More separated families have child maintenance arrangements

Last month the Department for Work and Pensions (‘DWP’) published its latest statistics relating to separated families and their child maintenance arrangements. The statistics say some interesting things about separated families in Great Britain.

Number of separated families

The first interesting statistic is just how many separated families there are in this country. The answer may come as a shock to some.

The statistics estimate that in the financial year ending 2020 there were 2.4 million separated families in Great Britain, including 3.6 million children in those separated families.

This figure gives an indication of the scale of the issue of relationship breakdown in this country, and the huge numbers of children who must cope with the separation of their parents, and all that that entails.

Child maintenance arrangements

Of course, from a financial point of view, one of the most important things for those children is that there is a proper child maintenance arrangement in place. As we will see, this can make a great difference to the child’s prospects.

The statistics tell us that in the financial year ending 2020, 56% of separated families had a child maintenance arrangement, 2 per cent more than in the financial year ending 2019. This may seem like a small increase, but it could mean that some 70,000 children are now living in families that are better off.

The increase was due to a 4 per cent rise in the number of separated families with a ‘statutory’ child maintenance arrangement, arranged with the Child Maintenance Service or its predecessor, the Child Support Agency. Other types of arrangements, such as voluntary (agreed) arrangements between parents and court orders for child maintenance, actually dropped by 2 per cent.

In total, 18 per cent of separated families had statutory arrangements, 38 per cent had non-statutory arrangements and, sadly, a huge 44 per cent had no arrangement.

The impact of child maintenance

The DWP estimates that on average £2.3 billion in child maintenance payments was received each year by parents with care of their children in separated families in the financial years ending 2018 to 2020. Around 70% of those payments related to non-statutory child maintenance arrangements, with around 30% relating to statutory arrangements.

Importantly, the statistics show that child maintenance payments reduced the number of children living in low income households. In the lowest income group (below 60% of median household income), 120,000 children were moved out of low income households due to the receipt of child maintenance. Most of this impact related to single parent families.

The last thing the statistics looked at was the income distribution of parents with care and non-resident parents, both before and after the payment of child maintenance.

The income distribution was separated into five ‘quintiles’, ranging from the first, representing the lowest 20 per cent of incomes, to the fifth, representing the highest 20 per cent.

The most striking thing about the income distribution is the difference between parents with care and non-resident parents, irrespective of the payment of child maintenance. Whereas there is a fairly even distribution across the five income quintiles for non-resident parents, the distribution for parents with care is severely skewed towards the lowest income quintiles, showing that separated parents looking after their children are, on average, very significantly worse off than non-resident parents.

After child maintenance has been paid the DWP estimates that the percentage of parents with care in the bottom quintile are 3 percentage points lower, and non-resident parents in the top quintile are 4 percentage points lower. They say that while child maintenance payments result in a rise in the proportion of non-resident parents in the lowest quintile to 27%, over a third (36%) of parents with care still remain in the lowest quintile, even after child maintenance is received.

The message from all of this is clear: child maintenance does make a difference, even if is not always as much as it should.