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Monday, 30 June 2014

Separated parents face child support fees penalty

Written by The Editorial Team

Separated parents will be hit by fees if they cannot reach an amicable agreement over child support under a new system that comes into force today.

Mothers and fathers who turn to the Child Maintenance Service (CMS) to collect and pay settlements face losing significant sums of cash.

Non-resident parents will be forced to hand over 20% on top of the payments and the other parent will lose 4% of the money received.

Applications to use the new system will cost £20 and a bsent parents who have to be pursued through the courts or have maintenance deducted from their earnings will also be hit by extra charges of up to £300.

Ministers insist the reforms are being introduced to encourage parents to work together to make their own arrangements, freeing up the service so it can focus on the most challenging cases, but critics fear it will put pressure on parents to accept unsuitable arrangements.

Letters were sent to around 50,000 parents in England, Scotland and Wales earlier this year warning them about the changes as the CMS replaces the Child Support Agency, which is being phased out over the next three years.

Parents that come to an agreement without CMS intervention will be able to use a D irect Pay service to exchange payments - a system 39% of parents are using, a ccording to the Department for Work and Pensions.

Work and Pensions Minister Steve Webb said: "Reform of the old broken system was absolutely necessary and today marks a key milestone in the Government's essential reform of the child maintenance system in Great Britain.

"The old CSA was just not fit for purpose - it spent £503 million in one year to transfer £1.1bn of maintenance and left more than 50% of children living in separated families with no effective financial arrangement in place at all.

"The new system is helping more couples to work together to ensure the best outcomes for their children. We know that children do better when parents work together, even after separation, and I am very encouraged that the new child maintenance system is already making this a reality for thousands of families."

Application fees to use the CMS and enforcement fees for absent parents who evade payments will begin from today while fees for the collect and pay system come into force from August.

Gingerbread warned that children face losing out under the changes as parents could be put off from seeking help to sort out payments.

Chief executive Fiona Weir said: "While it's great if parents can make their own arrangements for child maintenance, we know that this can prove difficult for many. We fear that the new charges and the Government's blinkered focus on private arrangements could deter many single parents from getting the help they need to sort out child maintenance and that children will lose out.

"Most single parent families are struggling financially at the moment and the £20 application fee to use the new Child Maintenance Service will be very difficult in practice for some to afford. It is simply wrong in principle for the Government to deduct money intended for children if the new service has to step in and collect from a parent who has failed to pay.

"We know that when there is a good child maintenance arrangement in place, whether private or through the Government service, it makes a huge difference to children's lives. We urge any single parent unable to sort out child maintenance for themselves, not to be deterred by the charges from using the CMS to ensure their children get the financial support they need."