The problem of enforcing child maintenance against joint accounts
By:6 commentsOctober 31, 2017
Enforcement of orders requiring one party to pay money to another is often not easy, and not cheap. In all cases therefore careful consideration must be given to the prospects of success before enforcement action is commenced. After all, the last thing an impecunious party needs is to throw good money after bad. There may be matters of principle involved, but no one can live on principle alone.
I wrote here in July last year about the government’s plans to make deduction orders to recover child maintenance arrears from joint bank accounts held by a non-resident parent (NRP). The Department for Work and Pensions (DWP) had launched a consultation on the plans. The consultation closed last August, and the DWP has now published the government’s response, including the government’s amended proposals for new legislation to put the plans into effect, taking into account concerns raised in response to the consultation.
In my previous post I expressed serious concerns about the plans, which I thought might help to collect a little more child maintenance, but at the same time would open up new issues, and do little more than scratch the surface of the problem of non-payment of child maintenance. In particular, I envisaged the Child Maintenance Service (CMS) getting utterly bogged down in complex representations by other account owners. I said:
“At best it will take a great deal of time and effort to sort these out. At worst, it will be impossible to sort out who owns what. I can also foresee that ‘innocent’ other account owners (and their dependants) are going to suffer hardship, through no fault of their own.”
Do the government’s amended proposals address these concerns?
The government now proposes that:
- Prior to making a deduction order they will obtain account information, including account statements from deposit takers (banks/building societies etc). This account information will be examined to establish flows of money through the account and establish ownership of the monies contained within the account.
- There will be the opportunity for account holders to make representations about both lump sum deduction orders (in respect of arrears of maintenance) and regular deduction orders (in respect of arrears and on-going maintenance payments) – including the distribution of ownership of the funds in the account. This is to ensure they do not remove monies not owned by the parent.
- They have applied a 14 day representation period prior to serving the deduction order for regular deduction orders.
- Recognising that lump sum deduction orders have the potential to be more complex than regular deduction orders, they will increase the representation period for these to 28 days.
They also propose the following additional rights to ensure that there is independent oversight and clear channels for joint account holders to appeal their case:
- To request a review of a deduction order for the joint account holder should they not be able make representation within the representation period.
- For the joint account holder to request a review of a regular deduction order if the debtor reduces their payments into the relevant account; and
- For all account holders to appeal any decision to impose a deduction order against a joint account.
The most important point in all of this is, I think, the first. Clearly, the account needs to be studied in order to ascertain whether it is worth proceeding. However, I have two big concerns about this. Firstly, will the CMS have the necessary resources to carry out this assessment? And secondly, I will repeat another point I made in my previous post: once an NRP knows that the CMS is targeting a joint account, they can simply close the account, or divert their income elsewhere, thereby defeating the CMS’s aims.
As to the other amended proposals, they are similar or the same as before, basically giving account holders the right to argue the matter, and to appeal against any decision by the CMS. My original thoughts remain: there are going to be a lot of resources expended upon arguing matters (which will obviously eat into any extra maintenance recovered, at least as far as the state is concerned), and if the CMS gets it wrong, ‘innocent’ other account holders could suffer considerable hardship.
The government, as the holder of taxpayers’ money, needs to act with the same prudence as the individual litigant when it comes to the enforcement of child maintenance. Before going after funds in a joint account they will have to ask whether they are opening up a can of worms, and whether they will be throwing good money after bad. I fear that in the vast majority of cases the answers to both questions will be in the affirmative.
The government’s response to the consultation can be found here.
Photo by Philippe Put via Flickr under a Creative Commons licence.
October 31, 2017
Categories: Family Law