201812.06

Child Maintenance – Proposals for Reform

Ever since the introduction of a system to collect child maintenance payments, initially under the scheme known as the Child Support Agency (or CSA), there has been a problem with the enforcement of these payments.

After 2013 all new applicants were transferred to a new scheme, the CMS (or Child Maintenance Service), with the hope that these existing issues would be ironed out, but still they persist.

According to statistics from the Department of Work and Pensions (DWP), only 57% of paying parents using the “Collect and Pay” service paid in full during the last quarter of 2017. A massive 63% of payments made through Collect and Pay were only made after enforcement action had been taken.

The government subsequently launched a consultation into the introduction of stronger methods of enforcement with the results being published in July 2018.

A summary of the consultation proposals are as follows:

  1. Removal of passports

The defaulting party would be required to complete a statement of income and expenditure and to come to a Court hearing with their passport. If the application was accepted the Court would be able to make any necessary Orders, which would include the cancellation of that party’s passport. Should the party fail to bring their passport to Court they would have 48 hours in which to comply.

  1. Deductions from Benefits

This will be used where the defaulting party has been assessed as liable for the “flat rate” of £7 per week. It was proposed that this would extend to deductions from Universal Credit where the household had an income and also to extend the deductions beyond the term of the maintenance liability in order to collect arrears.

  1. Deductions from Accounts

Deductions are currently made from accounts in a party’s sole name but proposals have been made to extend this to jointly held personal accounts first and then jointly held business accounts. However, deductions would not be made from business accounts where the balance was less than £2,000. It is proposed that the CMS will assume a proportionate share of the balance belongs to the defaulting party in accordance with the number of account holders.

In order to address concerns that innocent third parties could get caught up in this situation, the CMS will introduce robust checks of six months bank statements to establish the ownership of funds.

  1. New methods of calculation

Proposals have been made for the revival of previous variation conditions. A resident parent can apply for a variation if they believe the defaulting party has additional income, including unearned income in excess of £2,500 per annum. However in contrast under the previous scheme if a defaulting party was found to have a “lifestyle inconsistent with their income” or assets in excess of £65,000 this would constitute grounds for a variation.

  1. Extending the DWP’s Financial Investigations Unit (FIU)

Proposals have been made for the DWP to focus on parents who either seek to avoid disclosing the extent of their income or self-employed parents who seek to manipulate the figures to make it appear that they earn less than they do. It was also suggested that an HMRC investigations team should form part of this team because it was stated that “child maintenance cheats are often tax cheats too”.

Will these proposed reforms work in practice?

It is difficult to say whether some or all of the proposals will be effective, but for those resident parents who have struggled to receive the funds they are owed by the defaulting party, and often funds that they rely on to provide for their child or children, it is encouraging that these ongoing concerns have finally been listened to and the government is at least trying to do something about them.

About the writer:

Claire North is a qualified solicitor, a Family Law specialist and a member of Resolution. She works at Curwens Solicitors at their Hoddesdon office and she offers an initial consultation at a fixed fee of £75 + VAT. To make an appointment please call 01992 463727.

 From  3 to 21 December 2018 only Claire is offering 30 minutes of legal advice for free. Please call the above number to make an appointment quoting #coffeewithclaire.