The Department for Work and Pensions (DWP) has set out plans to scrap Direct Pay, the fee-free option that lets separated parents arrange child maintenance payments, and replace it with a system where the Child Maintenance Service (CMS) collects and transfers all payments.
Under proposals that could be introduced by 2027, parents who currently pay each other directly would face a new two per cent charge, up from nothing currently. The DWP says Direct Pay makes it difficult to monitor missed or late payments and can enable economic abuse.
Minister's Statement on Reform
Parliamentary Under-Secretary Lilian Greenwood said in a new update last week: "The current arrangement can also create opportunities for economic abuse, including situations where maintenance is withheld, paid late or manipulated as a means of exerting control over a former partner."
For parents already using Collect and Pay, proposed fees would fall if payments are made on time. The charge for paying parents would drop from 20 per cent to 2 per cent, while the fee for receiving parents would fall from 4 per cent to 2 per cent.
Concerns Over Compliance
The House of Lords Public Services Committee says it is not convinced removing Direct Pay will lead to higher compliance, warning that the already overstretched CMS could deliver poorer results without further investment in staffing and resources.
