The New Child Maintenance Service: How will it Affect You?
In June 2014, the Child Maintenance Service (CMS) took over all new applications for child maintenance, as the old Child Support Agency (CSA) is phased out. The new system has been designed to make administering maintenance payments faster and more efficient by using data from HMRC. Other changes include annual reviews of the circumstances of the parent who is paying maintenance and assessments based on gross rather than net income.
Whilst many have welcomed these attempts to improve the widely-criticised CSA, there has also been some controversy over some elements of the reforms; in particular the introduction of application and collection charges for using the service. These only apply if the separating parents are unable to make a ‘family-based arrangement’ – that is, come to an agreement regarding maintenance payments.
A new online service called Child Maintenance Options containing advice and information for separating parents has also been launched. Some of the terminology has changed; for example references to the ‘absent parent’ have been replaced by ‘non-resident parent’ whilst the parent who receives maintenance is now called the ‘parent with care’.
Charges for Using the Child Maintenance Service – Collect and Pay
If separating parents are unable to come to an agreement about maintenance, then they can use the statutory child maintenance service. This service uses a formula to calculate how much the non-resident parent should pay, and can also help locate a non-resident parent if you do not know their whereabouts.
There is a £20 fee for the person who applies to use this service. Once money is being collected there are two further collection fees. These are:
- An additional 20% fee on top of the maintenance amount charged to the paying parent
- A 4% collection fee taken out of the maintenance amount charged to the receiving parent
Additionally, there are new enforcement fees in place for parents who don’t pay.
It is claimed that these fees will encourage parents to work together to make their own maintenance arrangements, and help to cover the costs of running the service, but single-parent charities such as Gingerbread have criticised the charges.
What are Direct Pay and Maintenance Direct?
If you and your ex-partner are struggling to come to an agreement regarding maintenance, but want to avoid paying the charges outlined above in the collect and pay scheme, you can use a service termed Direct Pay or Maintenance Direct, depending on whether you are using the CMS or CSA. This will calculate the amount for you, but will not collect or pay the money to the other parent.
What If I already receive maintenance under the CSA?
The CSA is being phased out between now and 2017 and all arrangements ended. You will receive a letter and more information about putting in place a new arrangement through the CMS. You can also visit the Child Maintenance Options website.
