CSA cases can cost around £25,000 – difficult ones £40,000 or more.

31/1/2012 – (updated 22/03/12)

The Government body responsible for child maintenance has revealed the scale of the cost of administering some Child Support Agency (CSA) cases. A typical case requiring a variety of actions to ensure the payment of maintenance can cost up to around £25,000 over 18 years.

The estimate is based on the cost to the statutory maintenance service of chasing, collecting, and paying out child maintenance for a child from birth to adulthood. It includes everything from the cost of the initial calculation and tracing the non-resident parent’s employer, though to the time spent by caseworkers on calls to both parents and an employer. Additional to that were the procedures necessary to produce compliance, including the imposition of a deduction from earnings order on the non-resident parent’s salary. In the actual case on which the costings are based the non-resident parent eventually paid what they owed for their child, but the work involved in getting them to meet their financial responsibilities added up to a substantial cost to the taxpayer.

Internal management estimates show that when the case involves legal action, the cost to the public purse can jump significantly - by as much as fifty per cent. A ‘difficult’ case in the North West involving years of enforcement against a determinedly resistant parent cost the taxpayer around £40,000.

The wealthy businessman had avoided paying regular child maintenance for his two sons for more than 16 years. During a marathon legal battle the Agency was forced to deploy nearly all of the legal enforcement tools available to it including liability orders, third party debt orders and a charging order imposed on his home. In the end an order for the sale of the property finally compelled him to make a payment of £70,000.

None of the estimated costs in these examples include the added burden of the CSA’s inefficient computer systems, which are due to be replaced over the next few years.

The Cases

The case costings are based on two real CSA cases where sustained action was required to ensure compliance. The Government’s proposals for the reform of child maintenance are designed to eliminate from the system cases where parents have the potential to collaborate.

Case 1 was a case, where the non-resident parent (NRP) paid just under £3,000 in maintenance over 19 months. More than 50 hours staff time was devoted to managing the case, including time spent on the telephone to both parents, tracing and speaking to the NRP’s employer, the calculation of four separate maintenance assessments reflecting changes in his financial circumstances and dealing with a complaint by the parent with care (PWC) through their Member of Parliament. Additional costs were incurred through the setting up of a Deduction from Earnings Order and instructing bailiffs when the case fell into arrears. The estimated cost to the CSA over this period was approximately £2,000. Over 18 years, a similar typical case would cost the taxpayer up to around £25,000.

Case 2 was a ‘difficult’ case involving multiple legal actions including liability Orders and County Court judgements, two Charging Orders on the NRPs main home and, ultimately, an order for its sale – at which point the NRP volunteered a lump sum payment. The latter action alone cost the CSA almost £10,000. Total staff time and enforcement costs over 18 years – excluding external solicitor’s fees – amounted to around £40,000.

Editor’s notes

• Costs are management estimates only and are based on the staffing and non-staff costs (including infrastructure, estates, travel and pensions).They exclude costs for central services and IT. Costs are based on 2010/11 prices but applied to all years.
• The cost of enforcement action is based on the number of enforcement orders granted in the 2010/2011 reporting year, average court and legal fees. Enforcement costs are based on 2010/11 prices, but applied to all years.
• The Commission's Annual Report and Accounts for 2010/11 reported the cost of a case managed on the main computer systems as being around £350 a year, with a case managed off the main computer systems at £600 per year. There is however considerable variation from these averages at an individual case level, depending on the amount of enforcement action and intervention required and the method of processing, which is why some cases cost as much to administer as those referred to here.