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Almost a million parents to be hit by major change to child maintenance payments

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HUNDREDS of thousands of parents could be hit by a major change to child maintenance payments.

The Department for Work and Pensions (DWP) is planning a huge shake-up the Child Maintenance Service (CMS) payments system, forcing 430,000 to pay more.

It comes just months after the DWP scrapped the £20 CMS access fee

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It comes just months after the DWP scrapped the £20 CMS access feeCredit: Getty

While 260,000 parents would see a reduction in fees, as long as they kept up with payments.

Almost one million children receive payments through the service, the majority of parents use the free Direct Pay service.

While 260,000 use Collect and Pay, where the paying parent is charged 40% and the receiving parent loses 4%.

Under plans for a huge change to the scheme all parents would have to use the Collect and Pay service and fees would be cut to 2% for the paying parents and 2% for the receiving parent, The Sun can reveal.

Child maintenance covers the cost of paying your child’s living expenses when one of the parents does not live with the child.

It’s made when you’ve separated from the other parent or if you’ve never been in a relationship.

This is a financial arrangement between you and the other parent of your child.

Separated couples can arrange child maintenance payments between themselves or use the government’s CMS, which does this on their behalf.

It’s commonly used to help ensure that victims of domestic abuse or hostile previous relationships can get a fair share when helping to bring up their children.

Anybody with children under 16 (or under 20 if they are still in full-time education) can use the CMS.

Four methods you can use to clear debt

If you use CMS, they will calculate your child’s maintenance amount based on the circumstances of the paying parent.

Mel Stride, Secretary of State for Work and Pensions, told The Sun: “For some children in single-parent families, child maintenance means the difference between a childhood with hope or one blighted by poverty.

“That’s why we are cracking down on the few who shirk their duties.

“My plans for all parents who use the Child Maintenance Service to have their payments collected will mean there is no hiding place for those who fail their children.”

How would the new fees work?

If the payment was £100, a paying parent would pay £120 (£100 liability and £20 fee) and the receiving parent would receive £96.

However, the DWP acknowledged that it would be unfair to charge those who successfully make their payments via Direct Pay with these fees.

Instead of paying these rates, the DWP told The Sun that it’s looking to cut the administrative costs to 2% for the paying parent and 2% for the receiving parent.

This means that if the liability were £100, a paying parent would pay £102 (£100 liability and £2 fee) and the receiving parent would receive £98.

However, it warned that parents who miss a payment will be forced to return to paying the original 20% fee liability, as part of a deterrent to ensure payments aren’t missed.

Victoria Benson, chief executive of Gingerbread, the single-parent charity, warned that the measures don’t go far enough.

She said: “It’s clear that the CMS needs reform – a lack of enforcement action against non-paying parents means over half a billion pounds is owed to children up and down the country.

“We welcome the consultation and the indication that the DWP is paying attention to the service’s failings.

“But we would like to see fees scrapped for all single parents who are forced to use the CMS to get the money their child is owed.

“We hope that this consultation means this government is ready to listen to single parents and will result in more children getting money they are entitled to more quickly.”

The consultation on the changes will run until July 31.

WHAT DOES THIS MEAN FOR PARENTS

COMMENT by Tara Evans, Head of Consumer, for The Sun

I’VE always thought that the sky-high fees that parents must pay to use the Collect and Pay service were unfair, so it’s great that 260,000 could have their costs slashes by this charge.

But the majority of parents, some 430,000, will end up paying more.

A 2% fee on either side may not seem like much, but it will add up.

Either way, it seems unfair that the almost a million children who are supported by this service will be the ones who ultimately lose out.

The DWP argues that the fee is taken on top of any payment, but are parents – especially those who are single household families – continue to struggle, it’s a charge that they could really do without.

We’d love to hear your thoughts on this story. Please comment or email us at money@the-sun.co.uk.

Who has to pay child maintenance?

You must have a child maintenance arrangement if your child is under 16 (or under 20 if they are still in full-time education).

Both parents are responsible for the costs of raising their children, even if they do not see them.

You don’t have to arrange maintenance through the CMS – you can choose to arrange it directly with the other parent.

Paying child maintenance doesn’t mean you have a right to see the child.

If you’d like to see them, you should first try agreeing with the person looking after them.

If you don’t think you’re the child’s parent, you must prove why.

You might have to pay until you prove you’re not the child’s parent.

The CMS can only ask you to pay maintenance if all the following rules apply to you and your family:

  • You’re all “habitually resident” in the UK. This means you’ve made the UK your home and intend to live here for the time being.
  • The child is under 16 or under 20 and in approved education.

The Child Maintenance Service can:

  • Work out an amount to pay
  • Arrange payments and take action if a parent does not pay
  • Sort out disagreements about parentage
  • Try to find the other parent if you do not know where they are

You don’t have to pay through the CMS if you already pay maintenance for the child:

  • To someone else through the CMS
  • Under a court order which is less than a year old

APPLY FOR CHILD MAINTENANCE

VISIT the ‘Get help arranging child maintenance’ on Gov.UK to apply to the CMS, if you choose to use it.

When you contact the Child Maintenance Service, you’ll need:

  • The reference number you got from the ‘Get help arranging child maintenance’ tool
  • Your bank details
  • Your National Insurance number

If you do not have day-to-day care of the child, you’ll also be asked about:

  • Your employment details
  • Your income and any benefits you get
  • Private pension contributions

Tell the CMS if it’s unsafe for the other parent to know your name (if you’ve changed it) or your location.

Tell the CMS if the paying parent has other income or expenses that you want them to consider when working out payments.

This is called ‘applying for a variation’ and either parent can apply.

The £20 application fee was scrapped for all on February 26, 2024.

How much do I have to pay?

The CMS will initially assess what you have to pay based on what the other parent has told it.

Information on each parent from HM Revenue and Customs (HMRC) and the Department for Work and Pensions (DWP) will also be assessed.

It will then phone you to ask you for information to calculate exactly what you should pay.

If the CMS can’t contact you by phone, it will write to you. You have 14 days to reply. 

The CMS will try to arrange a face-to-face interview with you if either:

If you use the Child Maintenance Service, they will work out your child maintenance amount based on the paying parent’s circumstances.

You can then either:

  • Arrange payments with the other parent yourself (Direct Pay)
  • Use the CMS to collect and pass on payments (Collect and Pay) – there are fees for this service

Both parents are given a choice. If either parent chooses Direct Pay, the payment method will be Direct Pay.

You don’t have to pay any fees when you arrange payment this way.

But if the paying parent misses or is late with payments, the CMS can change the payment method to Collect and Pay.

You must pay a fee each time you make or receive a regular child maintenance payment through Collect and Pay. The fee is:

  • 20% (which is added to the payment) for paying parents
  • 4% (which is taken off the payment) for receiving parents

What happens if you don’t make a payment?

If you get payments using Direct Pay, tell the CMS about a missed payment.

If the CMS arranges payment for you through Collect and Pay, you do not need to do anything.

They’ll take action when a payment is missed.

They can apply for a court order (called a liability order) and take legal action to recover any unpaid child maintenance.

They may charge the paying parent for the cost of any action they take.

This is on top of the child maintenance they owe.

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