Dangers of Direct Payments
Voluntary or Direct Payments of child maintenance may not be as straightforward as they would first appear, and caution must be taken - particularly with the new Child Maintenance Service promoting private arrangements for child support. Parents and children often benefit from a Family Based Arrangement, but if there is an active child support agency or child maintenance service application open, certain measures are necessary to prevent child support arrears from accruing.
Child Support legislation states that the NRP can make payments to the PWC by any of these methods
- standing order;
- any other method which requires one person to give his authority for
payments to be made from an account of his to an account of another on
specific dates during the period for which the authority is in force and
without the need for any further authority from him;
- by an arrangement whereby one person gives his authority for payments
to be made from an account of his, or on his behalf, to another person or
to an account of that other person;
- by cheque or postal order;
- by debit card
An NRP can also make payments to a third party, which if shown to be for the benefit of the PWC and child/ren, can also be considered voluntary payments, including
- a payment in lieu of child support maintenance and which is paid to the
person with care;
- a mortgage or loan taken out on the security of the property which is the
qualifying child’s home where that mortgage or loan was taken out to
facilitate the purchase of, or to pay for essential repairs or improvements
to, that property;
- rent on the property which is the qualifying child’s home;
- mains-supplied gas, water or electricity charges at the qualifying child’s
- council tax payable by the person with care in relation to the qualifying
- repairs to the heating system or which are essential to maintain the fabric of the qualifying child’s home;
Proof of these payments can be provided by:
- a bank statement;
- a duplicate of a cashed cheque;
- a receipt from the payee;
- a receipted bill or invoice;
- verification orally or in writing from the person with care
It all sounds very promising, and parents who may have engaged in long term direct payments will have nothing to fear? Sadly not. A Voluntary Payment is defined under Section 28J of the Child Support Act 1991, and such payments are only acceptable during a specific period - known as the Initial Pay Period. The Initial Pay Period is the time between the effective date of your maintenance calculation, and the date in which you are first notified of your liability to pay maintenance.
Voluntary Payments outside of the Initial Pay Period are routinely rejected, even if supported by evidence unless the PWC actually verifies that the payments were accepted as child support.
There are no appeal rights over voluntary payments!
Families that can establish their own arrangements for child maintenance are to be encouraged, and evidence shows that families do benefit when such decisions are made without Government intervention. This is all good whilst the relationship is stable, but things may change, and precautions need to be taken. With that in mind, we highly recommend that parents agree the terms of any direct payments, and sign a statement to verify that the amounts agreed are being paid as - and accepted as - payments for child maintenance.
Child Maintenance Service and Direct Pay
The issue over Direct Pay becomes more of a concern with the new 2012 Gross Income Scheme. Under reforms to the Welfare system, a Paying Parent cannot be made to pay through the Child Maintenance Service unless there is evidence of missed payments. Direct Payment will be the default method of payment in all circumstances and will only move to the Collect and Pay scheme if there is evidence of non payment.
The concern remains where parents have made a private arrangement, but the case with Child Maintenance Service has not been officially closed, as payments made that are not strictly in accordance with the amounts assessed may be accruing as arrears.