The Big Shake-Up With Child Maintenance
From March this year, a non-resident parent who fails to contribute to their child’s maintenance payments could see their credit ratings decline!
The Child Maintenance Service (CMS) and Child Support Agency (CSA) may be given the power to supply records of a non-resident parent’s payments, or lack of, to credit reference agencies. This means that non-resident parents who fail for whatever reason to make payments towards their child’s upbringing, could not only have to deal with the stress that comes with the resident parent being most likely utterly annoyed with them, but they could be further punished as these arrears could potentially have the same effect on the credit scores as other debts such as a credit card debt. The result is that these people could be given a lesser credit limit or charged a worse rate of interest; in the worst case scenario, they could be declined a credit card, mobile phone contract or even a mortgage.
However, on the flip side, it could work in favour of those parents who tow the line and have a good maintenance payment record as those parents could request that their information be submitted to credit reference agencies.
The Department for Work and Pensions confirm that the relevant information will only be passed on to credit reference agencies as a last resort after all other efforts to secure payments from the non-resident parent have become unsuccessful.
The information about non-payment of child maintenance will only be shared with credit reference agencies once a liability order has been made against a non-resident parent. Between April 2013 and March 2014, 12, 410 liability orders were granted in relation to child maintenance. According to Steve Webb, the child maintenance minister: “For too long, a minority of absent parents have got away with failing to pay maintenance, leaving families without that financial support”.The statistics prove that there are a large number of cases where non-resident parents do not contribute financially to their children – however these new proposals are anticipated to act as a deterrent, by encouraging non-resident parents to contribute to their children’s upbringing rather than ignore them.In addition, the plans are only applicable to those who are registered with the CMS or CSA. For those parents who have agreed maintenance payments between themselves or through solicitors, a family based arrangement, will not be affected by the new proposals.
Get in touch with us today for advice on family based arrangements and your rights surrounding child maintenance.
Pinder Reaux & Associates