By Hana Khodabocus On 30th June 2014, the Minister for Pensions, Steve Webb MP announced that charges would be introduced forthwith regarding applications made to the Child Maintenance Service (CMS). All new applications will incur a one-off fee of £20, although this will not be payable by victims of domestic abuse, residents of Northern Ireland and applicants aged less than 19 years old. Also, as from 11th August 2014, charges will be imposed on both parents using the CMS for collection.
This shall see the parent paying child maintenance having to pay an additional surcharge of 20% of the maintenance payable, and the parent receiving the maintenance recouping 4% less. For example, a parent, who prior to the new rules, paid £100 child maintenance, would have to pay £120.
Out of this, the parent receiving the maintenance would only receive £96. The balance of £26 would go towards the handling and administration costs of the CMS. The CMS operates two systems; ‘Direct Pay’ and ‘Collect and Pay’.
With Direct Pay, the payment of child maintenance is arranged directly between the parents, and none of the charges above will be incurred by either parent. If the paying parent starts to default on making payments, the CMS can then step in and collect arrears. Where parents are unable to agree on arrangements themselves, the ‘Collect and Pay’ option would allow the CMS to collect the child maintenance from the paying parent and forward it to the parent receiving maintenance. By opting to use this system, both parents would be liable to pay for the additional charges imposed by the CMS. Parents who had been using the Child Support Agency (CSA) to recover child maintenance will be informed in stages, from now until 2017, as to when their arrangement will come to an end.
They shall be given the choice between making a family-based arrangement and making an application to CMS, for which charges will be incurred. There has been much criticism of these new plans, which some say are punitive on the very parents who need help in receiving maintenance for children. However, there is optimism that these new plans will encourage parents to work together regarding their children and come to an amicable agreement relating to maintenance without any outside interference.
As always, the implementation of these plans will need to be monitored carefully so that it is clear how effective they really are for parents.