Child maintenance could affect credit rating - 5th Nov 2014 9:38am
Child maintenance record could affect credit ratings.
Parents who default on child maintenance payments face being turned down for mortgages and credit cards under new government plans.
From March 2015, information from parents' payment records in England, Scotland and Wales could be shared with credit reference agencies.
Financial organisations would then use this data to decide whether or not they want to offer someone credit.
Single parent charity Gingerbread said the announcement was "very welcome".
The new powers would affect a minority of cases where "liability orders" had been granted, because parents had fallen so far in arrears the courts had had to intervene to legally recognise the debt. But ministers hope the measures will have a deterrent effect.
hild maintenance minister Steve Webb said: "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 new powers, which will need to be approved in parliament, will also mean that parents with a good payment record can ask that this information is shared if they feel that it could boost their ability to get credit.
Fiona Weir, chief executive of Gingerbread, said children lost out when child maintenance stopped and said it was "vital" to collect what was unpaid.
She added: "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."
The Child Maintenance Service was introduced in 2012 and it will eventually replace the Child Support Agency (CSA), which is gradually closing its cases over the next three years.
The CSA, set up in 1993, attracted thousands of complaints for delays and incompetence in processing child maintenance payments.
Source : click me
Parents who default on child maintenance payments face being turned down for mortgages and credit cards under new government plans.
From March 2015, information from parents' payment records in England, Scotland and Wales could be shared with credit reference agencies.
Financial organisations would then use this data to decide whether or not they want to offer someone credit.
Single parent charity Gingerbread said the announcement was "very welcome".
The new powers would affect a minority of cases where "liability orders" had been granted, because parents had fallen so far in arrears the courts had had to intervene to legally recognise the debt. But ministers hope the measures will have a deterrent effect.
hild maintenance minister Steve Webb said: "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 new powers, which will need to be approved in parliament, will also mean that parents with a good payment record can ask that this information is shared if they feel that it could boost their ability to get credit.
Fiona Weir, chief executive of Gingerbread, said children lost out when child maintenance stopped and said it was "vital" to collect what was unpaid.
She added: "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."
The Child Maintenance Service was introduced in 2012 and it will eventually replace the Child Support Agency (CSA), which is gradually closing its cases over the next three years.
The CSA, set up in 1993, attracted thousands of complaints for delays and incompetence in processing child maintenance payments.
Source : click me