Child Maintenance: Agree or you will pay a fee!

The government wants parents to agree their child maintenance agreements amicably or face a charge.

The rollout of the new Child Maintenance Service (CMS) officially began in December 2012 and this week more than 50,000 letters are being sent out to parents who currently pay and receive child maintenance through the old Child Support Agency (CSA).

The government says new CMS will use HM Revenue & Customs data to process applications and make payments more quickly than the old CSA service, thus preventing the build-up of arrears.

The new service will review the financial circumstances of the parent paying maintenance annually to ensure levels of payment are fair, accurate and up-to-date.

Ministers want to encourage parents to make a voluntary arrangement but if that is not possible, and the new CMS is used, then both parties will be charged.

This means that the paying parent, usually the father, will have a 20% fee added to the maintenance payment, while the receiving parent, usually the mother, will pay 4% to get the money.

The charges will be introduced later this year, and all single parents will be charged an upfront fee of £20 for registering with the new service.

Child maintenance is financial support that helps towards a child’s living costs when its parents have separated. If parents split, maintenance should be paid to the person who takes care of the child on a day-to-day basis.

The Government has said the changes were necessary as the old set-up was costly for taxpayers.

Why have there been updates to the system?

Under the old system many single parents used the CSA to sort out maintenance payments. Criticism of the old CSA system was that it took responsibility away from parents, encouraging conflict and hostility at huge expense to the taxpayer.

In an effort to improve the situation the new replacement “Child Maintenance Service” has been gradually rolled out, which the government said is designed to act as a backstop for parents having trouble.

However, there are concerns about the reforms. Whilst many parents can reach an amicable agreement, there are many who cannot and need the government’s help.

The maintenance is also for the child’s benefit but charges will reduce the amount a child will actually receive so that child’s needs may not be met as a result. It may also deter some parents from referring matters to the new CMS and that could result in another burden on the state as a result.

It also remains to be seen if this new system will be any less cumbersome than the old one; that arrears will not accrue and, very important, that enforcement measures for those parents who do not pay will be swift and effective.