The Minister for Pensions, Steve Webb MP, has this week announced the introduction of charges for people applying to the Child Maintenance Service.
All new applicants to the Child Maintenance Service from 30 June 2014 will be charged a one-off application fee of £20.
This application fee will not apply to clients who
- are a victim of domestic violence and have reported this to an appropriate person or organisation, including a solicitor
- are residents of Northern Ireland or
- are aged under 19.
From 11 August 2014 collection charges will be charged to both parents in relation to all cases in the Child Maintenance Service Collect and Pay system on or after that date.
The charges will be 4% deducted from the child maintenance payments received by the parent with care and 20% added on to the child maintenance liability for the non-resident parent.
The Child Maintenance Service will be writing to all CMS clients (around 120,000 cases) advising them of the introduction of collection charges from 11 August 2014 and flagging up the free Direct Pay option and how to apply for this (or, in the case of parents with care, how to express an option to stick with Collect and Pay if they still want this).
Existing clients already within the Collect and Pay system have ‘a choice’ or ‘a cooling off period’ to allow them to avoid paying collection charges from 11 August 2014. They can decide whether to continue using the Collect and Pay system and be charged, or to avoid the collection fee by either working out arrangements between themselves or using the free Direct Pay system.
CMS Non-resident parents with arrears (but no enforcement action as yet) will be given until 5 August 2014 to clear their arrears. If they do so, they will be able to opt for a Direct Pay arrangement.
Enforcement charges against paying parents will apply within the Child Maintenance Service taken on or after 30 June 2014, where the Child Maintenance Service has to take enforcement action against non-payers in the Collect and Pay system.
These charges will not apply to existing enforcement action taken prior to 30 June 2014.
Ian Taylor, Family Partner at Coodes commented “This is a move which has been long anticipated as the former CSA (now the CMS) has been losing money for some time. Sadly it may mean that some parents suffer further financial hardship as effectively they are now having to pay the Government to calculate and collect child maintenance. It is all the more pressing therefore that separating parents try to resolve matters including child maintenance between themselves or with the help of a solicitor or mediator who can advise them about preparing a ‘Parenting Plan'”.