Recovering unpaid money
One of the ways the Child Maintenance Service (CMS) can recover money from a parent who has fallen into arrears with child maintenance payments is by taking money from their bank or building society account. However, money can only be recovered from an account held in that parent’s sole name, so joint accounts are effectively off-limits.
This created a loop-hole so that a non-paying parent who only had a single joint account, for example with a new partner, could not have any money taken from that account towards the amounts due. Not for much longer though, as powers which will enable the CMS to recover money from joint accounts will be introduced in early 2018.
The government says that only a small minority of parents hold money jointly with a partner in order to avoid paying their child maintenance but predict that a figure of £390,000 could be recovered by collecting money from joint accounts.
This is good news for the c.1.2 million parents who are owed maintenance from their ex partners. On the other hand, this news may cause concern for many who hold joint bank accounts with partners who are in arrears with their child maintenance payments as it means that their money is potential now at risk of being taken to pay that debt. This could potentially cause some strain on relationships with new partners.
The government says that safeguards will be implemented to alleviate some concerns. The CMS will only be able to deduct from joint accounts when the owing person doesn’t have a bank account in their sole name or, where there isn’t enough money in their own account.
Data and bank statements from the joint bank account will be examined prior to any deductions being made to try and establish what money belongs to the owing parent. Both account holders will be able to make their case before any deductions are made.
These safeguards may be difficult to implement, as the nature of joint accounts means that the money in them is the joint property of both account holders. Only time will tell as to how this new government clampdown will work in practice.