Clampdown on child maintenance cheats

If a parent owes child maintenance, deductions to recover that debt can currently only be made from a bank or building society account held solely by them.

Unfortunately, a small minority of parents are cheating their way out of supporting their children by putting their money into a joint account with a partner.

New laws will be brought in to allow deductions to be made from joint accounts to recover child maintenance arrears.

It is believed that by closing this loophole this could stop many parents getting away with not paying their child maintenance each year – leading to more than £390,000 additional child maintenance being collected.

The recent government’s response to a public consultation on joint account deductions has been published. This sets out how deduction orders against joint accounts will work and the safeguards that will be in place to protect the other holder of the joint account.

These include:

  • a deduction order only being imposed on a joint account when the paying parent does not have their own account, or there is not enough money in their own account
  • only funds belonging to the paying parent being targeted, as before a deduction order is made on a joint account, data on that bank account will be collected and bank statements examined to establish which money in the account belongs to the paying parent
  • existing safeguards already in place for deduction orders for child maintenance will apply to this new power, including the maximum deduction rate on regular orders being set at 40% of the paying parent’s weekly income
  • both account holders will be given the right to make their case before a deduction order is made

The new power will come into effect early next year.

Latest Blog
12
May

Saving for a rainy day

The more draconian government interventions introduced to control the COVID outbreak ...

Read More
11
May

Elastic or inelastic?

Would demand for the products or services you sell vary with price increases or decre...

Read More
05
May

Investing to increase profits

The UK tax code has numerous reliefs and allowances that reduce tax when businesses i...

Read More
04
May

High energy industries attract increased support

The other side of the recent hikes in consumer energy costs – taking their toll...

Read More