From March 2015 (subject to Parliamentary approval), the Child Maintenance Service and Child Support Agency (CSA) will begin sharing certain information about the payment records of their clients with credit reference agencies.
This means that arrears built up in maintenance payments will have the same effect on people’s credit score as other debts. Having a poor credit rating can cause people to be refused loans, mortgages, credit cards, hire purchase finance arrangements, mobile phone contracts and other forms of financial credit.
Principally, information will be shared about an individual when a liability order is made against them – a measure used as a last resort after other efforts to encourage payment have been exhausted. In the year April 2013 to March 2014, 12,410 liability orders were granted.
But it is also expected that the introduction of the new measure will have a deterrent effect on those who may otherwise choose to evade maintenance payments, so getting more money flowing to the children and families who need it.
Non-resident parents who have a good maintenance payment record will also be able to request that information about them is shared if they feel it may help improve their credit rating.
While the majority of non-resident parents do contribute towards the maintenance they owe – with compliance amongst CSA clients reaching a high of 86.2% in June this year – this new measure is aimed at targeting the minority who fail to pay.
It is just the latest in a catalogue of radical reforms the coalition government has made to Britain’s child maintenance system.
In addition, an online banking-style self-service facility has been launched allowing parents to manage their maintenance arrangements and keep track of payments. And new enforcement charges have been introduced to recoup the costs of pursuing those who continually don’t pay what they owe.