Child maintenance enforcement – direct deductions from bank accounts
If the Child Maintenance Service (CMS) is involved in collecting payments arranged under their maintenance schemes, and the Paying Parent doesn’t pay (for whatever reason), the CMS can arrange to have money taken directly from bank or building society accounts to pay off the arrears.
When a deduction direct from a bank account is likely to be made
If the Paying Parent has any maintenance arrears, the Child Maintenance Service (CMS) could make an order that means the bank or building society will deduct money from the Paying Parent’s account to pay off the arrears. This is called a deduction order.
The Paying Parent is most likely to have a deduction order made against them if the CMS can’t take money out of their salary or wages through a deduction of earnings order or because they don’t work for an employer. This may be because:
- The Paying Parent is self-employed
- The Paying Parent often changes jobs
- The Paying Parent is retired.
The deductions can be made as either:
- regular payments, or
- a lump sum.
The CMS doesn’t need to go to court to get a deduction order. They can make it themselves.
Regular deduction orders from a bank or building society
A regular deduction order can be made to take money from an account, either monthly or weekly.
The Paying Parent must be left with at least 60 per cent of their net weekly income. Their net income is the money left after they’ve paid tax, National Insurance, and other payments taken from their gross income, such as pension contributions or season ticket loans.
If the Paying Parent is self-employed
A regular deduction order won’t be made on an account that is used entirely or partly for business purposes, except if the Paying Parent is a sole trader.
Lump sum deduction orders from a Paying Parent’s bank or building society account
A lump sum deduction order means that the bank or building society must deduct a certain amount of money from the Paying Parent’s account as a single amount, rather than at regular intervals.
If the CMS wants to make a lump sum deduction order, they should send the Paying Parent a copy of an interim order which sets out the details of how much money will be taken out of the Paying Parent’s account.
The Paying Parent should be given 14 days to tell the CMS about any changes that they think should be made before the final order is made. These are called representations. If the Paying Parent sends in representations, they should make sure that they make it clear if they need the money that the CMS wants to deduct for essential items and the Paying Parent must be clear on what these are.
At the same time, a copy of the interim report is sent to the bank or building society. This freezes the account up to the amount of the sum set out in the order. The Paying Parent should still be able to access any money in the account above this amount.
The CMS say that they will consider any representations made by a Paying Parent. Once they’ve done this, or after 16 days if a Paying Parent doesn’t make any representations, the CMS will make a final order. This instructs the bank or building society to deduct the money and transfer it to the CMS after 21 days. During this 21-day period, anyone affected by the order can appeal to the county court.
When a lump sum deduction can’t be made
A lump sum deduction must not be made if there’s less than £100 in the account.
If a deduction order is made and there isn’t enough money in the Paying Parent’s account, any amount up to £110 will be deducted. However, the order will stay in place so that any money paid into the account in the future can be deducted to pay towards the arrears.
Remember: If the Paying Parent is self-employed:
A lump sum deduction order won’t be made on an account a Paying Parent uses entirely or partly for business purposes, except if they are a sole trader.
Data on Lump Sum Deduction Orders from 2015 through to August 2017
Source: FOI Request
In comparison here are the figures for Regular Deduction Orders made by the CMS:
The table below shows the number of Regular Deduction authorised by the CMS. These orders may not all be successful and it is not known on how many cases money was obtained as a result. The numbers are sourced clerically from internal management information and are not official statistics. The numbers are rounded to the nearest 5 orders.
Source: FOI Request
Here is the current CMS internal policies and procedures on Deduction Orders obtained by one of our members. You should have a read through this: cms-deduction-orders.PDF
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