Single parents are expected to be penalised by the new child maintenance rules that came into play at the end of last month, experts claim.
The new rules mean that parents applying to use the Child Maintenance Service will be charged a £20 application fee, as well potential extra fees for the collection of payments. The changes are predicted to have a negative effect on single-parent and perhaps low-income families who are most likely to need the Child Maintenance Service’s support.
Stephen Lawson, head of litigation at FDR Law, said:[quote]”In the real world, we know ‘paying parents’ for a wide variety of reasons sometimes fail to pay their regulay payments to support their children. Many struggle financially after the breakup of a relationship and these new rules will make supporting their children that much harder.
Former partners will also suffer. They will receive less maintenance support and will now be penalised for a situation that is outside their control.”[/quote]
As well as the initial £20 application fee to use the Child Maintenance Service, paying parents will be charged a 20% admin fee for every payment they make via the Collect and Pay service. The receiving parent will also have a 4% deduction made on every Child Maintenance payment they receive.
This means that for every £100 assessed, the paying parent (who does not have the main day-to-day responsibility of the child) will actually have to pay £120. The receiving parent, meanwhile, that takes care of the child, will only receive £96 after the admin fee of £24 has been deducted.
Over the next few years, the Child Support Agency will be gradually replaced with the Child Maintenance Service, and all cases will be transferred accordingly. Parents will have a month to change to the new Direct Pay system, which deducts no extra fees for the paying and receiving of Child Maintenance, and pay any money they owe.
However, if they choose to stick with the Collect and Pay system, the new fees will be added to every maintenance payment handled.
Stephen Lawson advises that parents can avoid admin charges by making private agreements and by paying every instalment on time. Family charity Gingerbread also has an online tool to help families understand the new system and how this could affect them,
Lawson added:[quote]These rules are designed to make people take responsibility for their own finances. But instead the very parents who need extra help will be let down by a system designed to support them.[/quote]