11. In January 2019, CMS told Mr A an issue with his account meant the CMS system wrongly showed he owed arrears. CMS said the root cause was a computer error that meant the 2018 annual review did not go through.
12. The annual review is when CMS checks it has the right income for the paying parent, and lets the paying and receiving parents know how much should be paid each month. It happens each year, on the anniversary of the date from which the paying parent had to start paying. For Mr A, this was in July.
13. In January 2019 CMS told Mr A it would investigate and correct the problem it had found, but he continued to see problems with his account each time CMS checked what he needed to pay in the years that followed.
14. Below we consider what the evidence we have in CMS’ computer records and in what Mr A shared with us shows, and where CMS got things wrong. To decide whether CMS got things wrong, we consider whether the evidence and relevant guidance shows it did not do what it should have.
Discussions in January 2019
15. CMS calculated Mr A should increase his monthly payments, from £168.97 to £190.40, at the annual review in July 2018. However it did not write to Mr A or the receiving parent to tell them this.
16. The annual review is an automated process. The CMS computer system receives the latest full year income figure from HMRC and where there is nothing else it needs to check, it automatically issues a new calculation and payment plan. This is what should have happened in Mr A’s case, but did not happen. An error with CMS’ computer system meant his case did not update when it should have.
17. CMS’ Client Charter says it will tell people what is happening with their case and give them the right information. The computer error that meant it did not issue the annual review in July 2018 mean CMS failed to meet that standard.
18. The first issue this caused was that Mr A did not know he needed to increase his maintenance payment by £21.43 a month. This meant he was unknowingly underpaying, so a relatively small amount of arrears would eventually build up on his case. However this never became a problem because CMS later asked Mr A to increase his payments, albeit for the wrong reason.
19. The second issue caused by the annual review not being completed was that the system stopped accounting for the payments Mr A was making. The CMS system would usually treat the expected payments as having been made and automatically add these to its account of payments made and owed. It refers to this as auto-satisfying, and unless told otherwise this is what happened when a paying parent makes direct payments, as Mr A was. In this instance the CMS system recorded the payment owed, but failed to auto-satisfy payments. This added much larger arrears than were realistic to his account.
20. Because the CMS system was assuming Mr A was not paying, in January 2019 CMS wrote to Mr A asking him to double his monthly payments to bring his account up to date. It wrongly told him he was £1,798.20 in arrears. It asked that he increase his monthly payment to £325.11.
21. Mr A called CMS in response to that letter, and CMS’ note of that call shows he was ‘alarmed’ to be told he must increase his payments when he had been paying as instructed and there was no good reason why his payments should increase.
22. CMS could see that something may have gone wrong, because payments were not being auto-satisfied on the CMS system. It could not immediately explain what the problem was, but told Mr A to continue making the same monthly payment while it investigated what had gone wrong on its system.
23. CMS followed this up with a call to explain the annual review had ‘failed to run a new payment schedule’ in July 2018, and this would be corrected and he should expect further updates. Mr A was told it may take four weeks for CMS to correct the problems on his account.
24. At this point, CMS could see something was wrong but unfortunately no further action was taken. CMS knew there was a problem with Mr A’s account, it could correct this problem, and it told Mr A it would correct it. CMS did not do this.
25. CMS’ Client Charter says it will sort out any issues as quickly as it can and do what it says it will. CMS failed to act in line with its Charter when it did not resolve the problems it had identified in January 2019.
July 2019 annual review
26. At the next annual review, in July 2019, the CMS system did successfully complete the annual review, and said Mr A needed to pay £186.36 a month. It told Mr A he had arrears of £510.76.
27. In August 2019, the receiving parent told CMS she had been expecting Mr A to make payments of £325.11.
28. This is the figure calculated by CMS in January 2019 on the basis of CMS’ system wrongly recording payments had not been made, for the reasons we explained in paragraph 18. Because CMS had not resolved those problems as it said it would, that figure had appeared in the most recent payment plan.
29. When CMS called Mr A about this, he told them there had been a mistake on his system and it had been agreed he did not need to pay £325.11 a month. CMS noted his view was that ‘arrears were incorrectly added to the account on top of the maintenance calculation, making it higher’. He told CMS he was upset at CMS’ handling of the case, and the arrears it now said he owed were also incorrect.
30. CMS looked back at its notes from January 2019 and could see a problem with the 2018 annual review meant CMS were going to recalculate what he needed to pay, but this was not done. Despite this, CMS concluded that the payment schedule it had issued in January 2019, which had prompted CMS to decide there were problems that needed to be fixed, was correct to say Mr A needed to pay £325.11 a month.
31. While trying to correct things for Mr A at this point in August 2019, CMS misunderstood what had happened in the past. This led to it making the wrong decision about his arrears. CMS could see the previous calculations had arisen due to an error but still concluded those calculations were correct, and said there was a shortfall in his payments and this had to be added to his account as arrears. This was incorrect, and contrary to CMS’ Client Charter which says people will be given the right information.
32. The evidence we have suggests Mr A would have had some arrears at this point, and CMS may have needed to factor this into payment plans.
33. This is because the CMS system calculated his monthly payment should go up by £21.43 between August 2018 to July 2019, but because Mr A was never told this he paid £21.43 less than he should each month. Over a year, this would have created around £250 arrears. But CMS calculated that he had arrears of £1,814.18 and we see no evidence to support that calculation.
34. At this point Mr A also told CMS he wanted to complain about what was happening with his account and asked it to send an account breakdown. CMS handles complaints as a ‘dissatisfaction’ first of all, and it closed his dissatisfaction in August when it decided his account was up to date.
35. Although Mr A asked CMS to look at this is a complaint, as he thought they were making a mistake and wanted to be able to pursue his concerns to the Independent Case Examiner, CMS did not escalate his complaint. It also did not look again at whether it was making a mistake in the way he claimed.
36. CMS Client Charter says it will be responsive, sort out any issues and use feedback to improve its work. CMS did not take any action regarding the complaint when it needed to do so in 2019, in line with its Client Charter.
July 2020 annual review
37. There were no further actions of note until the 2020 annual review.
38. Mr A was told his annual review had been completed on 10 July 2020, and he would have to continue making payments of around £240 a month and still had arrears of £1,449.57, despite being asked to pay approximately £35 towards his arrears for the past year. This again prompted Mr A to question CMS’ accounting.
39. Due to the worry these arrears were causing him, Mr A proactively tried to resolve the problems on his case. He looked at the payments recorded in CMS’ online portal and, because he could see payments he had made were missing, got copies of his bank statements and sent these to CMS in October 2020.
40. Mr A told CMS his calculations showed he had paid £1,500 more than shown in the CMS account and said
‘I’m really upset this has caused me massive distress and affected my mental health. I have been trying to advise you that these plans were wrong for 3 years. I want a letter sending detailing why this happened please.’
41. When CMS received Mr A’s bank statements, it told him it would look into this and expected it to take around 6 weeks to get back to him. It decided an account breakdown needed to be completed. It told him if there were errors on the case they would be rectified, and noted there was a gap in its payment record despite the evidence showing those payments were actually made.
42. Before the end of October 2020, CMS called Mr A and told him the account breakdown had been completed, and showed he had actually overpaid £288.24. CMS told him he should reduce his monthly payment to £80.06 for the next ten months.
43. CMS records show it made this calculation by dividing the overpayment of £288.24 by ten, to get £28.82. It then deducted £28.28 from Mr A’s monthly liability.
44. However CMS deducted £28.28 from a monthly liability of £108.88 to reach a figure of £80.06. His actual monthly liability at that point was not £108.88, it was £190.67. CMS should have told Mr A he needed to pay £162.39.
45. The CMS Client Charter says CMS should give people the right information and, as it used the wrong figure in its calculations, CMS failed to give Mr A the information about what he needed to pay from October 2020.
46. In October 2020, CMS had again looked at the gaps in its account of how much Mr A had paid. It had taken action to address how much he was being asked to pay until his next annual review. However it had not taken action to actually correct its accounts. This meant that, when the CMS system got to the next annual review, it would again treat Mr A as though he had not paid what he should have in 2018/19. The problem we discussed in paragraph 16 above had now been investigated by CMS on three different occasions, without it actually being resolved.
July 2021 annual review
47. When it completed the annual review in July 2021, CMS told Mr A he had arrears of £857.16.
48. Mr A would have had significant arrears at this point, because the payments CMS instructed him to make from November 2020 were £90 too low. However that underpayment does not seem to have been recorded in the CMS accounts at this point, as CMS had not updated its accounts to reflect what it expected to happen in November 2020. Instead, these arrears seem to be a result of the still unresolved problem we described earlier in this report.
49. CMS’ Client Charter says it will give people the right information. The problems on Mr A’s account meant CMS failed to meet that standard when it sent the July 2021 annual review.
50. After receiving the annual review in July 2021, Mr A called CMS and told them he was expecting the arrears to have been cleared, and asked that they do an account breakdown to ensure what they were asking him to pay was correct. He said he was stressed because the receiving parent would now expect him to pay £253.23 a month in line with what CMS had calculated, even though he was confident CMS were asking him to pay too much.
51. CMS agreed it would request an account breakdown. It told him his monthly liability without arrears was £202.10 and he would need to at least pay that. Mr A called in September to chase up the account breakdown. CMS told him this should be sent to him soon, and CMS noted that he told them he was paying the £202.10 it had asked him to pay.
52. CMS would have needed to review his case at this point to work out what was happening. We note there were times when CMS quickly identified something was wrong in earlier calls, but his case was getting increasingly complicated and there was no longer anything to clearly show what had gone wrong.
53. Shortly after Mr A spoke with CMS in September 2021, the receiving parent told CMS she was not getting the payments she expected and asked for the case to be changed to collect and pay. In November 2021 CMS decided to apply a deduction of earnings order.
54. CMS would usually want to change to collect and pay first, as this is the first step in its enforcement process. Collect and pay requires payments to be made via CMS, instead of direct to the receiving parent, so CMS can monitor that the right payments are being made and on time. But where CMS does not think collect and pay will be successful, it can go straight to a deduction of earnings and instruct a person’s employer to make payments direct to them.
55. Looking at CMS’ records, it is difficult to understand why it decided it needed to take enforcement action at all. There is no evidence this was necessary on Mr A’s case, or that it was made based on appropriate consideration of the evidence.
56. CMS noted that it had contacted Mr A to ask him to make up the missing payments and had received no response, and this meant a deduction from earnings order was reasonable.
57. However we found no evidence CMS had contacted Mr A about missed payments at this time. If it had let him know about this, it may have established that no enforcement action was required. It also does not seem to have checked the discussions Mr A had been having with CMS and seen he had told them the payments he was making. Our Principles of Good Administration say organisations should make reasonable, evidence-based decisions and CMS do not seem to have followed that principle when it changed the service type.
58. When CMS implemented the change to a deduction of earnings order, it told Mr A he had arrears of £4,422.90. Because of this, it applied for a deduction of earnings order for £777.40.
59. Looking at the CMS records, it is unclear how it came to these figures, and there is nothing to suggest Mr A might have such large arrears. The deduction from earnings order appears to have been implemented using a set of figures that were wholly unrelated to what was actually happening on Mr A’s account, and this was another instance where CMS did not act in line with our Principles of Good Administration.
60. Mr A contacted CMS upset and confused about why it had asked his employer to deduct £777.40 a month from his salary and had asked him no questions about his payments before doing so. CMS looked through their records and agreed something had gone wrong. They were able to cancel the deduction of earnings order before anything was taken from his salary. CMS asked Mr A to continue with the direct payments he had been making, and said it would do further checks and send an account breakdown.
Correcting Mr A’s account
61. At this point, after cancelling a deduction of earnings order it had wrongly imposed, CMS began the process of successfully correcting the issues on his account.
62. We can see and understand why Mr A was frustrated by the time taken to check his account, given the circumstances.
63. He first requested an account breakdown on 14 July 2021. In November and December, he contacted CMS to chase this up, and his emails show he was frustrated at the time it was taking to check his account. It was at this point that he asked his MP if they could assist him. CMS sent an account breakdown on 2 February 2022.
64. CMS told him he should expect it to take 8-10 weeks to provide the account breakdown, and did not meet that timeframe. It has not explained why it could not meet that timeframe, but we can see it told him how long it was expected to take.
65. We know from our work looking at other CMS cases that CMS will often need longer to do this, due to the number of requests it receives. Considering everything we know, we are not able to say the time it took to produce this account breakdown was a failing. We would say this was a failing if there was an avoidable delay, but the evidence does not tell us there was an avoidable delay in this instance.
66. Mr A was also frustrated that after he sent copies of his bank statements in November 2021, CMS asked him to send in his bank statements in again. We recognise this would be frustrating, but it is not something we could say is so serious it would be a failing.
67. He was also frustrated that, in the account breakdown CMS sent him on 2 February 2022, he could identify numerous things that needed to change.
68. We recognise that CMS shares account statements so people can check it has got things right, and expects to consider any issues a person may highlight with their account. It looked at what Mr A said and made the necessary corrections.
69. However it does appear as though, by this point, CMS could have gone further in correcting his account and, in the circumstance, we can appreciate Mr A was frustrated by the inaccuracies he could see.
70. The breakdown CMS sent in February 2022 still showed charges added when CMS applied a DEO, which CMS had said would be removed in November 2021. Mr A had already sent bank statements demonstrating CMS were underestimating how much he had paid. CMS’ Client Charter says it will give people the right information, and it appears it failed to do this when it shared the account breakdown.
71. However the account breakdown and the discussions that followed did lead to CMS making the changes it needed to make so that Mr A’s account contained an accurate record of the payments made, and he could expect to see no unexpected arrears in his future payment plans. CMS sent a revised account breakdown in May 2022 and the following month Mr A confirmed he was happy with this.
72. Mr A’s communication with CMS during this period shows he was upset and frustrated. We think this is understandable, and it would have helped him if CMS could address things more quickly.
73. CMS took six months to complete the corrections on Mr A’s account. It appears it may have been able to do this quicker, if it had reviewed the evidence he had sent in November 2021 before sending him an account breakdown in February 2022.
74. But CMS would always have needed to do a substantial piece of work to correct his account, because it had not corrected the problems earlier and added to the complexity by making additional mistakes. The distress Mr A had at this point, and all the additional work CMS needed to do, could have been avoided if CMS had taken earlier opportunities to put things right.
The impact of CMS’ errors on Mr A
75. We found a number of errors and a recurring pattern of problems with Mr A’s account. This had a cumulative impact on him.
76. As set out above, CMS got things wrong when
• A computer error meant the July 2018 annual review did not go through • This created accounting errors, and meant CMS wrongly told Mr A he was in arrears • When CMS identified there was an account error in January 2019 and it had wrongly told Mr A he owed arrears, it did not fix that error • CMS looked at the accounting error again in August 2019. When it should have recognised it still needed fixing, it decided the inaccurate calculations the system had made as a result of this error should be treated as correct and incorrectly asked Mr A to increase what he paid • When, in August 2019, Mr A asked CMS to look at his complaint about the errors on his account, it took no action to look at his concerns. Involving the complaint team may have led to the accounting errors being resolved • In August 2019, CMS told Mr A it would send an account breakdown, but did not do this • CMS looked at the accounting error again in October 2020. It still did not correct his account. It could now see Mr A had been asked to pay too much but, when trying to put this right, created further arrears by asking him to pay around half of what he needed to pay each month • After giving an incorrect figure of around £800 arrears at the annual review in July 2021, CMS wrongly applied a deduction from earnings order in November 2011, and did so quoting large arrears of over £4000 and asking for substantial payments of £700 a month. Those figures seem to bear no relation to Mr A’s account • It asked Mr A for evidence of the payments he had made, but did not use that evidence to update his account so sent him an inaccurate account breakdown in February 2022
77. The issues Mr A faced are mainly a direct result of the computer error that meant the July 2018 annual review was not completed. Whether directly or indirectly, all the things that went wrong on Mr A’s case follow from this error.
78. For instance, CMS applied a deduction from earnings order in November 2021 when a brief check of what had been happening on his account would have shown that was not the right thing to do. This happened because a CMS caseworker did not check the history of the case, however CMS was only looking at a change of service type because the receiving parent requested it because she thought Mr A’s payments should be higher. The receiving parent thought his payments should be higher because the accounting error that came up in July 2018 had not been resolved.
79. Mr A brought his complaint to us because he does not think CMS has done enough to put right the impact this had on him. He complained CMS’ errors had such a significant impact on his mental health that he had to leave his job and was out of work for more than a year.
80. CMS’ records show Mr A reported being signed off work in February 2022 and said he may not be able to return. He told CMS this was because of his mental health. Unfortunately he did have to leave his job in March 2023.
81. This was not the first time he mentioned how CMS’ actions were having an impact on him, and he specifically referenced having anxiety disorder in earlier calls. Mr A also told CMS the problems with his account were affecting his mental health in September and October 2020, and in August 2019 CMS noted he was upset by the issues they were discussing.
82. As the causes of mental health problems are always complex and multifactorial and having considered all the evidence Mr A shared with us, we do not think we can say CMS’ actions had such a profound impact on him that he had to take a year out of work.
83. It is clear he had worked consistently until 2022 and did then take over a year out of work. But we are not persuaded we have evidence to show CMS were mainly responsible for either for Mr A having to stop work in the first place, or for how long it took for Mr A to be able to return to work.
84. To make that finding, we would need to be able to say it is likely Mr A would have continued work if not for what happened with CMS. Based on the evidence we have reviewed in drafting these provisional views, including Mr A’s personal information which would not be appropriate to summarise here, we are not in a position to say that.
85. However the evidence we have does show Mr A being upset, distressed, anxious and frustrated at different times in his dealings with CMS. We can see this in CMS records, such as when he sent them emails to say how distressing the ongoing issues were. We consider it is understandable that a person would be distressed by what happened and having a diagnosis of anxiety disorder shows us why the impact on Mr A’s wellbeing was significant.
86. We note in particular that, in July 2021, Mr A told CMS he was worried about what would happen when the arrears it was adding to his account would prompt the receiving parent to tell CMS he was not paying enough. As the receiving parent did then report he was not paying enough as he expected, and CMS did not handle that report appropriately, it is understandable that he would experience that as extremely poor service.
87. These events had a significant impact on Mr A and more needs to be done to recognise and put right that impact.
88. At the end of this report, we make recommendations for what CMS should do to put things right. Mr A wanted CMS to improve its service. We do not recommend service improvements and would like to explain why.
89. We do not think errors like the one that started the difficulties Mr A had, can be avoided in large and complex computer systems. We recognise large and complex computer systems such as CMS relies on are not always reliable.
90. The problem for Mr A was that, despite a system error being identified quite quickly, CMS did not put this right. This was a poor service for CMS to provide, and we consider human error was behind this poor service. CMS had opportunities to put things right, but only did so after there had been a series of errors and the problem had become more complicated, and more upsetting for Mr A. We do not see there are systemic recommendations we can make to address this.
91. Mr A specifically said CMS should do additional checks when a receiving parent reports missed payments. He said this was needed to prevent CMS wrongly applying a deduction of earnings order, as happened in his case, and said it is unfair that paying parents are asked to show they have made payments instead of receiving parents showing they have not received a payment.
92. We do not think this is something CMS needs to improve because its process already requires it to make evidence-based decisions when asked to change payment type. CMS should not have changed service type in Mr A’s case because it had information on its system showing he was making the right payments. There were a number of instances when CMS was asked to change service type and decided not to, without contacting Mr A, because it could see from the history of his case that changing payment type would be wrong.
93. We also note it would be more difficult for a receiving parent to show a payment has not been made than for a paying parent to show it had. A receiving parent could send a statement showing no maintenance payments, when a payment had been made but into a different bank account. As such, CMS would view evidence a payment had been made as more reliable than evidence it had not been made.
94. CMS offered to pay Mr A £250. He has so far declined that offer. Based on what we have considered above, we should partly uphold this complaint because we do not think CMS has done enough to consider the impact of its poor service and put things right.