PRIVATE MEMBERS BILL WILL ENSURE ‘FAIRNESS FOR CHILDREN AND PARENTS’ UNDER CHILD MAINTENANCE SERVICE
SNP MP, Marion Fellows, is on Tuesday (6 November) bringing a Private Members Bill to Parliament which aims to ensure fairness for children and parents by abolishing the ‘Maintenance Tax’, application charges and ensuring measures which accurately reflects parents’ incomes in maintenance calculations.
Currently, if non-resident parents do not make mandated payments, CMS will collect payments. But receiving parents then incur a 4% ‘Maintenance Tax’ on all collections.
Before this can happen, parents must pay a £20 application fee for opening a CMS case making it more difficult for lone parents to access support.
Using figures from the Department for Work and Pensions, the House of Commons Library estimates that in 2015/16 and 16/17, £3.3 million was taken from families through the ‘Maintenance Tax’ with the same figure taken through the £20 application fee.
Latest figures estimate that for 2017/18, £1.5 million was taken through application fees.
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%.
Mrs Fellows wants to reduce this threshold to 10% to ensure maintenance is based on accurate income and so that low income parents aren’t disproportionately impacted by income changes and higher income parents advantaged.
Commenting, Mrs Fellows said:
We have a duty to ensure CMS works for both parents, but ultimately children. They should not be subject to a mean ‘Maintenance Tax’ and charges which takes food from their table; clothes from their backs; and money from pockets which would allow them to enjoy the upbringing that every child should have.Families are penalised for requiring help from CMS and can face financial barriers. 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.CMS also has to ensure that accurate income is used to calculate accurate maintenance by lowering the threshold for variations to 10%. The current 25% threshold hits low income parents harder if their income changes while higher income parents keep more in their pockets.Given the level of scrutiny and criticism CMS has received from parents, interest groups and MPs, it’s clear it is not securing the rights of children which are paramount above all else.
The Bill will also include the equity of paying parent’s homes worth more than £500,000 in calculations.
Mrs Fellows added:
Parents should not be allowed to hide their real worth in substantial assets – especially homes over half a million pounds.