The Department for Work and Pensions (‘DWP’) has announced this week that it will begin the process of closing down child maintenance cases on the previous 1991 and 2000 regimes. The DWP says there are around 800,000 cases (and therefore 800,000 families) to which this process applies.
The first phase of the closing process means that £150,000 parents will be contacted to let them know that their maintenance arrangement is coming to an end. What will not be immediately apparent are all of the options going forwards.
Families will be signposted to Child Maintenance Options, an information service whose emphasis is to encourage parents to make their own agreements. However, when the previous maintenance arrangement ends, either parent is entitled to apply to the new Child Maintenance Service for a new calculation under the new scheme, which is based on a gross income formula. This will not happen automatically – so parents need to be aware that they need to act if they wish to follow this route.
In fact, if parents act in time, they can apply to the new scheme so that their arrangement flows seamlessly from the old scheme to the new ensuring they do not miss any payments.
Some parents will be considerably better off under the new scheme (and that applies to receiving parents as well as paying parents depending on the circumstances) so it is well worth investigating the outcome under the new scheme.
The concern for many is that parents will simply not realise that the new scheme is an option for them, and that faced with the suggestion that they reach their own agreement direct they will simply give up and the child will not receive any child maintenance going forwards. The DWP estimates that as many as 50,000 children could benefit from increased maintenance under the new scheme.
The message is simply this: if you or your client receives ‘old scheme’ maintenance and receives the letter from the DWP saying it will end, make sure detailed advice is sought as to all of the options going forwards – and the sooner this advice is sought, the sooner action can be taken.