SNP BILL AIMS TO ABOLISH ‘MAINTENANCE TAX’ ON CHILDREN

7th November 2018

PRIVATE MEMBERS BILL WILL ENSURE ‘FAIRNESS FOR CHILDREN AND PARENTS’ UNDER CHILD MAINTENANCE SERVICE

SNP MP Marion Fellows has brought forward a Private Members Bill which aims to ensure fairness for children and parents by abolishing the ‘Maintenance Tax’ from Child Maintenance Service (CMS) payments.

At present, if a non-resident parent does not make mandated payments, the CMS will collect payments themselves but place a 4% fee from the payment on the resident parent. The resident parent also has to pay a £20 application fee to open their case. The House of Commons Library estimates that in 2015/16 -16/17, £3.3 million was taken from families through this ‘Maintenance Tax’.

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%. The SNP MP wants to reduce this threshold to 10% to ensure that low income parents are not disproportionately impacted by income changes and higher income parents advantaged. The Bill will also include changes to income assessment, to ensure a paying parent’s home is considered in calculations if equity in their home is more than £500,000.

Commenting after presenting her Bill before Parliament, Marion Fellows MP said:

We have a duty to ensure the Child Maintenance Service works for both parents, but ultimately this must work for children. A receiving parent should not be penalised with a ‘Maintenance Tax’ and charges which takes food from their table, clothes from their backs and money from their pockets.

CMS must also 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, whilst parents on higher incomes keep more in their pockets.

Given the level of scrutiny and criticism that the Child Maintenance Service has received from parents, interest groups and MPs, it’s clear that change is needed to secure the rights of children, which is paramount above all else.