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Parliamentary Commissioner for Administration

First Report Session 1998-99

Volume 3 - 1st Report - Session 1998-99

DEPARTMENT OF SOCIAL SECURITY

Case No. C.811/97

Errors and delays in the payment of child support maintenance

10.1. Miss A, a parent with care (PWC), complained that the Child Support Agency (CSA) of the Department of Social Security (DSS) failed to make a valid maintenance assessment (MA) after she had asked them to re-open her case and that she lost child support maintenance (CSM) as a result. She also complained that CSA's subsequent delays and their failure to enforce payment meant that she was deprived of regular CSM payments.

10.2. My investigation began in September 1997 once the Ombudsman 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 Ombudsman's staff, but I am satisfied that no matter of significance has been overlooked. An annex to this report lists the abbreviations used and their meaning.

Background

10.3. CSA were set up as a result of the Child Support Act 1991 (the Act) to administer the assessment, collection and enforcement of CSM. A PWC claiming one or more of a number of prescribed benefits, including family credit (FamC), is normally required under section 6(1) of the Act to apply for CSM for a qualifying child or children. A PWC not claiming a prescribed benefit may apply under section 4(1) of the Act provided there is no existing court order or written agreement for child maintenance made before April 1993, and such an applicant may withdraw her application at any time. A PWC applies for CSM by completing a maintenance application form (MAF) which provides information about her financial circumstances and details about the absent parent (AP). CSA then send a maintenance enquiry form (MEF) to the AP to obtain a financial statement so that a MA can be made under a standard formula. CSA accept that, at the time relevant to Miss A's case, they should have been able to issue a MEF within three months of receipt of the relevant MAF. MAs are made and reviewed by child support officers (CSOs) located in regional CSA Centres (CSACs). CSOs are normally responsible for notifying the persons concerned about any decision they make but a decision remains in existence even if the relevant persons are not notified. The date from which an AP's liability to pay CSM starts is known as the effective date and if there is no court order in existence it is normally the day on which the MEF was sent or given to the AP. However, if the MAF was issued on or after 18 April 1995 and the AP returned the completed MEF within four weeks from the day on which it was sent to him, the effective date is deferred by eight weeks. In accordance with arrangements introduced on 2 December 1996, once a MA has been made under the standard formula either parent may apply for a departure from the formula to take account of special expenses or exceptional circumstances. Acting on behalf of the Secretary of State for Social Security, CSA may either decide such an application or refer it for consideration by a Child Support Appeal Tribunal (CSAT).

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10.4. Where CSA seek to recover from an AP arrears of maintenance which have accrued for any reason they must first send him an arrears notice itemising the amounts owed. That gives the AP the opportunity to pay the full amount or to negotiate a voluntary agreement to pay the arrears over a period of time. Where such an agreement cannot be reached and the AP is in paid employment but not self-employed, section 31 of the Act enables CSA, acting on behalf of the Secretary of State, to issue a deduction from earnings order (DEO) to secure payment of both arrears and regular CSM directly from the employer. CSA can subsequently discharge such a DEO if, among other reasons, it becomes apparent that the Secretary of State did not have jurisdiction to make it.

10.5. Under section 16 of the Act CSA must carry out periodical reviews every 104 weeks for all MAs with effective dates on or after 18 April 1994. Under section 17 either parent may apply at any time for a review if there has been a relevant change in the circumstances of either parent and under section 19 a CSO may review a MA if, among other reasons, it appears to be defective because it was made in ignorance of a material fact. Under section 18 a parent who is dissatisfied with a CSO decision on the grounds of error in either fact or law may apply for a review to be carried out by a different CSO. If a parent remains dissatisfied with the outcome of such a request he or she may then appeal to a CSAT. Such an appeal may either be against the outcome of the review or against a refusal to undertake such a review. Before an appeal is heard, CSA's central appeals unit prepares a submission to the Independent Tribunal Service (ITS) which is responsible for administering CSATs. If an appeal is successful, the CSAT remit the case to be reassessed by a CSO and may give such further directions as they consider appropriate. It is not for the Ombudsman to question the decisions of CSOs on liability to pay CSM and the decisions of the appellate authorities are outside his jurisdiction. I refer to such matters in this report only to set in context the administrative handling of Miss A's case.

10.6. Under the terms of the extra-statutory DSS compensation scheme, the scope of which the Ombudsman and his predecessors have accepted, CSA may make a special payment to a person who has suffered financial loss as a result of official error. The aim of such redress is, as far as possible, to restore such a person to the position he or she would have been in if there had been no maladministration. Within CSA, applications for compensation are dealt with by the Agency's special payments unit (SPU).

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Investigation

1994

10.7. On 19 July 1994 the CSAC responsible for handling Miss A's case (the CSAC) received a completed MAF which Miss A had submitted under section 4 of the Act (paragraph 10.3) and in which she said that she was living in the same house as the AP of the qualifying child (Mr X) as the ownership of the house was in dispute. The CSAC sent a MEF to Mr X on 19 October. On 4 November the CSAC received a letter from Miss A withdrawing her application. They closed her case on 18 November but did not notify either parent. On 21 November the CSAC received another letter from Miss A saying that she wished to proceed with her application.

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1995

10.8. On 2 January 1995 Miss A gave the CSAC a new address for herself and the qualifying child and asked them to take urgent action on her case because she was receiving no financial support from Mr X. On 10 January Miss A began to receive FamC. On 3 February the CSAC sent another MEF to Mr X which he returned on 28 February. Miss A telephoned the CSAC on 20 March and 20 April to check on progress and, after she had written to them on 23 April to complain about the handling of her case, the CSAC wrote to her on 24 May to apologise for the delays she had experienced. Meanwhile, on 5 May, a CSO had made a MA for £24.02 per week with effect (paragraph 10.3) from 19 October 1994 and the CSAC had notified both parents on 9 May. On 20 May Miss A asked the CSAC to review the MA (paragraph 10.5) because she did not believe that it reflected Mr X's true income and on 2 June Mr X also requested a review. On 19 June a CSO decided that there were no grounds for undertaking the section 18 review requested by Miss A and she lodged an appeal against that decision on 5 July. By that time the CSAC had received a letter from Miss A on 27 June asking for a detailed explanation of how the MA had been calculated, which they provided on 11 July. Miss A then made a further request for a section 18 review on 17 July. She said that the MA had been based on earnings which did not represent her normal income and she disputed Mr X's income. The CSAC wrote to Miss A on 24 July to explain how her average income had been calculated. She wrote back on 26 July to point out that they had not answered her query about Mr X's sources of income, and on 4 August the CSAC accepted that they had overlooked the question of whether Mr X had any additional sources of income and said that the matter would be investigated. By that time, a CSO had already decided on 2 August that there were grounds for a section 18 review of Miss A's earnings.

10.9. On 5 September 1995 Miss A complained to the CSAC about the delays in collecting CSM and undertaking the section 18 review. On 25 September the CSAC issued a DEO (paragraph 10.4) to Mr X's employers who told the CSAC on 4 October that they did not propose to implement the DEO because they considered that it would have a detrimental effect on Mr X's welfare. Miss A wrote to the CSAC on 12 October to ask them whether they had made any enquiries into Mr X's earnings from other sources. On 19 October a CSO undertook the section 18 review which Miss A had requested on 17 July (paragraph 10.8) and concluded that the closure of the case in November 1994 meant that the validity of the MA was uncertain. The CSO sought advice from the CSAC's quality assurance team who wrongly advised that, because the parties had not been notified when the case was closed, jurisdiction to make a MA (and consequently to conduct a section 18 review) depended on whether Miss A and Mr X had maintained separate households when they had resided at the same address and that, if they had not, the MA should be cancelled. The CSO also identified that Miss A had been in receipt of FamC since January 1995 (paragraph 10.8). The CSAC decided to discharge the DEO (paragraph 10.4) because of the uncertainties concerning the validity of the MA and they wrote to tell Mr X's employers on 23 October.

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10.10. On 9 November 1995 the CSAC replied to Miss A's letter of 5 September (paragraph 10.9) confirming that her second request for a section 18 review had been accepted. Having arranged for both Mr X and Miss A to be interviewed about their former living arrangements, a CSO decided on 21 November that they had maintained separate households and the CSAC formally notified both parents on 27 November of their intention to carry out a section 18 review. Miss A telephoned and wrote to the CSAC on 30 November to express her concerns that the accuracy of Mr X's declared income might not be investigated. On 13 December a CSO decided that the CSAC should not have reopened Miss A's case without asking her to complete a fresh MAF and that the MA made on 5 May 1995 was therefore wrong in law as there had been no valid application in existence. The CSAC notified both parents of that decision on 13 December and sent a MAF to Miss A. They then cancelled Mr X's arrears of CSM on 15 December. On 18 December the CSAC received a letter from Miss A, written on 13 December, in which she complained about the treatment of her case and the fact that she had lost 18 months' worth of CSM. On 20 December they received her completed MAF, in which she confirmed that she was receiving FamC; and on 21 December the Member wrote to the CSAC to ask how Miss A could claim compensation for the CSM she had lost.

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1996

10.11. On 9 January 1996 the CSAC sent a MEF to Mr X via his solicitors which they received back, completed, on 24 January. On 16 January the CSAC replied to Miss A's letter of 13 December 1995 (paragraph 10.10) explaining why the MA had been invalid and apologising for the distress caused to her. On 23 January CSA's central appeals unit sent a submission to ITS in respect of Miss A's appeal of 5 July 1995 (paragraph 10.8) and returned Miss A's case papers to the CSAC. On 24 January the CSAC replied to the Member's letter of 21 December 1995 (paragraph 10.10) explaining the procedure for claiming compensation. Miss A wrote to the CSAC on 27 January seeking confirmation that her compensation claim was being considered, and on 29 January the CSAC told the Member that SPU (paragraph 10.6) would consider her claim when the MA had been calculated. On the same day the CSAC telephoned Miss A to advise her of the current position on her case and she wrote to them on 4 February to say that she was still concerned about the question of Mr X's earnings. On 4 March a CSO made a MA for £30.01 per week, effective from 6 March 1996 (which, as it was intended to be eight weeks from the date on which the MEF had been issued (paragraph 10.3), should have been 5 March 1996). The CSAC notified both parents of the MA on 5 March and on 11 March they told Miss A that she could expect the first payment of regular CSM on 14 May. On 13 March Mr X requested a section 18 review; and on 22 April Miss A also asked for a section 18 review, enclosing documents which she said should help CSA to establish that Mr X had not declared his true income. On 8 May a CSAT heard Miss A's appeal of 5 July 1995 against the original MA (paragraph 10.8) and dismissed it on the grounds that they had no jurisdiction to deal with an appeal based on an assessment which no longer existed. Meanwhile the CSAC had forwarded Miss A's compensation claim to SPU on 1 April, but SPU returned the claim to the CSAC on 24 May because they said that they could not reach a decision while there was an outstanding section 18 review.

10.12. As Mr X had failed to make any payments of CSM despite CSA issuing an arrears notice (paragraph 10.4) on 7 May 1996 and a DEO warning letter on 23 May, the CSAC issued a DEO to his employer on 26 June for weekly payments of £30.01 for regular maintenance plus £4.80 towards arrears, starting on 19 August. The CSAC told Miss A on 5 July that once the section 18 review had been completed they would return her file to SPU to consider her compensation claim. On 21 August Miss A telephoned the CSAC to tell them that the DEO had not been honoured, and on the same day the CSAC wrote to ask Mr X about his current circumstances including details of any undeclared sources of income. On 6 September Mr X's employers told the CSAC that they had not received the DEO notice issued in June and so the CSAC decided to issue a duplicate notice by recorded delivery. On 9 September the CSAC received a reply to their letter of 21 August to Mr X which said that he had no income from share dividends, debenture interest or drawings as a director of the company employing him. On 12 September the CSAC told the Member that the first payment under the DEO was expected by 19 October, and they apologised for any inconvenience caused to Miss A in her dealings with them. On 26 September a CSO completed the section 18 review and, in the light of the information which the CSAC had received from Mr X on 9 September, reduced the MA to £14.76 per week from 6 March to 7 April 1996 and to £13.57 from 8 April 1996. The CSAC notified both parents on the following day and returned Miss A's file to SPU. On 3 October Miss A appealed against the outcome of the section 18 review because she said that it had not taken account of details she had provided about Mr X's undeclared income. On 10 October Miss A wrote to the then Chief Executive about her outstanding compensation claim. On 18 October SPU decided that Miss A did not qualify for compensation because, as Mr X had not contributed to the support of his child before CSA's involvement, she had suffered a financial disappointment rather than an actual loss; and the CSAC notified Miss A of that decision on 24 October.

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10.13. Meanwhile on 22 October 1996 the CSAC had issued a new DEO to reflect the revised MA (paragraph 10.12). On 23 October Mr X had complained to the CSAC about the DEO and Miss A had telephoned them about the fact that Mr X's employer was not complying with the DEO. She then wrote to the CSAC on 24 October, pointing out that Mr X had been a director of the company which now employed him as company secretary and providing details of a new address for Mr X which she said was his parents' home. (She subsequently asked the CSAC on 25 November, 5 December and 18 December to acknowledge that letter but I have seen no evidence that they ever did so.) On 1 November the CSAC replied to Miss A's letter of 10 October (paragraph 10.12). They told her that the departures procedure (paragraph 10.3) was due to start in December 1996 and that they would advise her in due course about how and when to apply. Also on 1 November the CSAC telephoned Mr X's employer about the DEO. The employer agreed to send in the first payment on 8 November, but failed to do so. On 4 November Mr X told the CSAC that he would prefer to pay by direct debit and on 11 November they sent him a direct debit mandate. After Miss A had complained on 4 November about the decision to refuse her application for compensation (paragraph 10.12) and the Member had written about the matter on 7 November, the CSAC resubmitted Miss A's application for compensation to SPU on 19 November. On 10 December the CSAC sent Mr X's completed direct debit mandate to his bank and on the following day they told Miss A that the frequency of CSM payments would be changed from weekly to monthly. On 18 December CSA sent a form to Miss A to apply for a departure and she wrote to the CSAC on the same day seeking their assurance that if Mr X defaulted on the payment of CSM they would take immediate enforcement action, objecting to the amount of arrears which Mr X had been asked to pay and asking for her CSM to be paid directly into her bank account.

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1997

10.14. On 2 January 1997 SPU told the CSAC that their earlier decision not to award compensation to Miss A (paragraph 10.12) should stand. The CSAC did not notify Miss A directly of that decision but they told the Member on 28 January in reply to a letter of 17January from him. Meanwhile, on 7January Miss A had submitted an application under the departures procedure, for which she supplied further supporting information on 15 January and 25 February; while on 21 January the central appeals unit referred Miss A's appeal of 3 October 1996 (paragraph 10.12) to ITS. CSA decided on 23 March that her application under the departures procedure should be referred for consideration by a CSAT, but they did not send it to ITS until 20 June and did not send their submission on it (paragraph 10.5) to ITS until 18 December 1997. In the meantime, on 20 January the CSAC had identified that the payment of CSM due on 13 January under the direct debit arrangement had failed. They asked Mr X on the following day to make the first payment by cheque, which he did on 23 January; and they received his first payment by direct debit on 13 February. On 4 March the CSAC completed arrangements for CSM payments to be made directly into Miss A's bank account as she had requested (paragraph 10.13). On 9 April a CSAT heard Miss A's appeal of 3 October 1996. They noted that there were strong grounds for suspecting that Mr X's financial resources were greater than those he had declared to CSA and so they directed that, as they had seen evidence that he had claimed a daily loss of earnings of £288 for a court attendance, the MA should be based on that assumption. As ITS subsequently mislaid the tape on which the chairman had dictated the tribunal's full decision, CSA did not receive the CSAT's direction until 26 August but on the following day CSA reassessed Mr X's liability at £96.50 per week from 5 March (paragraph 10.11) to 7 April 1996 and £98.50 per week from 8 April 1996. However, as that assessment had been based on incomplete information, a CSO undertook a section 19 review (paragraph 10.5) on 24 September and amended the MA to £96.18 per week from 5 March to 7 April 1996 and £99.09 per week from 8 April.

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CSA's response to the complaint

10.15. In his comments to the Ombudsman, the then deputy Chief Executive of CSA said that he had written directly to Miss A to apologise for the shortcomings in dealing with her case. He acknowledged that when Miss A had written to the CSAC in November 1994 they had missed the fundamental point that they should have sent her a fresh MAF, and he apologised for the length of time it had taken to rectify that error. He also apologised for the fact that the second MA had originally been set from the wrong effective date and for the delays in completing the reviews requested by both parents.

Subsequent events

10.16. DSS told the Ombudsman's staff on 12 February 1998 that, having reconsidered Miss A's compensation claim, CSA had made an ex gratia payment of £2,660.91 to her on 11 February 1998. They said that that had included a payment of £2,226.09 to compensate Miss A for the delays arising from CSA's failure to issue a second MAF as soon as she had asked for her case to be reopened along with £254.82 to compensate her for the loss of use of that sum; £30 to cover the additional telephone and postage costs which she had incurred as a result of CSA's persistent errors and delays in handling her case; and a consolatory payment of £150 to compensate her for the gross inconvenience she had suffered as a result of CSA's actions. DSS told the Ombudsman's staff that CSA had calculated the sum of £2,226.09 by applying their standard formula for cases where a PWC was in receipt of FamC to the assumption that, if the MEF issued on 3 February 1995 (paragraph 10.8) had been valid, the MA for £96.18 per week (paragraph 10.14) would have been effective from 3 February 1995 rather than from 5 March 1996. DSS also said that CSA had told Miss A that the special payments arrangements under which the compensation decision had been made were under review and that they would revisit her award, if appropriate, once that review had been completed.

10.17. On 16 May 1998 DSS told the Ombudsman's staff that on 5 May 1998 CSA had completed a change of circumstances review to take account of the information which Miss A had provided in her letter of 24 October 1996 (paragraph 10.13) and had revised the MA to £98.47 per week from 23 October 1996; and that on 6 May 1998 CSA had completed a periodical review of the MA (paragraph 10.5) and had revised the MA to £5 per week from 3 March 1998.

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Findings

10.18. As the then Deputy Chief Executive has acknowledged (paragraph 10.15), CSA's fundamental mistake was in failing for far too long to realise that they should have issued Miss A with a fresh MAF as soon as she had asked for her case to be reopened (paragraph 10.7). I criticise CSA most severely for that crucial error which, unfortunately, was symptomatic of the generally poor service which Miss A received from them. Thus, in particular, I also criticise CSA for their failure to reply to Miss A's letters of 12 October 1995 (paragraph 10.9), 30 November 1995 (paragraph 10.10), 4 February 1996 (paragraph 10.11) and 24 October 1996 (paragraph 10.13); for the fact that it took them 18 months (paragraph 10.17) to carry out the section 17 review arising from the reference in her letter of 24 October 1996 to a change in Mr X's circumstances and five months to complete the section 18 review which she had requested in April 1996 (paragraphs 10.11 and 10.12); and for taking almost three months to deal with her request to change the method by which she received CSM (paragraphs 10.13 and 10.14).

10.19. Furthermore, although I am also satisfied that CSA did what they could under the powers then available to them to follow up Miss A's concern that Mr X had not declared the full extent of his income (paragraphs 10.11 and 10.12), including telling her about the departure procedure (paragraph 10.13), it is unfortunate for Miss A that it has since taken so long for her application for a departure (paragraph 10.14) to be dealt with. I criticise CSA for the three month delay between deciding to refer her application to a CSAT and sending it to ITS and for their further delay in providing a submission on the case to ITS (paragraph 10.14). However, I accept that the subsequent delay has been beyond CSA's control and so I sought the views of the President of ITS on it. In reply, a representative from his Office said that ITS had not referred Miss A's application for a departure to a chairman until 12 June 1998 and that, although he had returned it within ten days with full instructions for listing, the next available hearing date had not been until 8 September 1998. She offered the President's unreserved apologies for that unacceptable delay and said that ITS had improved their procedures in an attempt to remedy the situation.

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10.20. Similarly, Miss A lost out as a result of delays in dealing with her appeal of 3 October 1996 (paragraph 10.12) but, again, while criticising CSA for the delay of more than three months before they submitted that appeal to ITS (paragraph 10.14), I am satisfied that the longer delay of almost five months between the hearing and ITS issuing the CSAT's direction was beyond their control. I therefore put that matter to the President of ITS and I am pleased to be able to pass on to Miss A the apologies which ITS have offered on his behalf for the fact that the tape of the proceedings of her hearing had been mislaid (paragraph 10.14). ITS also assured the Ombudsman that they have since revised their procedures for dealing with all post-hearing action so that such a situation should not be repeated.

10.21. Miss A also complained about CSA's failure to enforce the payment of CSM by Mr X once a valid MA had been made. However, I am satisfied that CSA did take steps to try to enforce payment by imposing a DEO on Mr X (paragraph 10.12) and, although I appreciate the additional frustration caused to Miss A by his employers' reluctance to co-operate, I do not consider that CSA can be held responsible for that while the need for them to contemplate taking further action against the employers was negated by Mr X agreeing to enter into a direct debit arrangement (paragraph 10.14).

10.22. What of compensation for Miss A? Although I criticise CSA for taking more than two years to decide to compensate her for the loss of CSM resulting from their failure to issue her with a fresh MAF when she asked for her case to be reopened (paragraph 10.11) and for the spurious grounds on which they initially rejected that claim (paragraph 10.12), I welcome the fact that they eventually made an ex gratia payment of £2,660.91 to Miss A in February 1998 (paragraph 10.16). I am satisfied that it was reasonable for CSA to base their calculation of the CSM which she had forgone on the assumption that 3 February 1995 would have been the effective date if they had issued a fresh MAF following her request for her case to be reopened (paragraph 10.7) as, not only was that the date on which they issued the invalid MEF but it would also have been within their operational three-month deadline (paragraph 10.3) from the date of receiving any MAF which Miss A might have completed on or after the day on which she asked for her case to be reopened. However, the Ombudsman's staff have for some time been concerned that the standard formula used by CSA to calculate the compensation payable in cases such as Miss A's does not necessarily reflect correctly the amounts of FamC actually received by a PWC and, in the context of other investigations by the Ombudsman, CSA had already agreed to look again at the basis for their calculations as part of a wider review of their special payments arrangements. When issuing their compensation decision to Miss A (paragraph 10.16), CSA had acknowledged that they may need to revisit it once that review had been completed and so I asked the Chief Executive whether the completion of that review had, in fact, led to any increase in the amount of compensation payable to Miss A including any additional interest that may be due. In response to that query, DSS told the Ombudsman's staff on 13 July 1998 that CSA had decided to make a further ex gratia payment of £3,214.95 to Miss A in recognition of the CSM which she had forgone, along with a further £438.13 as interest in recognition of the loss of use of that sum. The Chief Executive then subsequently confirmed to the Ombudsman that CSA had paid that additional sum of £3,653.08 to Miss A on 7 July 1998.

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Conclusion

10.23. Miss A has been poorly served by both CSA and ITS, although her problems have been compounded by the actions of Mr X and his employers. I regard the apologies of the then deputy Chief Executive of CSA and those made on behalf of the President of ITS, along with the payment by CSA of compensation totalling £6,313.99, to be a satisfactory outcome to an almost entirely justified complaint.

26 August 1998

Annex

Abbreviations used and their meaning

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Last updated: 26 April 2006