Would deduction of child maintenance from joint accounts open a can of worms?

Family Law|July 5th 2016

The Department for Work and Pensions (DWP) has launched a consultation on plans to make deduction orders to recover child maintenance arrears from joint bank accounts held by a non-resident parent (NRP). The idea of taking steps to ensure that NRPs meet their obligation to pay child maintenance is obviously laudable, but does this open a can of worms?

To explain the background to this, we need to look briefly at how child maintenance works under the current 2012 Scheme. The Scheme is run by the Child Maintenance Service (CMS). Applications to the CMS are made via the CM Options service, which essentially encourages parents to agree child maintenance arrangements between themselves. If they are not able to do this, they can ask the CMS to sort it out.

The CMS will calculate the amount of maintenance that the NRP should pay, by reference to a formula based, usually, on the NRP’s gross income figure, taken from HM Revenue and Customs. The maintenance will then either be collected by the CMS (Collect and Pay) or, if either party requests it, payments can be made by the NRP direct to the parent with care (Direct Pay), thereby avoiding the charges that the CMS imposes for doing the collection. If the NRP does not pay via Direct Pay, then the case is moved to Collect & Pay.

If the NRP still does not pay then there are various enforcement procedures open to the CMS. The one that we are concerned with here is deduction orders, whereby the NRP’s bank is required to deduct money from the NRP’s bank account and pay it to the CMS. Deduction orders take two forms: Regular Deduction Orders, whereby a sum is taken from the account every week or month, and Lump Sum Deduction Orders, whereby a single sum is taken from the account.

Until now it has only been possible to make deduction orders against bank accounts in the sole name of the NRP. However, the DWP is concerned that NRPs may prevent the CMS from making deduction orders by placing their funds in a joint account, and in any event NRPs may have their funds in a joint account already, without any intention to evade a deduction order.

So what are the DWP’s plans? Here is a summary of the main points:

  1. If the NRP has more than one bank account, solely held accounts will be targeted first.
  2. All joint account holders will have the opportunity to make representations in relation to the orders, including providing evidence about the amount contributed to the account by the various account holders.
  3. If evidence is provided that shows that a certain percentage of the funds in the account belonged to the other account holder(s), then those funds will not be targeted.
  4. If there is no such evidence, then it will be assumed that each account holder owns an equal share of the funds in the account. Thus, if there are two account holders it will be assumed that the NRP owns 50 per cent of the funds in the account.
  5. All parties to a joint account will have the right of appeal against the making of a deduction order.
  6. In the case of Lump Sum Deduction Orders an amount in respect of the child maintenance arrears will be frozen for 28 days while representations are made, as per paragraph 2 above, to prevent funds being withdrawn before they can be secured.

This all sounds very well and good, but I can foresee such a provision causing all sorts of difficulties.

For a start, funds in a joint account are mixed. It is artificial to say that each party owns a certain percentage (in fact, each party has access to the full amount in the account). Just because one party may contribute more than the other at one given point in time does not mean that they are entitled to a certain percentage. Over time, different amounts will be deposited and withdrawn from the account by each account holder, making it impossible to make a sensible division.

Even if you could come up with a sensible division, the shares in a joint account are constantly shifting. For example, if each party gets paid at a different time of the month then the shares on any given day will depend upon whose pay went into the account last. What is to say that the amount in the account at the time a deduction order is made fairly reflects the contributions of each party? The probability is that it won’t.

I can foresee the CMS getting utterly bogged down in complex representations by other account owners. At best it will take a great deal of time and effort to sort these out. At worst, it will be impossible to sort out who owns what. I can also foresee that ‘innocent’ other account owners (and their dependants) are going to suffer hardship, through no fault of their own.

In any event, deduction orders will not prevent NRPs from closing accounts, or diverting their income elsewhere, so the new provision will do little to combat NRPs determined to avoid their obligations.

In short, the new provision may help to collect a little more child maintenance, but it will open up new issues, and do little more than scratch the surface of the problem of non-payment.

The consultation can be found here. The consultation closes on 25 August, so if you would like to respond you must do so by then. It is intended that the new provision will come into force in June next year.

The blog team at Stowe is a group of writers who share their advice on the wellbeing and emotional aspects of divorce or separation from personal experience. Guest contributors also regularly contribute to share their knowledge.

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  1. Andy says:

    You have to laugh at the lengths the CMS and its supporter government departments go to to retrieve arrears..So it thinks that more fast track laws to peanalise the NRP with more ways to rob from accounts…
    Perhaps in such instances that as Mr Bolch says what proportion of monies into joint account is calculated and by who..
    So if this way is fruitless then another joint account holder pays..some one has to so that’s why.Perhaps it is due to the incompetence of the old CSA that the CMS has to prove it is doing a good job and without any loss or arrears that run into thousands from all the NRP…

    As per all government ideas it soon is made apparent that there will be a loop hole that you stil can go through to evade such actions as the CMS takes great care in dishing out ideas that are far beyond the agency’s intelligence.

    Let’s take for example how on earth can they take from a joint account then leave you in debt just like that or find any way to deduct order from earnings it seem that if the idiots stopped giving out large benefits including the CMS calculation then we would be far better off all round.
    Who says that the PWC is also contributing to the costs of bringing up the child or children must of been the same consultants that dream up this one idea..So before you say this typical NRP trying to get ours of paying then try seeing the percentage deducted then you will know why when we all know the PWC is better off not working or the lavish life style given on a plate…

  2. Andrew says:

    If you are the partner or spouse of an NRP – even one who pays his whack, he might fall on hard times and it will take some time for the CMS to reduce its demands accordingly – do NOT have a joint account with him unless you are willing to support his children.
    In fact if you are an NRP open an account in a bank out of the jurisdiction and transfer as much as you can there the moment it comes in. If you can get paid into it so much the better.
    This is beyond scandalous. Other creditors cannot get third-party debt (formerly garnishee) orders agaionst joint accounts – what makes the CMS or the PWC so special?

  3. Andy says:

    I totally agree with Andrew’s.post..What has the CMS and PWC have the right to raid your personal finances at will.
    The way the NRP is portrayed is commented scandalous…The PWC uses at will CMS as a legal tool to bleed to the CMS about arrears.

    No wonder the NRP ducks out due to his standard of living has depleted with courts award lump sum payments at will to the PWC..
    where is the support for the NRP no where..just read all the support web sites, it reads like a joke..
    Where are the true supportive web sites such to act on government legal robbery.

  4. Gemma says:

    I think it’s utterly ridiculous what they do what about the poor NRP who has
    To pay out hundreds a month and isn’t even allowed to see his child because the RP won’t let him. Bang out of order yet they have the cheek to bang in about not getting money. Where’s the justice
    For NRP no where!

  5. JamesB says:

    Its fairly obvious that the Government lack legitimacy. E.g. Petrol strike, Brexit, Iraq etc. Seems we have an ‘educated’ liberal metropolitan feminist establishment north London Westminster bubble ‘elite’ running the country. Evidenced by Boris being booed Brexit morning leaving his N London residence. They have gotten a bit ridiculous really, evidenced by this policy and denigration of a so called deadbeat feckless Dad. Personally that is a feminist construct, I have never met one. Usually it is the female at fault when relationships breakdown. That said, the feminists, for obvious reason just stated have succeeded, for they have the power as just stated to take fault out of the equation. Thus we have this nonsense posing as just government. Not in my name.

  6. JamesB says:

    The csa, adding insult to injury for over 25 years.

  7. Proton says:

    Amen James B, Amen.

  8. JamesB says:

    They really twist the knife hard. Trying to save the government money and losing money and goodwill and salvageable relationships in the process. An example of bad government policy.

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