Fathers to be hit by rise in maintenance following sweeping new reforms

Nearly 800,000 separated fathers face increases in their bills for maintaining their children which will run up to thousands of pounds a year, it was revealed Thursday.

They will start to face hikes in the maintenance bills they pay through the Child Support Agency from next Monday when sweeping new reforms begin to be brought in. The increases will hit mainly middle-income fathers.

More than 350,000 of those affected will have to pay more than £10 extra a week to support children living with former wives and partners.

Around 100,000 will be asked to pay £40 or more a week extra to support their children.

Details of the increases to be demanded by the Child Support Agency were disclosed by documents released by the Department for Work and Pensions as part of the planning for the shake-up.

Fathers will be told to pay more as part of reforms which will involve the abolition of the 20-year-old CSA and its replacement with a new Child Maintenance Service.

Ministers plan to encourage separated parents to make and keep to their own private maintenance arrangements by piling extra costs on those who keep on using the state service.

In a second part of the reforms to come at the end of next year, both separated fathers and mothers who look after children will be charged fees on top of their maintenance if the new CMS handles their arrangements.

As a result, many fathers will face a double whammy, with the new fees, which will be set at a rate of 20 per cent of their maintenance, likely to add hundreds or thousands more again to their costs by 2014.

Work and Pensions Department officials said yesterday that the new system will begin operating on Monday in a ‘pathfinder’ exercise. This means that from next week only the relatively small number of separated fathers with four children who live with a former wife or partner will be affected.

Gradually the changes will be extended to other families, until all the 1.1 million separated fathers who currently pay maintenance bills through the CSA will be brought under the new system.

A majority of separated fathers on the CSA’s books will pay more because the new system means they will no longer be assessed for maintenance on their net income after tax and other deductions, but on their gross income before tax as recorded by HM Revenue and Customs.

They will be compensated for the change by reductions in the percentage of their income they are required to pay in maintenance.

But the switch will mean big extra costs for fathers whose payments are based on out-of-date salary estimates. They are also designed to take extra money from middle income fathers.

An analysis carried out for the DWP said 74 per cent of fathers on the Child Support Agency books will be paying more.

Half of all fathers paying through the CSA will be paying at least £5 a week more, one in five will be paying more than £20 extra, and one in 10 face added bills of £40 or more.

Even those whose income declarations and payment assessments are right up to date will lose out if they earn more than around £20,000 a year.

A father on £40,000 a year, who is paying recently calculated maintenance to a divorced wife for the two children she brings up, and who also has one child in a new family, can expect to be paying an extra £16 a week.

Fathers living on state benefits will see their flat-rate payments doubled from £5 to £10.

The Pensions Minister, Liberal Democrat Steve Webb, who is in charge of the reforms, hopes the changes will push parents out of the state system and encourage them to make their own maintenance arrangements. The DWP estimates that the number of broken families arranging maintenance through the CSA will be almost halved to 570,000.

The DWP said yesterday that the changes would make only small differences to the finances of separated families. ‘Parents can expect to see little change, either up or down, in their payment following the gradual introduction of a new Child Maintenance Service,’ a spokesman said.

The state child maintenance system, including the CSA, costs taxpayers around £500 million a year, on top of the £6 billion cost of state benefits for single parent families.





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