Posted by Patrick Hart, Partner
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Failure to pay child maintenance to hit credit ratings
New powers are to be introduced to allow the Child Maintenance Service and Child Support Agency (CSA) to begin sharing information about an individual’s payment record with credit agencies. This will mean that, for the first time, a failure to pay child maintenance will have a direct impact on credit scores, impeding an individual’s ability to access such things as loans and mortgages.
People with arrears in built up maintenance will face the same damage to their credit scores as those with other forms of debt.
Child Maintenance Minister, Steve Webb MP, said: “For too long, a minority of absent parents have got away with failing to pay maintenance, leaving families with that financial support. This government is determined to take action to tackle this kind of irresponsible behaviour and support families.”
Under the new powers, information will be shared about an individual when a liability order is made against them. A liability order is a last-step measure which ensues once all other options have been exhausted.
It is hoped that the new powers will serve primarily as a deterrent against people neglecting their child maintenance payments.
“I would hope that we see this power used very little, because of the deterrent effect of a possible negative mark on a person’s credit rating will convince those who have previously failed to pay towards their children’s upbringing to do the right thing.”
He said the changes were another example of how the government is supporting families, with the new support launching off the back of the recently announced ‘families test’. Each is both part of a series of changes made through the Child Maintenance Service, which is to replace the old CSA. The Child Maintenance Service has been introduced gradually since 2012 and is now open to all applications from newly separated payments.
The regulations to enable the new powers are due to be laid in Parliament in March 2015, and are hoped to come into force by the end of the same month.
To find out more about the family services we provide, please contact Patrick Hart from our Family Law team today.
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