New child maintenance regulations come into force today, Monday 30 June 2014. The Child Support Agency (CSA) will now begin to close down over the next 3 years and is replaced by the Child Maintenance Service (CMS).
The new system will mean that most parents making a new application to the CMS will have to pay an initial one-off £20 application fee. The CMS will then encourage parents to agree a Direct Payment arrangement between them meaning that the CMS will have no further role to play and the £20 admin charge will be waivered. However, if single parents want the CMS to act as a go-between for parents to collect child maintenance payments from one parent and pass it to the other then substantial fees will apply under their new Collect and Pay service from August 2014. A 20% administration fee will be added to every amount collected from the non-resident parent with a further 4% being deducted from the final amount received by the parent with care.
In reality, this means that for every £100 of assessed maintenance payment, the non-resident parent will pay £120, with the CMS retaining £20 and from the £100 due to the parent with care £4 will be deducted meaning that they will receive £96. Existing cases handled by the CSA will be transferred to the CMS over the next few years. The Government is giving people registered on the new CMS system just over a month to opt into the new scheme and clear any arrears. However, if non-resident parents still choose to use the CMS's Collect and Pay service or fail to settle arrears, the new fee will be added to every maintenance payment from 11 August 2014.
The DWP has created a useful toolkit on the following link - http://www.cmoptions.org/stakeholdertoolkit/fees-charges.asp