CSA (now CMS) begin to charge for child maintenance

An invaluable update from Resolution:

Child Maintenance application fees introduced today
The Minister for Pensions, Steve Webb MP, has announced the introduction of charges for people applying to the Child Maintenance Service from today. 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).

You can find examples of the letters being sent to clients on the DWP website

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 begins today 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.

Useful links
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

Statement from the Department of Work and Pensions:

Fees and charges for the Child Maintenance Service

Fees and charges are being introduced from today (30 June 2014) for use of the Child Maintenance Service.

A letter is being issued to all Child Maintenance Service clients giving them 6 weeks’ notice that they will be charged if the Child Maintenance Service collects and pays out child maintenance on their behalf.

We have already written to a selection of Child Maintenance Service clients to encourage them to consider making a family-based arrangement or Direct Pay arrangement so they can avoid paying fees.

From 30 June, an application to the Child Maintenance Service will cost £20 for most applicants when the application is processed and a child maintenance calculation is performed.

For parents who apply to the Child Maintenance Service and can arrange payment directly between themselves there are no further fees to pay. This is called “Direct Pay”. This service offers the reassurance to clients of knowing that if payments aren’t made the Child Maintenance Service can step in and make sure any missed payments are collected.

Parents who can’t use Direct Pay can use the Collect and Pay service, where the Child Maintenance Service will collect child maintenance from the paying parent and give it to the receiving parent. The fees for this service will be 20% for paying parents and 4% for receiving parents.

Ending Child Support Agency (CSA) child maintenance arrangements

From today, we have also has started sending letters to CSA clients about ending their current child maintenance arrangements. All affected parents will be contacted between now and 2017 to give them notice that their arrangement will end. Most clients will get 6 months’ notice and will be offered support from Child Maintenance Options to put a new arrangement in place.

When their CSA arrangements end, parents have the option to:

Make a family-based arrangement – where they arrange between themselves what to pay and when.
Make an application to the Child Maintenance Service.

As long as clients’ cases are managed by the CSA they will not be charged for using the service.

Find out more about child maintenance arrangements at www.cmoptions.org

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