Child Maintenance Service fees and under payments

CMS has calculated that John must pay £100 child maintenance to Beverly.

Before the CSA closed, Beverly would have received all of the money that John paid:

But CMS adds a 20% fee for fathers and takes a 4% fee from mothers.

In an ideal world, John is fully compliant and pays £120 to CMS. CMS takes £20 for John’s fee plus £4 for Beverly’s fee.

CMS pays £96 to Beverly.

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But a large proportion of fathers on “Collect & Pay” do not pay any child maintenance at all, or they pay irregularly, late, and less than the amount demanded. So what happens if John is not compliant?

If John decides to stonewall the CMS and pay nothing, he pays no fees, Beverly pays no fees, and Beverly receives nothing.

Just like under the CSA. The 20% collection fee for fathers is supposed to act as an incentive for him to pay regularly, in full and on time, so that he can be transferred to “Direct Pay” and avoid fees.

If John simply decides to stonewall the CMS and pay nothing, the 20% collection fee does not act as an incentive.

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What happens if John pays some child maintenance but less than the amount owed?

CMS has calculated that John must pay £100 child maintenance to Beverly plus a £20 fee.

But John only pays £50 to CMS. Before the CSA closed, Beverly would have received all of the money that John paid.

You might think that if the CMS had failed to collect the full amount, it ought to waive the fees entirely.

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But no.

The legislation says that a 4% fee must be deducted from payments received by CMS. Ministers argued that a 4% fee for mothers was a trivial amount, intended to give mothers “pause for thought”.

The 20% fee for fathers was supposed to be the real incentive to opt for Direct Pay. So this is what should happen, if the legislation were being correctly applied: CMS has calculated that John must pay £100 child maintenance to Beverly plus a £20 fee.

But John only pays £50 to CMS. CMS takes 4% of £50 for Beverly’s fee - £2 - leaving £48.

CMS pays £48 to Beverly.

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But still no.

What actually happens if John under pays is that CMS takes 20% from the under payment before passing the remaining 80% to Beverly: CMS has calculated that John must pay £100 child maintenance to Beverly plus a £20 fee. He should pay £120 to CMS. But John only pays £50 to CMS. CMS takes 16.68% of £50 for John’s fee - £8.34 - leaving £41.66.

CMS takes 4% of £41.66 for Beverly’s fee - £1.66 - leaving £40.

CMS pays £40 to Beverly. CMS has deducted 20% from the £50 paid by John.

CMS is acting unlawfully by deducting 20% fees from John’s under payment.

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So far, I have used a child maintenance assessment of £100 because it allows me to easily demonstrate percentages.

However, the average child maintenance assessment is around £30 per week.

Next I show what should happen and what actually happens if the child maintenance assessment is £30.

CMS has calculated that John must pay £30 child maintenance to Beverly.

Before the CSA closed, Beverly would have received all of the money that John paid. If he was fully compliant, she would receive £30.

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CMS has calculated that John must pay £30 child maintenance to Beverly plus a £6 fee.

John is fully compliant and pays £36 to CMS. CMS takes £6 for John’s fee plus £1.20 for Beverly’s fee.

CMS pays £28.80 to Beverly.

If John decides to stonewall the CMS and pay nothing, he pays no fees, Beverly pays no fees, and Beverly receives nothing.

The 20% collection fee for fathers does not act as an incentive for fathers who are determined not to pay.

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What happens if John pays some child maintenance but less than the amount demanded?

CMS has calculated that John must pay £30 child maintenance to Beverly plus a £6 fee.

But John only pays £10 to CMS. Before the CSA closed, Beverly would have received all of the money that John paid.

You might think that if the CMS had failed to collect the full amount, it ought to waive the fees entirely:

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But no.

The legislation says that a 4% fee must be deducted from payments received by CMS. Ministers argued that a 4% fee for mothers was a trivial amount, intended to give mothers “pause for thought”.

The 20% fee for fathers was supposed to be the real incentive to opt for Direct Pay. So this is what should happen, if the legislation were being correctly applied: CMS has calculated that John must pay £30 child maintenance to Beverly plus a £6 fee.

But John only pays £10 to CMS. CMS takes 4% of £10 for Beverly’s fee - 40p - leaving £9.60.

CMS pays £9.60 to Beverly. CMS has deducted 4% from the £50 paid by John.

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But still no.

What actually happens if John under pays is that CMS takes 20% from the under payment before passing the remaining 80% to Beverly.

CMS has calculated that John must pay £30 child maintenance to Beverly plus a £6 fee.

But John only pays £10 to CMS. CMS takes 16.68% of £10 for John’s fee - £1.67 - leaving £8.33.

CMS takes 4% of £8.33 for Beverly’s fee - 33p - leaving £8.

CMS pays £8 to Beverly. CMS has deducted 20% from the £10 paid by John.

CMS is acting unlawfully by deducting 20% fees from John’s under payment. It has under paid her by 16% of her child maintenance entitlement.

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So far, I have shown that the 20% fee for fathers, which is supposed to incentivise them to pay directly, in full and on time, to mothers, only works if fathers are fully compliant.

However, most fathers who pay child maintenance in full and on time are in “family based arrangements” or on “Direct Pay”.

Mothers are only allowed entry to the “Collect & Pay” service if fathers have already shown that they are very poor payers.

So, many fathers on “Collect & Pay” pay less child maintenance than they should, unless CMS takes it from their salary via a Deduction from Earnings Order. And the CMS is extremely reluctant to apply DEOs. I have shown that when fathers under pay, CMS unlawfully deducts 20% fees instead of 4% from the payments passed to mothers.

Finally, I show how mothers and children are punished if fathers refuse on principle to pay the 20% collection fee.

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CMS has calculated that John must pay £100 child maintenance to Beverly plus a £20 fee. But John only pays £100 to CMS. Before the CSA closed, Beverly would have received all of the money that John paid.

Legally, CMS should pay Beverly £96.

But CMS unlawfully pays Beverly just £80. CMS has under paid Beverly by 16%.

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CMS has calculated that John must pay £30 child maintenance to Beverly plus a £6 fee. But John only pays £30 to CMS. Before the CSA closed, Beverly would have received all of the money that John paid.

Legally, CMS should pay Beverly £28.80.

But CMS unlawfully pays Beverly just £24. CMS has underpaid Beverly by 16%.

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