Child Support, Pensions and Social Security Act 2000
2000 CHAPTER 19
Part 1: Child Support.
Commentary on Sections
Financial penalties
Section 18: Financial Penalties
224.Early attempts to implement interest charges on arrears of child support maintenance were abandoned from April 1995. The calculations were complex and difficult to explain to clients. An alternative provision to interest was introduced by the Child Support Act 1995 but did not come into force. Neither of these provisions will have effect in the new scheme.
225.Instead, a simpler, discretionary financial penalty will be introduced. The intention is for the Secretary of State to have discretion to impose a financial penalty of up to 25 per cent of the amount owed. This will be levied for each week in which payment was not made, but will not be compounded. The charge will not be child support maintenance but will be an administrative penalty payable to the Department of Social Security in recognition of the additional work involved in pursuing late or non-payment and will be paid into the Consolidated Fund.
226.It is intended that the penalty will not be imposed if a missed payment is paid within a reasonable period, or the payment was missed for good reason, such as sickness, or acceptable arrangements are made to pay the missing amount and to continue to pay over an agreed period.
227.It is envisaged that the penalty will rarely need to be applied, but that it will provide a useful incentive for persuading non-resident parents to meet their responsibilities.
228.This section makes an amendment to section 41 and replaces section 41A of the 1991 Act. It removes the provisions on charging interest and inserts new provisions for financial penalties to be charged.
229.Subsection (1) amends section 41 of the 1991 Act to remove the charging of interest on arrears. Transitional provisions will allow the Secretary of State to continue to collect and enforce interest charges already imposed.
230.Subsection (2) substitutes section 41A of the 1991 Act with a new provision on financial penalties.
New section 41A: Penalty payments
231.New section 41A(1) provides for regulations that allow the Secretary of State to require a non-resident parent who is late in paying child support maintenance to make a penalty payment. Regulations will further provide the way in which penalties are calculated.
232.New section 41A(2) makes the amount of a penalty payment discretionary but limits the amount to be charged to 25 per cent of the amount due for that week.
233.New section 41A(3) provides that the amount of the child support maintenance arrears remains due even when a financial penalty has been imposed. The financial penalty is not child support maintenance and is not passed on to the parent with care.
234.New section 41A(4) provides for regulations to:
state at what point in time a financial penalty becomes payable; and
allow all or part of the penalty to be waived at the discretion of the Secretary of State. This will depend on reasons given for late or non-payment and the level of co-operation in paying the arrears.
235.New section 41A(5) allows regulations on collection and enforcement to apply to penalty payments in the same way as they do to child maintenance payments. Therefore the Secretary of State will have exactly the same powers to collect and enforce penalty payments and may combine this action with action to collect and enforce child maintenance.
236.New section 41A(6) provides that any payment collected must be paid into the Consolidated Fund and is therefore not paid over to the parent with care.
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