Will these changes just affect new CMS users or existing users too?
All current CMS users, whether on Direct Pay or Collect and Pay, will be moved over to the new service. There will be a transition period before you are moved over. The government is saying that this will be 3 months.
As part of the transition process, the parent who opened the case will have the changes explained and be advised of their options: either to remain in the CMS on the single, monitored service or, where it is safe and appropriate, to move to a private, family-based arrangement. At any point, you will be able to move back to the CMS if the private arrangement isn’t working.
What about the fees?
The government has said the new service will mean 2% being added to the paying parent’s payment and 2% deducted from what the parent with care receives. However, a system will also be in place so that paying parents who are not paying what they are expected to pay will be charged 20% as now. We are trying to find out exactly how this would work in practice.
If you’re on Collect and Pay currently, this will be good news as it means a reduction in fees. However, for those currently on Direct Pay, this means an introduction of fees. Gingerbread opposes these fees and will continue to push for them to be abolished. This call for an abolition of fees is included under point 1 of our letter to the CMS Minister. The alternative for those on Direct Pay who don’t want to pay a fee if this does go ahead as planned will be to set up an arrangement outside the CMS. Work is also needed so as much support is put in place for those wanting to set up a private arrangement. If you do set up a private arrangement, there is nothing to stop you from going back to the CMS in the future at any point.
What about non-resident parents who use loopholes to avoid payment?
We’re concerned that the proposed changes will not be enough to ensure that children get the financial support they are entitled to. That’s why we are writing to the CMS Minister to set out that a transformation in enforcement is needed, if the change is to be effective. This means proper monitoring of payments and follow up where payments are missed. It also means action to better assess income and to close loopholes that allow non-resident parents to avoid payments.
The government will also be consulting later this year on how the calculations for CMS are made. We will be pushing for unearned income and issues with self-employment to be part of this.
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