Collection fees and enforcement charges 2012 Scheme
If you use the Child Maintenance Service (CMS) Collect and Pay service, you will have to pay a collection fee each time you make or receive a payment. There are no fees with the Direct Pay Service.
If parents use CMS to collect and distribute child maintenance between each other, charges will apply.
For paying parents the collection fee will be 20 per cent on top of the amount of the regular child maintenance they have to pay.
For receiving parents, four per cent will be taken from the amount of regular child maintenance they receive.
Example of Collect and Pay service fees
Richard is a paying parent, Jane is a receiving parent and they use the Collect and Pay service with CMS.
Richard is to pay £100 a week in child maintenance so he must also pay a collection fee of 20 per cent on top of his weekly amount. The fee works out at £20 so Richard must pay a total of £120 each week.
Jane is due to receive the £100 each week but as she uses the Collect and Pay service, she must pay a 4 per cent collection fee which is £4. Jane therefore receives £96 each week after the £4 has been deducted from the £100 maintenance payment.
If you pay or receive child maintenance using the Direct Pay service, you don't need to pay any collection fees.
If you as a paying parent miss a payment, or are late in paying and CMS has to take enforcement action, you will also have to pay enforcement charges. These are:
- £300 to apply for a liability order
- £200 to take out a lump sum deduction order
- £50 to take out a regular deduction order
- £50 to make a deduction from earnings request (if the parent is in the Armed Forces)
- £50 to take out a deduction from earnings order (for all other employees)
Deductions from benefit
- If the paying parent gets benefits, a State Pension or a War Pension, the amount owed can usually be taken from these payments
If you are struggling to make your child maintenance payments, contact CMS immediately for advice.
Avoid paying charges
You can avoid having to pay some collection fees by either:
- setting up a family-based arrangement
- choosing Direct Pay
A family-based arrangement is a flexible arrangement that you and your child’s other parent set up and manage yourselves, without CMS involvement.
Family-based arrangements are agreements between both parents about who will provide what for a child. They don’t just have to be about money. For example, you both could agree that providing school uniforms makes up part of your arrangement – or whatever you both agree is best for your child.
If you have an existing child maintenance arrangement with CMS, the person who applied needs to let CMS know to cancel this before setting up a family-based arrangement for your child.
Direct Pay is when CMS works out how much child maintenance must be paid, but you and your child’s other parent agree between yourselves when, and how, the payments will be made.
The easiest way to pay is by standing order, when payments go directly from the paying parents account to that of the receiving parent.
CMS may refuse to change arrangements to Direct Pay where payments have been missed or not made in full. CMS will be more likely to allow Direct Pay to be set up if all the child maintenance owed is settled and in order.
These are the only ways you can avoid paying collection fees.