of six CSA Centres (CSACs). When a MA is made any existing court order for child maintenance ceases to have effect.

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11.4 At the time of the events complained of, under section 8(3) of the Act, once CSA had jurisdiction to make an assessment, no court had power to vary an existing court order for child maintenance. Under the Child Support Act 1995 that provision was revised allowing, from 4 September 1995, a court to vary an existing court order for child maintenance in certain circumstances. Where a court order for child maintenance is in force and a CSO makes a MA he must inform both parents and the court where the order was made.

11.5 Where an application for CSM is made to CSA and either parent is self-employed the application is handled by a specialist team at the CSAC known as the special cases section.

11.6 Where an AP has provided insufficient information to enable a full maintenance assessment (FMA) to be completed, CSA may warn him that a Category A interim maintenance assessment (IMA) may be imposed. CSA's standing instructions require them to send the AP a warning notice, at an address in which they have confidence, before an effective IMA can be imposed. The AP's liability for CSM normally begins on the date (known as the effective date) on which the MEF is sent or given to him. An IMA normally comes into effect during the week which begins 14 days from the sending of a warning notice, on the same day of the week on which the MEF was sent. However, where there is an existing court order for child maintenance, the AP's liability to pay CSM under the Act starts two days after a MA (whether a FMA or IMA) is made. That is to give CSA sufficient time to ask the court to cancel the existing court order. Where a PWC is required to apply for CSM because she is in receipt of a qualifying benefit (paragraph 11.3), and her benefit claim later ends, she may withdraw her application and, if she does, CSA will cancel any MA which they have made.

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11.7 Before 16 February 1995 the decision to impose a Category A IMA did not carry a right of review or appeal, and a defective IMA could only be cancelled on written application from an AP. The Child Support (Miscellaneous Amendments) Regulations 1995 enable a CSO to review a Category A IMA which has an incorrect effective date. That provision was effective from 16 February 1995 but is not retrospective. New regulations, which came into effect on 22 January 1996, enable a parent to apply for a review of a CSO's decision to cancel an IMA which is deemed to be defective due to procedural error but again that provision is not retrospective.

11.8 Where a court order for child maintenance was in force at the time that a MA was made, the AP has made payments of CSM under the MA, and the CSO later cancels the MA on the basis that it was made in error, the court order is treated as having been in force continuously, and any payments of CSM made under the cancelled MA are treated as payments under the court order. Under section 31 of the Act a CSO, acting on behalf of the Secretary of State, may make a deduction from earnings order (DEO) to secure payment of any amount due under a MA. A DEO is an instruction to an employer to make deductions from an AP's earnings direct to CSA. A DEO cannot be made where an AP is self-employed.

11.9 Under DSS's extra-statutory compensation scheme, a special payment may be considered where a person has suffered an actual financial loss as a result of a clear and unambiguous official error. For the purposes of the scheme CSA accept that, at the time of the matters complained of, it would be reasonable to expect a MEF to have been issued within three months where there was no prior court order in place, or within six months where a court order existed. Claims for compensation are considered by CSA's compensation unit (CU).

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Investigation

11.10 Key points are as follows. Mrs K applied for CSM for her child in November 1993 at which time she was claiming FC (paragraph 11.3), and a court order for child maintenance was in force. The CSA took six months before sending the AP a MEF in May 1994, and then only after Mrs K had prompted them to do so as the court had refused to vary her existing court order (paragraph 11.4). In 1994 the AP moved house on several occasions. Although the CSAC imposed an IMA in October 1994 they could not be sure that the AP had received their correspondence. (The IMA was in any event invalid as, acting in the mistaken belief that no court order existed, the CSAC had made it from the wrong date (paragraph 11.6).) By March 1995 Mrs K had still received no CSM and the CSAC imposed a DEO (paragraph 11.8), only to cancel it four days later when they realised that the court order for child maintenance remained in force. Two months then passed before the CSAC wrote to the court asking them to cancel the court order, and another month before they imposed a further DEO in June 1995. They received one payment under that DEO in July 1995, before cancelling it as they had realised that the IMA was invalid. The CSAC then wrote to the court returning to them jurisdiction over child maintenance for Mrs K's child from 24 October 1994. In December 1995, after the CSAC had warned him that a fresh IMA might be imposed, the AP returned a completed MEF which might have enabled a MA to be made, but Mrs K decided to withdraw her application and pursue child maintenance for her child through the courts. Mrs K sought compensation for CSA's errors.

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CSA's response to the complaint

11.11 In his comments to the Commissioner's predecessor, the then Deputy Chief Executive of CSA accepted that Mrs K's application for CSM had been badly handled, and apologised for the shortcomings and errors which had occurred. He said that the initial delay in issuing the MEF had been due to the large volume of work being dealt with by the CSAC at that time. Having issued the MEF they had to be confident that the AP had received their letters before making a MA. That had caused further delay. When making the IMA the CSAC then failed to take account of the court order, as a result of which an incorrect effective date was used. The Deputy Chief Executive said that CSA should not have cancelled the defective IMA but should have reviewed it with effect from 16 February 1995 (paragraph 11.7). He apologised also for the incorrect dates given in the then Chief Executive's letter to the Member of 20 September 1994, and for the CSAC's failure to keep Mrs K fully informed of developments in her case. He said that CSA did not routinely provide updates to applicants; but he acknowledged that the difficulties in Mrs K's case merited greater consideration and he apologised that she had not received further explanations from the CSAC.

11.12 On 19 February 1996, after the Commissioner's investigation began, CU considered Mrs K's claim for compensation. They decided that, as a FMA had not been calculated, and because they concluded that it was not possible to assume a ‘notional' amount of CSM payable, no compensation could be paid (paragraph 11.9) because Mrs K had not suffered a demonstrable financial loss.

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Findings

11.13 CSA's handling of Mrs K's application for CSM was characterised by numerous errors and delays, and when after more than two years she withdrew her application CSA had still not made a valid MA. It took CSA longer than the six months envisaged by their compensation scheme (paragraph 11.9) to issue a MEF to the AP after they had received the MAF from Mrs K. After that poor start the CSAC then proceeded reasonably swiftly to send a warning notice to the AP of their intention to impose an IMA. The next day Mrs K told the CSAC however that the AP had moved from his previous address (which I call address A). In view of that, they clearly could not be certain that he had received the warning notice, and indeed the AP said that he had not received the MEF sent to him on 25 May 1994. Despite Mrs K then giving the CSAC another address for the AP (address B), and her further prompting, they failed to take any further action to pursue him for five weeks, and then concluded (for reasons which I have been unable to determine) that they could no longer be satisfied that they held a reliable address for him, and sought to confirm his address before proceeding. By the time they had received information from the Inland Revenue (the Revenue) on 25 August 1994 purporting to confirm that the AP lived at address B, Mrs K had already notified the CSAC on 22 July 1994 that the AP was moving again; yet the CSAC went ahead and sent the second MEF to address B on 19 September 1994, and a notice to the same address on 3 October 1994 telling the AP that an IMA could be imposed if he did not return the MEF. An IMA was eventually imposed on 25 October 1994 with a putative effective date of 24 October (almost a year after Mrs K's application), but again notification was sent to address B despite the warning Mrs K had given in July that the AP was moving; and three days later Mrs K was able to give CSA details of the AP's latest address (address C), to which CSA eventually sent a further MEF (at the AP's request) on 15 December 1994.

11.14 Clearly CSA's difficulties in tracking down the AP and pursuing him for CSM were due in part to the frequency with which he moved house; and their action in seeking to verify his address with the Revenue was not unreasonable in itself. I consider however that those difficulties might have been considerably reduced had CSA's performance been better. In particular, had they taken action to issue the original MEF timeously there is a chance that the AP would have received it at address A, so that subsequent delays in establishing a valid effective date for a MA could have been avoided. CSA could also have taken action more quickly to seek to contact the AP when notified by Mrs K on 15 June 1994 of his move to address B; while I believe that they could and should have done more to check the AP's next address when told by Mrs K on 22 July 1994 that he was moving again, rather than relying on information subsequently provided by the Revenue which simply confirmed details of address B which they already held.

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11.15 Having determined that an IMA should be imposed the CSAC then made a crucial error in failing to notice that there was an existing court order for child maintenance, in consequence of which the IMA of 25 October was given the wrong effective date of 24 October 1994 rather than 27 October 1994 (ie two days after the date the MA was made (paragraph 11.6)). I strongly criticise the CSAC for that fundamental mistake which nullified most of CSA's subsequent attempts to obtain CSM from the AP. Other errors were also made. On 15 December 1994 the CSAC sent the AP a further MEF as he had told them that he had not received any of the forms which had been sent to him previously. As they had in taking that action implicitly accepted that the earlier documentation might not have reached the AP, they should have treated the original IMA as unsafe and issued a further warning notice (and, if appropriate, imposed a fresh IMA) before considering DEO action. On 6 February 1995 the AP reminded the CSAC of the continued existence of the court order but the CSAC went ahead and imposed a DEO on 9 March 1995, only to have to cancel it four days later. The CSAC then took no action to cancel the court order itself until 16 May 1995, and then reimposed the DEO on 21 June without first checking whether the original IMA was valid. Two months later a CSO discovered that the effective date of the IMA was wrong, but the CSAC then cancelled the IMA instead of reviewing it as allowed by the regulations which had been introduced from 16 February 1995 (paragraph 11.7). In the meantime the CSAC had sent the AP yet another MEF on 13 July 1995, adding further to the potential confusion about the status and progress of Mrs K's application for CSM. To cap that catalogue of ineptitude CSA realised that, because the original IMA had been given the wrong effective date, they had asked for the court order to be cancelled from the wrong date also. In consequence the court agreed retrospectively to take back jurisdiction over Mrs K's case for the whole of the period in question. As a result of all those errors Mrs K received only one payment of what was intended to be CSM, the £477.26 paid under the DEO of 22 June 1995, which was later treated as payment under the court order.

11.16 That consistently poor performance and abject failure to secure CSM for Mrs K over such a long period merits my strong criticism.

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11.17 I turn next to Mrs K's complaint that CSA failed to keep her informed of developments. The then Deputy Chief Executive has acknowledged (paragraph 11.11) that CSA could and should have done more to let Mrs K know what was happening in her case and I criticise the CSAC for their failure to do so.

11.18 What were the consequences of all those errors for Mrs K? CSA have taken the view (paragraph 11.12) that compensation was not warranted because, in the absence of a FMA, Mrs K had not suffered a quantifiable financial loss. That did not seem to me to be a reasonable response to the clear maladministration that occurred in her case in consequence of which Mrs K received only one child maintenance payment through CSA in two years. How might matters have fallen out if CSA had dealt with Mrs K's application promptly and accurately from the outset? Had matters been dealt with in the timescale envisaged by the compensation scheme (paragraph 11.9), the MEF would have been issued by 3 May 1994, and the AP's liability established from 4 May 1994. I therefore asked the Chief Executive of CSA to look again at the possibility of compensating Mrs K, at an assessed FMA rate, for the value of CSM she had forgone as a result of CSA's maladministration (less the payment of £477.26 and any money received by Mrs K during the relevant period under the court order), together with additional compensation for the loss of use of the sum in question. In reply CSA agreed to make notional assessments in the light of the best available evidence and, on that basis, they calculated that the AP could have been liable for CSM of £70.78 a week from 4 May 1994, increasing to £71.48 a week from 18 April 1995. The AP had become unemployed from 5 January 1996 and would from then have been required to make a small contribution to maintenance which CSA calculated to be £1.64 a week. During the period from 4 May 1994 to 13 March 1996, however, the AP had been liable for child maintenance of £20 a week under the court order, and so the additional CSM which Mrs K might have received had CSA dealt with her case timeously was therefore £50.78 a week from 4 May 1994 to 17 April 1995, £51.48 a week from 18 April 1995 to 4 January 1996, and £1.64 a week from 5 January 1996 to 13 March 1996 (the date on which Mrs K's application to CSA had been closed). CSA calculated that loss to be £4,467.39, and agreed to make Mrs K an ex gratia payment for that sum plus £609.68 to compensate her for the loss of use of that money. I welcome CSA's agreement to award compensation on that basis, which I am content makes good the consequences for Mrs K of their maladministration.

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Conclusion

11.19 Mrs K's application for CSM was extremely poorly handled. I regard the then Deputy Chief Executive's apologies together with the ex gratia payments totalling £5,077.07 to be a very suitable outcome to my investigation of a fully justified complaint.

16 March 1998

Summary

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Last updated: 26 April 2006