Maintenance collection fees reduced for recipients, not for payers

Work and Pensions Minister Steve Webb has announced that the proposed collection fee of 7% that will be imposed on parents with care who receive maintenance is too high and will be reduced to 4% of the maintenance payment.

But the proposed 20% fee to be added on top of the actual maintenance assessment will not be reduced – so non-resident parents will be paying an even higher proportion of the cost of the new maintenance system.

These changes will come into effect gradually over the next few years as new and existing maintenance cases are moved on to the new “2012” scheme.

The flat rate of maintenance in the new scheme for people with income of less than £100/per week or on benefit has also been reduced from the proposed £10/week to £7/week, an increase from the current flat rate of £5.

These new fees are intended as an incentive for separated parents to agree their own maintenance payments, rather than use the government scheme to assess and collect payments.

Non-resident payments who currently use the CSA will be offered the opportunity to prove their compliance voluntarily by paying via an unenforced method of payment such as direct debit for the final six months of their CSA liability.

Those non-resident parents who accept the invitation and then comply will have access to the ‘Direct Pay’ option and thereby avoid the collection fee. Non-resident parents who refuse or fail this invitation will start paying fees when their case is moved to the 2012 scheme. 

This change is unlikely before 2014 at the earliest.