The Minister for Pensions, Steve Webb MP, this week announced the introduction of charges for people applying to the Child Maintenance Service. Information on the implementation of other changes, including the introduction of collection charges, is also now available. In brief:
- 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 the parent with care and 20% added on to the child maintenance liability for the non-resident parent.
Resolution has been informed by the DWP that the Child Maintenance Service is 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.
We will be monitoring the impact of the charges and will keep you informed of any developments.
Ending CSA arrangements
- First contact to ‘nil assessed’ clients also began on 30 June – all clients will be notified by letter, they won’t be receiving a phone call or email.
We will be providing further information on CSA case closure arrangements.
The DWP has created an online Child Maintenance System toolkit
The relevant commencement orders are available Child Maintenance and Other Payments Act 2008 (Commencement No. 14 and Transitional Provisions) and the Welfare Reform Act 2012 (Commencement No. 18 and Transitional and Savings Provisions) Order 2014