Child Maintenance Service changes to hit families in need

The Department for Work and Pensions has proposed plans to implement regulations that will enable the Child Maintenance Service (CMS) and the Child Support Agency to share information about client’s payment records with credit reference agencies.  This comes as another potential blow to families using the CMS, as only a few months ago new charges were introduced for families using their payment system.  Sam Miles, Family Partner, explains here what this means for those in this situation, and advises on the best path for parents.

“On 11th August this year, the CMS Collect and Pay system brought in new charges for every case using their facility,” begins Sam.  “These charges are calculated as 4% deducted from the maintenance payment that goes to the parent looking after the child in their care, and 20% added to the maintenance liability for the non-resident parent.  There will also be a £20 fee for any parent wishing to open a new case with the CMS.

“Statements from the Department for Work and Pensions indicate that these charges are an attempt to encourage collaboration between parents, so taking the child’s best interests into consideration,” continues Sam.  “One other reason is of course that these charges will contribute towards to running of the CMS itself.  However, these charges will have a tremendous impact on families who are already struggling with their finances.  120,000 people have been effected, and to say that these charges are in the best interests of the children is naive.  The more likely scenario is that people will stop using the CMS, but the reason they are using them is because previous attempts to come to an agreement between parents themselves have failed.  This will lead to many children not receiving maintenance payments at all, something that the Government themselves have forecasted.”

Not only have these charges begun to have an impact on the finances of parents around the UK, but future plans could also have a knock-on effect on other areas of their lives.  Sam explains, “The DWP have proposed plans for the CMS to be able to share with credit reference agencies the payment records of their clients, in particular if they have missed payments.  This means the parent in question will have their chances of being approved for credit diminished, effecting their likelihood to be able to take out credit cards, loans, mobile phone contracts and mortgages for example.  The aim of this measure is to attempt to deter those trying to evade maintenance payments, but this has the possibility to again lead to parents not using the CMS, and the danger of those important payments not reaching the children.”

These Regulations are due to be laid before Parliament in March 2015 and come into force by the end of the same month.

Sam concludes, “We would always recommend that parents try to reach an agreement themselves when it comes to child maintenance payments.  If this is becoming difficult then Mediation could be an option to come to an arrangement that both parents are happy with.”

For more information on how Warner Goodman LLP can help your family, contact Sam Miles or the rest of the team on 02380 717431 or visit their section of the website here.

ENDS

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