From early 2018, a loophole which has enabled parents to avoid paying child maintenance is to be closed. Currently, the Child Maintenance Service (CMS) is only able to seize money from a bank account if it is held solely by the paying parent. This means that any paying parent who wants to avoid paying child maintenance can do so by holding their money in a joint account with another person.
However from next year, changes in the law will mean that the CMS can access joint accounts as well. There will, of course, be safeguards put in place to ensure that only the paying parent’s money is touched but it will be a huge step forward in obtaining unpaid child maintenance. According to Family Support Minister, Caroline Dinenage, the change is expected to lead to an extra £390,000 being collected.
Although this is a step forward in ensuring that children are properly funded, it does not address all the issues with the current child maintenance service. The organisation, Gingerbread, had completed in-depth studies into child maintenance and the difficulties faced by many parents in receiving the correct amount of child maintenance. Their report published in July 2017, recommends a number of reforms including:
- Better income data sharing between the CMS and HMRC; and
- Proper support for parents challenging calculations;
Unfortunately the current system falls short when faced with paying parents who are self-employed or who have flexibility in arranging their financial affairs and how they report their money to HMRC for tax purposes. The system does not regularly take into account unearned income (i.e. dividends or rental income) and there is no longer a provision to assume a notional income to a paying parent where their lifestyle is inconsistent with their declared income. It can also be extremely difficult and time-consuming to challenge a CMS calculation and the CMS are not always helpful in supporting parents who make any challenges.
In short, although the majority of parents that use the CMS do receive the correct amount of child maintenance, there is a growing minority of parents that are still faced with difficulties and further reforms to the Child Maintenance service are keenly awaited by many.
If you would like any information regarding children matters please contact Sam Hulse, Solicitor Family Law on 01905 721600