Guidance

Child maintenance: changes to compliance measures

Published 14 December 2018

Summary

This guidance explains changes to some child maintenance compliance measures. These changes will take effect from December 2018. The changes were proposed in the Child maintenance: a new compliance and arrears strategy consultation, which was open to the public from 14 December 2017 to 8 February 2018.

The changes include:

• how we calculate child maintenance for complex earnings
• deductions from joint accounts and unlimited partnership accounts
• removing the right to a passport for parents who don’t pay

The changes mean that more money will be going to children to support their upbringing.

Changes to the child maintenance calculation for complex income

The Child Maintenance Service (CMS) works with HM Revenue & Customs (HMRC) to gather information on a parent’s earnings.

This information includes:

• earnings from work
• earnings from property
• savings and investments

This information is used to assess how much a paying parent (the parent who doesn’t have main day-to-day care of the child) should pay in child maintenance to the receiving parent (the parent who does have main day-to-day care of the child).

There are some parents who are complex earners and it is more difficult to calculate how much they should pay in child maintenance.

Complex earners earn money through various channels, including company directors and the self-employed.

They have some control over the way in which their income is paid, and are required by HMRC to complete a self-assessment.

We’ll now include other types of income in the calculation and the Financial Investigations Unit (FIU) will have further powers.

Other types of income

We’ll now include the following type of income in child maintenance calculations:

• assets such as coins, gold and property (not including the paying parent’s home)
• income generated from an asset over time such as property or land, or income generated from a sale
• foreign income
• any unearned income, such as inheritance, rental income and interest on bank accounts

The paying parent will not have to sell their home or the property where they do their business to pay any additional child maintenance.

How we’ll deal with complex earners

The Financial Investigations Unit (FIU) can decide to change a child maintenance calculation if their investigations show that a parent is deliberately hiding their income.

The FIU can also order the parent to pay child maintenance that they have previously avoided.

Deductions from joint and unlimited partnership accounts

From 20 December 2018, we can make deductions from joint accounts and unlimited partnership accounts.

Joint accounts

We always try to make child maintenance deductions from a paying parent’s individual account first. If there is not enough money in their individual account, we’ll try to make deductions from their joint account if they have one.

Unlimited partnership accounts

If there is not enough money in the paying parent’s individual account or joint account, we’ll try to make deductions from their unlimited partnership account if they have one.

To make sure we protect other people who may also have access to the unlimited partnership account, we will not make deductions if the account balance is less than £2,000.

Challenge a decision about deductions from a joint or unlimited partnership account

All of the account holders have the right to ask us to review a decision about deductions from the joint or unlimited partnership account. They must provide information about the amount each person contributes to the account and if applicable, how the business uses the account.

If it’s not clear how much of the account funds belong to the paying parent, the amount will be split by the number of account holders. For example, if there are 2 account holders including the paying parent, we will make the deduction based on a 50% share of the income.

Removing passports from paying parents

We have the power to disqualify a paying parent from holding or obtaining a passport if they have consistently avoided paying their child maintenance debt.

This power will only be used in exceptional circumstances and only applies to paying parents living in England, Scotland and Wales.

How we decide to take away a passport

We usually try and recover the debt by taking the money directly from the paying parent’s earnings or bank account. If we’ve not been able to recover the debt this way, we may take away their passport.

If the debt is over £1,000, we’ll make an application to the Magistrate’s Court or the Sheriff (in Scotland) for the paying parent to be disqualified from holding or getting a passport for up to 2 years.

Depending on the circumstance, we may apply some of our other enforcement powers before taking away the passport. These could include:

• asking bailiffs or sheriff officers to seize belongings and sell them to cover the cost of the child maintenance debt
• prevent the paying parent from selling or remortgaging their house until the child maintenance debt is paid
• force them to sell their house or other assets
• take away their driving license
• send them to prison

How we take away the passport

We’ll gather evidence that the paying parent has deliberately refused to pay their child maintenance debt. We’ll send this evidence to them before they appear in court.

They must attend the court hearing and bring their passport.

If the court agrees that the passport should be taken away, it will be immediately removed and cancelled.

The court can reverse the decision if the paying parent agrees to pay their debt. If the paying parent pays off some of their debt, the court can also reverse the decision or reduce the amount of time the passport is taken away.

The paying parent will have the right to appeal the decision.

More information

If you need more information about the changes contact the Child Support Agency or Child Maintenance Service.