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Single parents must brace for new charges as child maintenance plans go through parliament

03 February 2014
Sweeping changes to the child maintenance system that will see charges introduced for both parents are set to go through parliament this week – but Gingerbread is calling on MPs and Lords to oppose the plans.

New regulations, due to be debated in the Commons on Monday (3 February) and the Lords on Tuesday (4 February), will lead to the closure of all CSA cases over the next three years and fees for parents who need to use the new Child Maintenance Service (CMS). 

The government wants separated parents to come to their own private arrangements, without using the new government service. Crucially, it will be closing all existing CSA cases – almost one million of them – and says that the charges to use the new service will ‘incentivise’ parents to collaborate in this way. Gingerbread argues that the changes will mean children lose out.

The Department for Work & Pensions plans to introduce a £20 application fee to access the CMS and get a maintenance calculation. If the other parent fails to pay maintenance, parents with care of their child face losing four per cent of every payment for their child in collection charges if the new service has to step in to collect the money.  Those parents who fail to pay maintenance will be charged an additional 20 per cent ‘collection fee’ on top of their children’s maintenance, which the government will keep.  

If agreed by parliament, the new charges are likely to take effect in a few months’ time.

The Secondary Legislation Scrutiny Committee has already flagged the draft regulations for the special attention of the House, warning that: “although the transfer scheme may make savings, it may imperfectly achieve the overarching policy objective of providing financial support for children” [1]. By 2017/18, the government expects to be collecting £145m per year in fees from both parents. [2]

Gingerbread Chief Executive Fiona Weir said: “The new service should have securing reliable maintenance for children at its core, but instead it will jeopardise existing arrangements and put financial pressure on struggling single parent families.

“Parents will only be able to use the new collection service when their child’s other parent has repeatedly failed to pay child maintenance. It is wrong that single parents should have to lose part of their child’s maintenance because of the other parent’s unwillingness to pay.”

When the plans were originally debated in the Lords in January 2012 the government suffered one of its heaviest defeats this parliament, with peers from all parties expressing their alarm at the prospect of charging single parents to access the CMS [3].

However, the government has failed to respond to concerns, and Gingerbread is still worried that the case closure process, application fee and ongoing charges will discourage some parents from securing maintenance for their children. The government’s own predictions are that 100,000 CSA parents, currently due child maintenance, will simply give up and make no arrangements when their CSA case is closed [4].

Fiona Weir added: “One in five of the poorest single parent families could be lifted out of poverty by regularly receiving child maintenance [5]. We want to encourage more single parents to make arrangements, but the new system will put barriers in their way. ”

DWP figures also show that one third (33%) of applicants to the CSA had a previous private arrangement that had failed.  Almost two-thirds (59%) either had no contact with the other parent or were not at all friendly, posing real challenges in being able to agree maintenance arrangements [6].

Gingerbread is handing in a petition opposing the charges to the House of Commons on Monday 3 February at 2:30pm.

ENDS

Notes to editors:
[1] Secondary Legislation Scrutiny Committee:  23rd Report - Draft Child Support (Ending Liability in Existing Cases and Transition to New Calculation Rules) Regulations 2014 and Draft Child Support Fees Regulations 2014
[2] See Lords Written Answer 10/12/2013 col WA97 http://www.publications.parliament.uk/pa/ld201314/ldhansrd/text/131210w0001.htm#13121064000186
[3] The government was defeated by 270 votes to 128 in a key vote on an amendment to the Welfare Reform Bill tabled by Lord Mackay of Clashfern, former Lord Chancellor: http://gingerbread.org.uk/content/772/Government-defeat-in-Lords
[4] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/259694/cm-case-closure-and-charges-regs-ia-final.pdf
[5] For one in five (19%) parents on benefit who receive maintenance, this income has lifted them and their children out of poverty. Source: Kids Aren't Free: the child maintenance arrangements of single parents on benefit in 2012, Gingerbread 2013.
[6] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/220462/csa-client-surveys-results.xls

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