What fees are charged when arranging child maintenance?

Arranging maintenance through the Child Maintenance Service

Child maintenance is a financial arrangement between a parent a child does not normally live with (the non-resident parent) and the person who lives with the child and who usually provides day-to-day care for them (the person with care). A parent is legally required to maintain their child, even if they have no contact with them.

It is not compulsory to have a formal child maintenance arrangement: parents can arrange a private child maintenance arrangement. Where parents cannot agree, maintenance can be arranged through the government’s statutory service, the Child Maintenance Service. More information can be found in the Library briefing how child maintenance is calculated.

When an arrangement is made through the Child Maintenance Service, the default option is for it to be placed onto the “direct pay” service. This is where the Service calculates the rate at which maintenance should be paid, but payments are made between parents.

The other service available is “collect and pay”, where the Service additionally collects and passes on payments. If payments are missed under direct pay, the person with care must inform the Child Maintenance Service, and a case may be moved to collect and pay. If payments are missed under collect and pay, the Service will act, and the person with care does not need to report it.

Are there fees for direct pay?

For those under direct pay, where the Child Maintenance Service calculates the rate of maintenance and payments are made directly between parents, there are no collection fees charged by the CMS.

Previously all applicants to the Child Maintenance Service would have to pay a £20 application fee. However, from February 2024, there is no longer any fee to apply. More information on the regulations that removed the £20 application fee can be found in a Commons Library insight.

What fees are charged for collect and pay?

For those using collect and pay, there is a recurring fee paid each time a child maintenance payment is made:

• The paying parent must pay an extra 20% of the child maintenance due
• The person with care (of the child) receives 96% of the child maintenance paid by the paying parent (paying a fee of 4%).

The Department for Work and Pensions provides the following example (PDF):

A maintenance liability is calculated as £100 per month. The PWC [person with care] collection charge is £4 per month and the NRP [non-resident parent] collection charge is £20 per month. The NRP’s payment schedule is then set up as £120 per month. When the monthly payment of £120 is received, £20 is allocated to the NRP collection charge, £100 to maintenance paid. £4 is then allocated to the PWC collection charge and £96 is passed to the PWC.

Why were fees introduced?

In 2011, the Department for Work and Pensions proposed charging users (PDF) to encourage parents to consider family-based arrangements. In response to a parliamentary question in 2016, the then government explained the charge provides an incentive for parents to consider using direct pay, which has no charges. It also said they contribute towards the cost of the collect and pay service, “which remains heavily subsidized by the taxpayer”.

In its response to a 2013 consultation on fees (PDF), the Department explained the paying parent has the highest charges if a case moves to collect and pay. This is both from the 20% collection fee and any enforcement fees (if they continue to not comply). It said a “significant… collection fee is necessary to create the right incentive to comply fully with Direct Pay”.

The DWP also said in its response, referring to the person with care’s collection fee, that it incentivises an agreement with the paying parent. It added the fee was set at 4% as the “absolute floor” while still providing an “incentive effect”.

Can a person be exempt from the fees?

There are currently no exemptions from the collect and pay collection fees.

In its response to a 2013 consultation on fees (PDF), the then government noted “many respondents expressed concerns over collection fees for victims of domestic violence.” When the Child Support Collection (Domestic Abuse) Act 2023 was going through its stages, there was discussion at second reading around the charges for using the collect and pay service.

The then Minister of State for Work and Pensions, Tom Pursglove said consideration was being given for an exemption in domestic abuse cases. Additionally, in the second reading of the Bill in the House of Lords, Lord Farmer (Con) said “the charging structure will be looked at as the secondary legislation is developed”.

The Child Support Collection (Domestic Abuse) Act 2023 received Royal Assent on 29 June 2023.

In September 2024, in response to a parliamentary question on fees for domestic violence survivors, the new government highlighted a consultation which included looking at changing the charging structure:

A consultation on proposed reforms to the CMS was published by the previous Government on 8 May 2024. This included removing Direct Pay and changing the charging structure, with all CMS cases managed in one service to allow the CMS to tackle non-compliance faster. The consultation also explores how victims and survivors of domestic abuse can be better supported.

This Government has extended the consultation to the 30 September 2024 to ensure full stakeholder engagement can take place. We will then consider the next steps for CMS.

Further information

• House of Commons Library, How child maintenance is calculated

About the author: Niamh Foley is a researcher at the House of Commons Library, specialising in child maintenance

Disclaimer

The Commons Library does not intend the information in this article to address the specific circumstances of any particular individual. We have published it to support the work of MPs. You should not rely upon it as legal or professional advice, or as a substitute for it. We do not accept any liability whatsoever for any errors, omissions or misstatements contained herein. You should consult a suitably qualified professional if you require specific advice or information. Read our briefing for information about sources of legal advice and help.