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Our blog provides illustrated practical guides for those going through the divorce process, plus news on divorce, money and family breakdown.

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17 July 2012

Government's ‘radical vision’ to transform child maintenance system

The Government has unveiled detailed plans for what they call a ‘new and radically reshaped child maintenance system’, saying there will be extra help for separated parents who want to support their children and new penalties for those who won't.
Ministers believe the current system, which costs £0.5bn a year, and focuses on purely collecting and transferring money has proved inefficient and has damaged separated families. The Government wants to reshape the system so it is focused on supporting families to make their own arrangements which are in the best interests of the children involved.
To do this, £20m is being invested to provide a network of support services, capable of reaching out to help separated families, wherever they are, whatever their background, online, on the phone, and in person.
Department of Work and Pensions Minister Maria Miller said:
"For too long we’ve had a child maintenance system in this country that fails children, parents and the taxpayer. Half of children living in separated families do not benefit from an effective child maintenance arrangement and there is little support for parents to work together and for reluctant parents to take their responsibilities seriously.
The new system will place a greater emphasis on supporting parents to make their own arrangements which are in the best interests of the children.  We are investing in extra support services – including mediation and counselling - to make this happen.
The statutory scheme will still be heavily subsidised for those who are unable to come to their own arrangements, but the changes we are proposing will offer greater fairness to the taxpayer and a financial incentive for parents to work together."
The policy document; Supporting Separated Families;Securing Children’s Futuressets out key improvements including:
·        Coordinating existing services
Better co-ordination of existing support services and to build an evidence base of ‘what works’ in helping parents to collaborate.
·        Telephone and online support
Several existing helplines already do an excellent job in helping parents with separation. These organisations will deliver a new service that will help mothers and fathers to work together whenever possible. A specially developed web ‘app’ will provide online information and support.
·        Local support
Funding for regional coordination and training to help join- up support services and the wider community on the ground. For example, health professionals would be able to signpost a parent to expert help with the financial issues surrounding separation.

An extra layer of support to help parents make their own maintenance arrangements will also be provided by a gateway service; for the first time, all parents considering applying for child maintenance payments via the state will be invited to discuss their situation and consider possible alternatives. Where appropriate, it will signpost them to community-based support services.
The new statutory maintenance scheme, to be known as the Child Maintenance Service, will take cases where parents cannot make their own arrangements.  In order to motivate and create incentives for parental collaboration, a system of charging will apply.
It is proposed, as well as a £20 application fee, the parent paying maintenance will pay an additional collection fee of 20% on top of each assessed payment. The parent receiving maintenance will have 7% deducted from each assessed payment.
But parents who fail to pay will face additional penalty charges reflecting the cost of enforcement action.  For example, it is proposed that a Liability Order from the courts will carry a £300 surcharge, while £200 will be charged if money has to be removed from their bank account via a lump sum Deduction Order.
Both parents will avoid collection fees if the paying parent opts to pay the other directly without use of the collection service. This is designed to build trust between separated couples.
The new Child Maintenance Service will continue to be heavily subsidised but will be faster and fairer, better for parents and taxpayer.
Payments will usually be based on the paying parent’s latest tax-year gross income, reported by HM Revenue & Customs. Use of tax data means assessments will depend less on what parents choose to disclose about their income.
Maintenance calculations will be reviewed annually to ensure they remain fair accurate and up to date.