You are here: Home - Saving & Banking - News -

Government to close child maintenance cheat loophole

0
Written by: Paloma Kubiak
30/10/2017
Parents who avoid paying child maintenance will have money deducted from their accounts as the government’s set to close a loophole which allows them to cheat the system.

Currently, if a parent owes child maintenance, the money can only be recovered from an account if it’s held solely in their name.

However, some parents are cheating their way out of supporting their children by putting money into a joint account with a partner.

But the government is set to clampdown on this practice by bringing in new laws allowing money to be deducted from joint accounts.

However, the deduction order will only be imposed on a joint account if the paying parent doesn’t have their own account, or there is not enough money in their own account.

And only their share of money can be targeted – bank statements will be examined to find out which money in the account belongs to the parent.

As part of the consultation, the Department for Work and Pensions (DWP) said existing safeguards for deduction orders for child maintenance will apply to this new power, including the maximum deduction rate set at 40% of the paying parent’s weekly income.

Further, both account holders will be given the right to make their case before a deduction order is made.

By closing this loophole, it will stop a number of parents from getting away with not paying the child maintenance. This, the DWP said, would lead to more than £390,000 additional child maintenance being collected.

Minister for Family Support, Housing and Child Maintenance, Caroline Dinenage, said: “Our priority is for children to get the support they need. Only a small minority of parents try to cheat their way out of paying towards their children and this new power will be another tool to tackle those who do.”

The government has set out a consultation on the proposed move which will come into effect early next year.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week