How Child Maintenance Arrears Work in the UK (With Examples)
Child Maintenance Service (CMS) arrears in the UK can seem complicated, but understanding the basics can help you navigate the system. Here's a breakdown of how arrears can arise, how they’re managed, and what to expect:
1. Arrears Due to Paying in Arrears
- CMS payments are calculated daily but collected monthly. This means payments are effectively in arrears because the amount for the month has already accrued by the time it’s paid.
- Example: If your monthly payment is £300, the balance on your account will show £300 due on the day it’s calculated, even before you’ve had a chance to pay.
2. Daily Calculation and Monthly Addition
- CMS calculates what you owe daily and adds it to your account monthly. This can make it seem like arrears are increasing on the day of calculation.
- Example: Suppose your daily rate is £10. After 30 days, £300 is added to your account.
3. Impact of Payments on Arrears
- When you make a payment, the arrears balance decreases. However, if a payment is late or incomplete, arrears remain on your account.
- Example: If your due amount is £500 and you pay £499, the system assumes you’ve missed the full payment and reflects the entire £500 as unpaid. To fix this:
- (a) Prove you paid £499 (e.g., via bank statements).
- (b) Contact CMS to credit your account.
4. Changes Are Backdated
- Adjustments to shared care or other factors are backdated to the date of the reported change, not when they’re processed.
- Example: If a paying parent gains more shared care in January but CMS processes the change in June, a credit or debit will apply from January. If there is a credit, payments will be lowered going forward. You wont receive money back.
5. Impact of Pension Contributions
- Proving pension contributions can reduce your CMS liability, and this reduction is backdated to the start of the payment year.
- Example: If your CMS payment is £400 per month and pension contributions reduce it to £350, you’ll receive a credit for the £50 difference for each month of the year.
6. The Arrears Balance Isn't Always Paid
- Arrears are factored into your payment plan, so you don’t pay them as a lump sum. The plan ensures ongoing payments include a portion to address arrears.
- Example: If your regular payment is £400 and you have arrears of £1,200, your plan might set payments at £450 to cover both.
7. Annual Adjustments Can Create Arrears
- Payment plans sometimes set amounts slightly below the weekly rate, causing minor arrears. These are resolved during the annual review.
- Example: A stable-income payer might see their annual review adjust payments up or down slightly, clearing small arrears or overpayments.
8. System-Generated vs. Enforced Arrears
- Some arrears result from system delays or errors, such as processing a change late. These arrears are usually not enforced.
- Example: A delay in processing a shared-care adjustment might temporarily show arrears that CMS later removes.
- However, arrears due to missed payments may be enforced, often through a Deduction from Earnings Order (DEO).
How to Deal With Arrears.
Very simple. Just stick to the payment plan.
Common Questions
Question: I am on direct pay, and I keep paying the arrears but the figure does not go down. Why?
Answer: On direct pay, the CMS assume you are paying the schedule, so they wont be aware of the seperate arrears payments. So stop paying them. Your arrears balance wont go down, as no one knows you are paying.
Question 2: Can I spread the arrears over a longer time period?
Answer: Yes you can. I know of cases where the arrears are being paid at as little as £5 per week, and other cases where the payments are being made over 8 years.
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