Proposed child maintenance levy cut by government

The Supporting separated families; securing children’s futures consultation outlined plans to deduct seven per cent from each maintenance payment made to single parents with caring responsibilities to pay for the cost of using the service.

But in its consultation response published yesterday, the government said it would drop to four per cent of maintenance payments the amount it deducted from single parents after organisations including Barnardo’s, Mother’s Union, Women’s Aid, One Parent Families Scotland and the Family Law Bar Association raised concerns about the reforms.

The government’s response said a four per cent deduction “is the absolute floor” for the fees system to incentivise separated parents to set up their own private maintenance arrangements without the need to use the state-run service.

It added: “We recognise the concerns stakeholders have raised on the principle of charging, but we continue to believe it is essential that both parents are liable to pay collection fees so there is an ongoing incentive for both parents to move their case into Direct Pay, where collection fees do not apply.

“To not charge the parent with care risks locking the non-resident parent into the collection service, as the parent with care would have no incentive to collaborate or agree to a direct pay arrangement in the future. This would be unfair for the non-resident parent.”

However, many of the consultation respondents thought any fees levied against parents with caring responsibilities would result in children’s welfare suffering. Under the plans, parents who pay child maintenance will be required to pay 20 per cent on top of each assessed payment.

Single parent charity Gingerbread said on average the four per cent deduction would cost parents £70 a year, although for parents whose former partners earn the maximum assessed amount of earnings it could cost up to £1,000. The deductions are in addition to an initial £20 application fee.

Gingerbread chief executive Fiona Weir said: “Child maintenance makes a huge difference to children’s lives, especially when many families are struggling to pay for the basics at the moment. The risk is that the charges will result in tens of thousands of families giving up on maintenance altogether and their children going without vital support.”

The deductions will only apply where the Child Maintenance Service decides the non-resident parent is unlikely to pay maintenance and collection is needed, but research suggests voluntary arrangements often break down over time.

A Nuffield Foundation report published in June found that within five years, half of all private maintenance arrangements set up by single-parent benefit claimants with their former partners had broken down.