House of Lords - Reforming CMS

[LeanToWhatToDo]

Most of us have posted on threads with our own stories of CMS or it's previous body. I thought I'd post the update I had today as it affects so many of us. My own experience was being bullied out by CMS when they told me to get the minimum amount I had to have mediation with an abusive ex. Not had a penny since and he was literally paying the minimum amount anyway while freelancing as a specialist in London. I really hope things change for the next generation and for welfare reform in this country.

https://publications.parliament.uk/pa/ld5901/ldselect/pubserv/181/18102.htm

So in a nutshell seems like the recommendation is to scrap direct pay but to reduce the fees levied on collect and pay (which would be a good thing)

that there should be an overhaul of when CMS is calculated - ie not once a year relying on tax return statement from previous April

more robust legislation to collect arrears

update how it’s calculated

what I can’t see however is that other assets will be taken into account - like inheritance/savings etc? In my case my ex husband got a significant pay out from our divorce and now has zero incentive to work. Because he isn’t in work he’s not paying CMS….

Yes - quite a few loose ends not tied up.

The millions, like me, who were pushed out with threats of having to do face to face mediation still have no recourse and seems to be no way to get us back in to the fold. No wish to try and no remuneration.

I'm hoping they link it to the new ID cards somehow. Every ex male I know went self employed and hid assets before suddenly dropping income. They have to find a way to get these men to start fully contributing and not making their kids rely on the state while they dodge tax.

Self employment and the loopholes are mentioned as well as things likely hugely increasing pension contributions to reduce salary but as usual with so many government reviews - they acknowledge the problem but offer little solutions of how that might be addressed and little will to see actual change it would seem.

what will undoubtedly happen though is that the system of calculating based on number of nights will be changed as that would favour many errant fathers who can then claim they should pay less as they turn up for their Disney dad moments for a few hours before handing the child back before any real parenting is required

any real moves to improve things for the receiving parent will be little more than lip service and teeth less in its ability to make real change

Are they intending to stop sending out the repeated letters telling the RP about all the measures that 'can' be put in place to extract the owed monies from the NRP? I got an entire file full telling me that they could remove his driving licence, his passport, put an attachment to earnings etc etc. none of which they ever did. He's now retired, the kids are adults and he STILL owes me in the tens of thousands, but absolutely no comeback on him at all.

@Vroomfondleswaistcoat exactly no note of how often they use those measures on those leaflets from what I remember. I showed them my ex was jetting off all around the world for his job, yet he was declaring earnings of £9k pa. They should prosecute in those instances and work with HMRC to nail tax evasion.

The reality is that there are horror stories on both side when dealing with CMS. The situation is that politicians voted through the original legislation assuming it would just be “a good thing” not realising how many ways it could go wrong.

It is likely that it should not be stand alone entity, it is likely that there needs to be a very cold hard evaluation of the situation and be wiling to adapt the design. It is likely it will need to rely upon HMRC data at source, both as lying to them is a crime but also you avoid some of the horror stories where CMS has failed to understand businesses. A lot could be computerised and then give either side the right to appeal.

The issue is that any system will have errors and even when there are not errors you will have people upset thinking they are disadvantaged. The problem is that it starts from such a low base.

I still think the solution is for the government to pay resident parents directly and claw it back from the NRP. They will be much more motivated to make sure it happens - HMRC is way more effective at getting what they're owed than CMS.

Your problem here is that it may be legitimate taxable earnings. I knew someone who did earn very little for several years while jetting about, after several years they had built a business where they now earn very well, but there were several years when people would have assumed they were high earning but actually earning less than everyone they knew.

Often what is complained about is people not maximising earnings (we really don’t want a system that tries to do that), rather than being able to effectively hide income. It is not possible to know the circumstance you describe. But if someone was really declaring income below the tax allowance and living a life of luxury it is very likely HMRC would have opened a case if they were reported. They don’t like to let those chances pass. It may have been your ex may have been taking the situation of forgoing earnings in the near term to allow himself to benefit later, but where they try and impute an earning you end up with terrible outcomes.

Abolishing CMS and having a system feeding off HMRC data would be better, but don’t assume it would be a panacea. For a start the explosion in the tax rules since 1997 may well make the situation even more complex and opaque and you will still get dissatisfied people on each side (a lot of dissatisfaction is where reality differs from what people think is the case).

That said HMRC will be better at correctly calculating certain aspects, they also can be reviewed in a more transparent manner than CMS. They will have better live data for businesses.

I don't assume it'd be a panacea. I do think it would be better.

And, of course, involving HMRC won't help all those whose NRP promptly goes self employed and doesn't declare cash in hand work, or who gives up their job and works entirely 'off the books'

Ah no, in this situation he was relatively famous in his field already and had been in that career for some time. He just went freelance and took over 70k off his earnings...obvious to everyone apart from CMS and HMRC apparently! I did send them his website and what he was working on, the car he bought very publicly online as "proof" but they weren't interested.

Many trades do cash in hand work too, most now specifically request it. HMRC never seem to care about them although they earn more than most with £150-300ph quotes!

I think they jump to the conclusion that the men claiming they are low earners are honest, without actually having any verification - no one visits their house or checks they aren't driving a Ferrari, no one looks on their social media to see how many holidays someone earning minimum wage goes on all year round, etc.