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03 JUL 2014

Child Maintenance Service fees and charges introduced

Child Maintenance Service fees and charges introduced

On 30 June 2014 a system of collection charges and fees are being levied for people applying to the Child Maintenance Service for assistance with claiming child maintenance. Some fees will be applicable immediately, and some are due to come into effect on 11 August 2014.

All new applicants to the Child Maintenance Service (CMS) from 30 June 2014 will be charged a one-off application fee of £20. There are certain exemptions to this fee; it will not apply to applicants who are a victim of domestic violence and have reported this to an appropriate person or organisation, are residents of Northern Ireland or are aged under 19. There is a list of the appropriate agencies to whom a domestic violence report can have been made at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/261882/child-support-fees-who-to-report-domestic-violence-to.pdf

Direct Pay or Collect and Pay

Applicants to the CMS will receive a calculation of the amount of child maintenance to be paid. The parents can then either arrange for payment to be made between themselves, from the paying parent to the parent with care, known as 'Direct Pay', or can ask the CMS to collect child maintenance from the paying parent and forward it to the receiving parent, known as the 'Collect and Pay' system.

Other than the one-off application fee, there are no further charges using the Direct Pay method.

From 11 August 2014, parents using the Collect and Pay system will face charges. Charges are to be paid by both parents, and will be applied to all cases in the CMS system on or after 11 August.

The parent with care will have 4% deducted from the child maintenance payments received and the non-resident parent will have 20% added on to their child maintenance liability.

A statement released by the Department for Work and Pensions states that the CMS is writing to all their clients giving them six weeks’ notice that they will be charged if they are using the Collect and Pay system. It is understood that around 120,000 cases are currently being dealt with by the CMS.

One of the aims of the six weeks’ notice is to give parents under the Collect and Pay system the opportunity to avoid the collection fees by moving to Direct Pay or by sorting out arrangements for maintenance directly between themselves (called 'family based arrangements'). Either parent can choose Direct Pay, without needing the other parent’s agreement, although if the CMS has cause to believe that the paying parent may miss payments they might not be able to use this method. Historical missed payments, notably within the previous six months, could also be a reason for refusal. Paying parents who have missed payments in the past, but are not yet subject to any enforcement action, are advised to clear all arrears of child maintenance by 5 August 2014 if they wish to persuade the CMS that they should be able to move to Direct Pay.

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There are also a range of enforcement charges for paying parents who fail to pay their child maintenance in full and on time which will apply for all new enforcement actions started from 30 June 2014. These charges are:

  • Liability order £300
  • Lump sum deduction order £200
  • Regular deduction order £50
  • Deduction from earnings request or order £50

CMS Toolkit

The DWP has created a Child Maintenance Service toolkit http://www.cmoptions.org/stakeholdertoolkit/index.asp which provides practitioners and other organisations who support child maintenance clients with information about the service and the changes taking place. This includes information about the CMS fees and charges, as well as information about the termination of the Child Support Agency (CSA) arrangements. The toolkit also includes factsheets, leaflets and examples of the letters being sent to clients.

From the 30 June, the DWP have also been writing to CSA clients about ending their current child maintenance arrangements. All affected parents will be contacted between now and 2017 to give them notice that their arrangement will end. The guidance states that clients will get six months’ notice of the closure. CSA clients will be offered support from Child Maintenance Options to put a new arrangement in place to replace the CSA arrangements. These options are to make a family-based arrangement or to make an application to the Child Maintenance Service, and subsequently to use either the Direct Pay or the Collect and Pay system.

Gingerbread, the single parent advice and support service, has raised concerns that these fees might deter parents from making an application for child maintenance. Gingerbread Chief Executive Fiona Weir said:

'While it’s great if parents can make their own arrangements for child maintenance, we know that this can prove difficult for many. We fear that the new charges and the government’s blinkered focus on private arrangements could deter many single parents from getting the help they need to sort out child maintenance and that children will lose out.'

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