Child Maintenance to be reported on credit report

Posted by Neil Greenhill in Credit Check on 10 November 2014 - Neil is a Senior Credit Analyst at checkmyfile

New Government plans will see those parents who default on child maintenance payments being reported to the credit agencies. This in turn could lead to non-payers being refused for credit such as mortgages, credit cards or even bank accounts.

The Child Maintenance Service and Child Support Agency (CSA) are looking to start sharing information with the credit agencies from March 2015, although Parliamentary Approval is first required. The plans will see missed payments and arrears on child maintenance payments being reported to the credit agencies in the same way as other debts and credit agreements.

This information could then be used to help decide credit applications. The flip side of this is that those who make payments on time can also ask for this good payment performance to be reported to the credit agencies.

However the new powers will apply only to a minority of cases where the courts have already been involved due to non-payment and granted a liability order. It is hoped the move will prove a deterrent effect for non-payment.

Steve Webb, Child Maintenance Minister, comments, "For too long, a minority of absent parents have got away with failing to pay maintenance, leaving families without that financial support.

"I would hope that we see this power used very little, because the deterrent effect of a possible negative mark on a person's credit rating will convince those who have previously failed to pay towards their children's upbringing to do the right thing”.

The move has also been welcomed by Gingerbread, a charity for single parents, who believe it is vital the payments are collected to ensure the wellbeing of those children supported by them. Fiona Weir from Gingerbread gives the decision context, saying, "More than £1bn is currently owed in unpaid child maintenance, and barely one in five of those who owe money for their children are paying it back”.

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