DWP child maintenance accounts qualified

16 Dec 15

Auditor general Amyas Morse has issued a qualified opinion on the 2014/15 accounts of the Department for Work and Pensions’ Client Funds Accounts, which cover statutory child maintenance schemes.

Morse concluded there were material errors in the calculations of child maintenance assessments, which determine child maintenance payments.

He also issued an adverse opinion on the truth and fairness of outstanding maintenance arrears of two previous child maintenance schemes, which were established in 1993 and 2003. These were replaced by a new scheme in 2012.

Morse noted that DWP was currently closing all the cases on the 1993 and 2003 schemes and inviting claimants to apply under the 2012 scheme rules. The department is already reporting improved levels of accuracy in the 2012 scheme as compared with the same stage for the 1993 and 2003 schemes, with cases assessed under the 2012 scheme using an automated system that DWP believes will enhance accuracy.

Arrears across the child support schemes are estimated to stand at £3.96bn since the Child Support Agency was established in 1993, although auditors said they do not believe this represents a true and fair view because of the level of error in the underlying case data.
The arrears accumulated under the 1993 and 2003 schemes will not transfer to the 2012 scheme accounts. They are therefore likely to remain in the 1993 and 2003 scheme account for a long period of time, while there are no current plans to address these, Morse stated.
This year DWP reported the 2012 scheme separately from the 1993 and 2003 schemes.

In 2014/15, DWP received £756.6m in respect of child maintenance from non-resident parents assessed under the 1993 and 2003 schemes. The NAO has estimated that errors in assessments result in overpayments of child maintenance amounting to £4.2m (0.54% of receipts) and underpayments totalling £6.5m (0.85%).

Under the 2012 scheme, the department received £25.7m in respect of child maintenance from non-resident parents in the year. This is estimated to include overpayments of child maintenance amounting to £305,000 (1.19% of receipts) and underpayments totalling £295,000 (1.15%).

Responding to the qualification, a DWP spokesman said: “The 2012 Child Maintenance scheme introduced a whole new set of rules and technologies to reform child maintenance. Claims are now being processed to a higher level of accuracy than under the previous schemes after two years in operation.

“These qualifications relate primarily to the older 1993 and 2003 schemes which we are winding down.”

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