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End the Maintenance Tax on families

5 min read

The Child Maintenance Service is not working for parents and especially isn’t working for children who are supposed to be the main beneficiaries of its service, says Marion Fellows MP.

Public services are supposed to serve the public – we therefore must end the Maintenance Tax on families to ensure children aren’t paying the price for their own parent’s negligence.

Anyone who has dealt with the Child Maintenance Service (CMS) knows that it is an extremely complicated system administered by an inefficient and inept department. It has been the subject of a large number of private members bills and also an inquiry by the Work and Pensions Select Committee. Speak to any parent – parent with care or non-resident parent – and they could talk to you for hours about its numerous problems.

It’s therefore obvious, that it is not working. Not working for parents and especially isn’t working for children who are supposed to be the main beneficiaries of its service.

I don’t think anyone thinks that a parent should not pay for their child. But believe me, there are parents out there who do not believe they should.  These parents dip, duck and dive their way out of paying a single penny towards their child because they perceive every payment as a payment towards their ex-partner instead.

Whatever reason a non-resident parent has for not paying, they should not be allowed to renege on their duties as a parent. But most of all, their child should not pay the price.

Currently, if a non-resident parent does not make full and timely maintenance payments which CMS have calculated on their behalf, the case will move to what’s called Collect and Pay. Overlooking the fact that there is around £4billion of unpaid child maintenance stretching back to 2003 under the Child Support Agency, what CMS (which began in 2012) is supposed to do is chase down the non-resident parent and make them pay in full.

How could anyone argue with that? As a punishment, the non-paying non-resident parent will incur an additional 20% penalty and potentially other fines based on action taken.

However, the parent with care, and therefore the child, then incur a 4% charge on all maintenance collected. In other words, a Maintenance Tax.

Call me cold-hearted, but I shed no tears for the parents incurring additional fines for refusing to support their child. But how can it be justified that a child loses out because one of their parents will not provide for them.

Before CMS will make any calculation, a parent – typically the parent with care – has to pay a £20 application fee which is another barrier parents must face – especially low income parents – before being able to access vital support.

Using figures from the Department for Work and Pensions, the House of Commons Library estimates that in the past three years alone, CMS has collected £4.8million in application fees. In 2015/16 and 16/17, £3.3 million was taken from families through the 4% Maintenance Tax.

It often feels like CMS is more intent on collecting payments to maintain itself rather than maintain the children it is supposed to serve. Charges take food from their table; clothes from their back; and money from pockets which would allow children to enjoy the upbringing that every child should have.

They are charged because one of their parents refuses to support them. They are taxed through no fault of their own. They should not be paying for their parent’s negligence or to fund Government departments.

The amount collected by the 4% charge is a pittance to the UK Government, but could make a massive difference to children’s lives.

I don’t want to paint every non-resident parent as negligent. Most want to do well by their child. For those parents, CMS also does not work.

Maintenance calculations are based on a non-residents parent’s historic income for a full tax year provided by HMRC and can only be amended if their income changes by more than 25%.

This high threshold means that low income paying parents are disproportionately hit by a drop to their income and high income parents keep more in their pockets rather than going to their child if their income increases.

Reducing this variation threshold to 10% will ensure calculations are based on an accurate income so that we can get it right for the child while still ensuring financial stability for receiving parents.

Likewise, my Bill aims to include the equity of paying parent’s homes worth more than £500,000 in calculations. Parents should not be allowed to hide their real worth in substantial assets – especially homes over half a million pounds.

A public service to support children should be doing that and it should be fair on both parents. My Bill is one of many that have come to Parliament to do just that.

The Tories make a big deal about personal responsibility and families being self-reliant. Now’s their opportunity to show they mean it with action and ensure parents pay the proper maintenance without subjecting children to a mean Maintenance Tax.


Marion Fellows is SNP MP for Motherwell and Wishaw

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Read the most recent article written by Marion Fellows MP - Margaret Thatcher's legacy forced Motherwell and Wishaw to work twice as hard to move forward


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