Recovery action
26. Mrs R complains that CMS has failed to secure consistent payments towards the arrears on the case since October 2019 and has done nothing since a sanctions order was granted in November 2024.
27. CMS states it issued an arrears warning letter in May 2022 and applied for a Liability Order in June 2022 which was granted in September. It states it instructed bailiffs to recover the debt but this was unsuccessful. CMS says it conducted an investigation in March 2023, including an ATP check, which found no evidence of sufficient means for repayment. It states that in November 2024, it obtained a sanctions order requiring the NRP to make monthly payments of £150 from December 2024. Finally, CMS states it has not pursued further enforcement actions due to the active sanctions order and the NRP’s ongoing appeal disputing the arrears.
28. Section 29 of the Act states that CMS has the legal authority to recover child maintenance arrears. These statutory powers include issuing payment warnings, obtaining Liability Orders, deducting payments directly from earnings or financial accounts, engaging bailiffs to recover funds, and applying to the courts for sanctions orders to enforce compliance. CMS is required to act within the scope of these powers to recover debts owed by non-resident parents (NRPs).
29. In this case, we can see that CMS has attempted to recover the arrears owed.
30. In May 2022, CMS issued an arrears warning letter to the NRP which appears to be the first recovery effort made. This was followed by a Liability Order application in June 2022 that was successfully granted in September. Following this approval, bailiffs were engaged to enforce recovery of the debt, but we can see from the records that this action proved unsuccessful.
31. CMS then undertook an ATP check in March 2023 which determined there was insufficient evidence that the NRP had the means to make full payments towards the arrears. Further investigative steps were taken, including placing the case under surveillance to identify any undeclared assets or income, but no additional evidence was obtained to support further immediate recovery measures.
32. Finally, in November 2024 CMS pursued further enforcement through the court system and obtained a sanctions order against the NRP. This order required the NRP to make monthly payments of £150 starting in December 2024.
33. Following the Court granting the sanctions order, CMS was no longer able to pursue additional enforcement actions for two reasons. Firstly, CMS cannot apply for a new Liability Order or initiate any further enforcement actions against the same debt while a sanctions order remains in effect. The judgment made by the court in granting the sanctions order takes precedence provided the NRP complies with the set payments. CMS says this is happening and that they should now be being split between the arrears on both cases.
34. The second reason further enforcement action was prevented is due to an appeal by the NRP. As the NRP is challenging a maintenance calculation, the arrears total remains under dispute. Any enforcement action relating to these arrears would likely be refused or delayed until the Tribunal appeal is resolved. CMS must await the Tribunal's decision before considering further recovery actions.
35. Having reviewed the evidence available, it appears that CMS has handled the arrears appropriately. While it was not successful in doing so, we can see that it has acted to try to recover the arrears, in line with the Act. We appreciate this process has been frustrating for Mrs R. Regarding an on-going action following the sanctions order, CMS is prevented from pursuing additional enforcement actions while an appeal remains ongoing. For these reasons, we see no indications anything has gone wrong, so we will take no further action.
Misleading information, changing position, and responses to NRP using company accounts as personal accounts
36. Mrs R complains that, since September 2022, CMS provided misleading and confusing information regarding what evidence it can accept relating to limited liability companies and it has regularly changed its position on what it can and cannot do to secure the arrears. She also complains that CMS has not provided any clarification or the relevant legislation explaining why CMS cannot consider the NRP using the company account as a personal account as evidence.
37. Section 56005 of the Guide explains that deduction orders can be applied to most UK bank or building society accounts. It goes on to clarify, though, the accounts where these orders do not apply and those include accounts used wholly or partly for business purposes (unless the NRP is a sole trader or a partner). These accounts are excluded from deduction orders as they are treated as separate legal entities and their funds are not considered personal assets of the NRP.
38. Our Principles set out how we expect organisations to act. In order to be open and accountable, we expect organisations to give people information and, if appropriate, advice that is ‘clear, accurate, complete, relevant, and timely'.
39. We can see from CMS’ interactions with Mrs R that the information it relied on was not always accurate and that its positions have changed over time. ICE highlighted this during its investigation as well and went on to make recommendations, something we will cover in more detail in the following section.
40. In particular, CMS misinformed Mrs R that limited company statements could be used if they were sourced directly from the bank, so not from Mrs R or another source. However, this was incorrect as set out Section 56005 of the Guide. Mrs R tried to clarify why this information was not being sought yet CMS do not appear to have ever provided the clarification on why that was the case. We see this would be upsetting and frustrating for Mrs R.
41. From what we can see in the evidence available, CMS changed its position on what it could and could not do to secure arrears. This was done in conjunction with the misleading information it provided about company accounts. This is an indication of maladministration.
Impact caused by CMS’s actions
42. When we identify something has gone wrong, we look to see if it had an impact on the complainant and whether the organisation has done anything to put this right. Mrs R says that the process has been incredibly upsetting and distressing for her and her family. Based on what we have seen, we find CMS’ poor service would likely be frustrating for Mrs R.
43. As mentioned before, ICE upheld this aspect of Mrs R’s complaint and made recommendations. It recommended that CMS apologise and issue a £100 consolatory payment in recognition of misleading her and the subsequent actions Mrs R had to take to try and get clarification. CMS ultimately accepted this and complied with the recommendations ICE made.
44. When making consolatory offers, DWP are expected to do so in line with the Redress Guide. This states that consolatory payments can be made to put right the impact caused by any failings it may have made. Consolatory payments are usually between £50 and £500 though it does have scope to go outside of these parameters if the individual circumstances of the case merit this. Section 5.9 of the Redress Guide states it is appropriate to consider the level of distress actually attributable to the maladministration itself when deciding on the amount of any consolatory payment.
45. The Redress Guide also covers apologies and when they may be appropriate. It states that apologies are essential to acknowledge failings and their impact and should be clear, personalised, and demonstrate accountability, complementing other forms of redress to ensure fair resolution.
46. In this case, Mrs R has described the process as incredibly upsetting and distressing for both herself and her family. We have no doubt that, overall, this has been her experience. We must consider the specific part of the complaint which we identified an error. This is the misinformation and changing position. We consider that the majority of the difficulty and upset Mrs R experienced relates to the significant arrears she is owed, and this is not something that we are attributing to CMS.
47. In this case, we consider that a consolatory payment of £100 falls within the range set out by the Guide and appropriately reflects the level of distress highlighted by these failings. The payment is consistent with the purpose of consolatory payments, recognising some inconvenience or upset while remaining proportionate to the minimal impact caused.
48. Additionally, the apology provided by CMS is complementary to the consolatory offer. The combination of a financial payment and an apology address the impact Mrs R experienced because of CMS’s failings and is in line with the Redress Guide. Therefore, while we recognise this has been a difficult period for Mrs R, we think enough has been done to put this right, and we will not consider it further.