{"id":44358,"date":"2014-06-29T23:15:00","date_gmt":"2014-06-29T23:15:00","guid":{"rendered":"http:\/\/mostafa.openonline.co.uk\/?guid=a876b7ecc5e40034ecbdead7d45f9b47"},"modified":"2014-06-29T23:15:00","modified_gmt":"2014-06-29T23:15:00","slug":"press-release-fairness-for-families-children-and-taxpayers-as-new-child-maintenance-system-is-launched","status":"publish","type":"post","link":"https:\/\/mostafa.openonline.co.uk\/?p=44358","title":{"rendered":"Press release: Fairness for families, children and taxpayers as new child maintenance system is launched"},"content":{"rendered":"
\n

A new child maintenance system comes into force today (30 June 2014) \u2013 supporting more families to work together, while maintaining a heavily subsidised service for those who really need it.<\/p>\n

The phased closure of the Child Support Agency (CSA<\/abbr>) now begins, as it gradually closes its cases over the next 3 years. These parents will now have the choice to make their own maintenance arrangements between themselves or use the new Child Maintenance Service. <\/p>\n

Today also sees the introduction of new fees for families which choose to use the Child Maintenance Service, as well as tough new enforcement charges for the small minority of absent parents who try to evade their responsibilities \u2013 those who, for example, have to be pursued through the courts or have maintenance deducted from their earnings.<\/p>\n

Work and Pensions Minister Steve Webb said:<\/p>\n

\n

Reform of the old broken system was absolutely necessary and today marks a key milestone in the government\u2019s essential reform of the child maintenance system in Great Britain.<\/p>\n

The old CSA<\/abbr> was just not fit for purpose \u2013 it spent \u00a3503 million in 1 year to transfer \u00a31.1 billion of maintenance and left more than 50% of children living in separated families with no effective financial arrangement in place at all.<\/p>\n

The new system is helping more couples to work together to ensure the best outcomes for their children. We know that children do better when parents work together, even after separation, and I am very encouraged that the new child maintenance system is already making this a reality for thousands of families.<\/p>\n<\/blockquote>\n

There will be a one-off \u00a320 application fee to use the Child Maintenance Service and enforcement charges of up to \u00a3300 for absent parents who have to be pursued. <\/p>\n

There will be no ongoing fees for families which use the Direct Pay service to set up direct payments between the parents. New figures released by the DWP<\/abbr> show that, already, 39% of parents within the Child Maintenance Service are using this system, rather than relying on the state to collect and pay maintenance on their behalf.<\/p>\n

Families unable or unwilling to come to a Direct Pay arrangement will have the option to ask the Child Maintenance Service to collect money from 1 parent and pay to the other \u2013 but there will be an ongoing fee for this service, which will be introduced in August. <\/p>\n

The aim of the ongoing charges for parents who want the state to collect and pay maintenance on their behalf is to encourage parents to work together to make their own arrangements, freeing up the Child Maintenance Service to concentrate on the most challenging cases and get the money flowing where it hasn\u2019t in the past.<\/p>\n

Mother-of-3 Brenda Stirling, from Broxburn in West Lothian, is amongst the first parents to have been brought into the new system. She and her partner split up 10 years ago.<\/p>\n

The hairdresser, who runs her own business, previously wasn\u2019t receiving child maintenance payments, but since she and her former partner started using the Direct Pay service, she now receives maintenance on a regular basis.<\/p>\n

Ms Stirling said the Direct Pay service was strengthening and improving their relationship as parents to their children, adding: <\/p>\n

\n

We have always talked but there has been a lack of trust between us. This system is good for us and I am using it to build the trust again with my oldest child\u2019s father.<\/p>\n<\/blockquote>\n

Written Ministerial Statement<\/h2>\n

A Written Ministerial Statement is tabled in Parliament today. <\/p>\n

The application fee to use the Child Maintenance Service is a one-off charge of \u00a320. Enforcement fees for absent parents who evade payment range from \u00a350 to \u00a3300. There will be no ongoing fees for parents who co-operate and set up their arrangements using Direct Pay. Ongoing fees for using the Collect & Pay service will be introduced in August.<\/p>\n

Read the new statistics on the Child Maintenance Service<\/a><\/p>\n

With Direct Pay the Child Maintenance Service works out an amount for parents to pay and provides guidance on setting up regular payments and payment is arranged between the parents. It will then only intervene if necessary to enforce missed payments. <\/p>\n

The alternative is Collect & Pay, whereby the Child Maintenance Service calculates, collects and pays maintenance on behalf of the parents. Fees for using Collect & Pay will be introduced later this summer. The paying parent will pay a 20% surcharge of the maintenance assessed and the receiving parent will pay 4% of the amounts received.<\/p>\n

Government research has shown that around half of receiving parents in the CSA<\/abbr> could make family based arrangements with the right level of support. With a reduced caseload, the Child Maintenance Service will be able to concentrate on the most difficult cases, and it means that those parents who feel unable or unwilling to work together will benefit from a modernised and efficient system to help get the money flowing.<\/p>\n

The old child maintenance system<\/h3>\n

The old system often took responsibility away from parents, encouraging conflict and hostility at huge expense to the taxpayer. <\/p>\n

More than 50% of children living in separated families had no effective financial arrangement in place at all.<\/p>\n

The CSA<\/abbr> \u2013 managed by an arm\u2019s length body \u2013 spent around \u00a3503 million in 2009\/10 to transfer only \u00a31.1 billion of maintenance. <\/p>\n

Under the coalition government, the CSA<\/abbr> spent \u00a3420 million in 2011\/12 to transfer some \u00a31.2 billion of maintenance. However, even with this saving, a continuing spend of over 35 pence to gain every \u00a31 does not represent value for money. <\/p>\n

The IT system was totally inadequate and notoriously riddled with defects. Cases were regularly disappearing off the system. <\/p>\n

The number of expensively-managed clerical cases hit 100,000 and the IT system was costing \u00a374 million a year in operating costs alone. <\/p>\n

The new system<\/h3>\n

The government is determined to sort out the mess and ensure today\u2019s children get a better service than their predecessors.<\/p>\n

In 2012, we abolished the arm\u2019s length body to give ministers more direct control, responsibility and accountability. <\/p>\n

The reforms are a 2-pronged approach with: <\/p>\n