The Government has announced new powers designed to stop parents avoiding child maintenance payments. Currently, if a parent owes child maintenance, deductions can only be made from a bank or building society account held solely by them. This allows a small number of parents to neglect their obligations by putting their money into a joint account with a partner. New laws will be brought in to allow deductions to be made from joint accounts in order to recover child maintenance arrears. Safeguards will be put in place to protect the other holder of the joint account.
The Government believes closing the joint account loophole could lead to more than £390,000 in additional child maintenance being collected. It has published its response to a public consultation on joint account deductions. This sets out how deduction orders against joint accounts will work and the safeguards that will be in place to protect the other holder of the joint account.
a deduction order only being imposed on a joint account when the paying parent does not have their own account, or there is not enough money in their own account;
data on a joint bank account will be collected and bank statements examined to establish which money in the account belongs to the paying parent;
both account holders will be given the right to make their case before a deduction order is made; and
the maximum deduction rate on regular orders will be set at 40% of the paying parent’s weekly income.
The new power will come into effect in early 2018.