The UK government's child maintenance collection service has come under fire for charging hefty fees, disproportionately impacting low-income families.
Ministers have faced heavy criticism for acting like 'loan sharks' after a staggering £16 million in fees was generated from individuals handling child maintenance payments. The Department for Work and Pensions (DWP) has seen an uptick in parents using its service to manage payments, which imposes a hefty 24% charge. Campaigners have highlighted the burden this places on children, often from low-income families, with an average loss of £320 per child each year.
The soon-to-be-launched Coparent Coalition, a campaign group supporting children of separated parents, has blasted the government for 'taking advantage of society's poorest', who are more likely to rely on the scheme. While most parents normally transfer child maintenance directly to one another without DWP intervention, there is a growing trend towards utilising the government's collect and pay service. This facility, which allows deductions directly from earnings, bank accounts or benefits, is particularly favoured by parents who wish to minimise contact or where payment defaults have occurred before. It's often chosen by those of lower incomes or by more vulnerable individuals. As of September's close, numbers reached 289,300, up 10,000 since the start of the year and skyrocketing from 54,400 in December 2015. Under this system, paying parents incur a 20% fee on top of the maintenance payment, while receiving parents find themselves short due to a 4% deduction from the sum received, reports the Liverpool Echo. The Department for Work and Pensions (DWP) has previously argued that charging both parents collection fees ensures 'an ongoing incentive for both parents to move their case into direct pay, where collection fees do not apply'. The National Audit Office has highlighted that parents on lower incomes are more prone to accruing arrears, with 46% earning too little to be liable for income tax. In the quarter leading up to September, £64 million was collected in fees
CHILD MAINTENANCE GOVERNMENT FEES SOCIAL WELFARE INCOME INEQUALITY FAMILY LAW
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