The Child Maintenance Service (CMS) is set to undergo changes which could alter the amount separated parents pay for their children.
The UK Government has announced the introduction of new powers, with digital access to become the norm.
These new powers will expand the list of companies and organisations required to provide information to the CMS which will help the service trace the paying parent, calculate maintenance and enforce arrears more effectively.
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To make it easier for companies to respond quickly and securely the process is also being simplified to allow information to be passed on by secure digital means rather than compulsory in-person visits from CMS inspectors.
The Government is also bringing forward proposals to allow all communications to be digital, which will speed up the service and make sure information is passed on to parents quickly, the Daily Record reports.
The CMS is set up for parents who have not been able to make a private arrangement about how their child's living costs will be paid.
Following responses from children's charities, parents and interested organisations, the Government has published the details of the new powers in its response to the consultation on the Child Maintenance Service.
Plans for future changes when the legislation timetable allows will:
- include unearned income in child maintenance calculations
- extinguish small volumes of very low value debt (£6.99 and under) where the maintenance calculation has ended but there remains an outstanding debt and the value of the debt is substantially less than the cost of collecting it
- extinguish arrears where child maintenance has been deducted from a parent's earnings and their employer has gone into administration and the outstanding arrears can no longer be recovered
The full consultation response can be found on the GOV.UK website here.
Commenting on the changes, Department for Work and Pensions (DWP) Lords Minister Baroness Stedman-Scott said: "At the heart of these changes is our commitment to making sure children get the financial support they need to have the best start in life."
Baroness Stedman-Scott added: "We're bringing the service into the modern age, removing barriers that can slow down cases and prevent money reaching children.
"The Child Maintenance Service collected or arranged £1 billion for children over the last 12 months, improving the lives of hundreds of thousands of children across the UK."
How much child maintenance should be paid?
In most cases, the CMS follow six steps to work out how much child maintenance a paying parent must pay.
Step one includes finding out a paying parent's yearly gross income or if they are getting benefits, while step two considers whether anything affects that gross income.
This can include things such as pension payments, or other children who the paying parent supports.
In step three , the CMS then convert the yearly gross income amount to a weekly figure before applying a child maintenance rate in step four .
Rate based on paying parent's gross weekly income:
- Basic: £200 to £800
- Basic Plus: £800.01 to £3,000 (the first £800 of income is taken into account using the Basic rate)
- Reduced: £100.01 to £199.99
- Flat: £7 to £100 (or receives benefits)
- Nil: Less than £7
The CMS take into account the number of children who the paying parent must pay child maintenance for and any family-based arrangements.
Using the information from the steps above, in step five the CMS make a decision about a weekly child maintenance amount.
If the Basic rate applies, the amount of child maintenance depends on the number of children the paying parent must pay child maintenance for - One child (12%), two children (16%), and three or more children (19%).
Parents on the higher rate pay up to £800 at the Basic rate and then sums over £800 at 9%, 12% and 15% depending on the number of children.
Finally, if this applies, a deduction is made to this weekly amount of child maintenance in step six , depending on the average number of 'shared care' nights a week.
