New ideas for child maintenance
The Government has launched a consultation paper as to the calculation, collection and enforcement of child maintenance. The papers applies to both the Child Maintenance Service (CMS) and the old Child Support Agency (CSA).
The powers of the CMS have gradually been increased over the years and now for example allow the CMS to obtain information directly from HMRC and to disqualify from driving those parents who are in arrears with child maintenance.
The consultation paper also outlines proposals to deal with historic CSA arrears, most of which are owed on cases where the children are now adults.
The costs of collecting the old CSA arrears are high. It is believed that over 500,000 arrears only cases under the old CSA arrangement will still be in existence in 2018. The Government estimates that it will cost £30 million per annum to maintain these cases on the CSA computer system (£230 million to move the debt onto the new CMS computer system).
As a result the Government believes that it is no longer cost effective to pursue these arrears and whilst it is not yet intended that all the arrears will be written off, it is suggested that where arrears are over £500 (if the case is less than 10 years old) or £1,000 (if more than 10 years old) then the receiving parent will need to confirm that they want to pursue the debt but the CSA itself will decide whether enforcement action is reasonable. If enforcement action is deemed unreasonable then the amount will be written off.
As for CMS calculations, the consultation sets out provision to now take into account income from other sources such as foreign income or notional income from capital; what rate will be applied to the notional income, is part of the consultation process.
Finally, the consultation paper considers powers of enforcement of arrears under the CMS arrangement and possible:-
- Deductions from benefits;
- Deductions from joint bank accounts (previously joint bank accounts were exempt on the basis that it could not be identified whose money was whose in the said account);
- Deductions from business accounts of sole traders or partnerships (not deductions from limited company bank accounts) and;
- Removal of passports.
It is very evident that the government does not intend to fall into the mistakes of the past made by the Child Support Agency.
For further information about the government consultation go to www.gov.uk/government/new/clampdown-on-child-maintenance-cheats