NEW child maintenance laws will help wealthy fathers to evade paying financial support to their former wives and children, campaigners have warned.
The new system is being introduced by the UK government to reduce the overall bill for chasing fathers through the courts in lengthy and expensive cases in which income levels and the value of assets are disputed.
But lawyers who represent mothers in child maintenance cases believe the new rules – in which some assets will no longer be taken into account – will make it easier for some rich fathers to conceal their wealth.
John Fotheringham, an Edinburgh specialist in both child and family law, is to outline concerns to UK Department of Work and Pensions officials on behalf of the Law Society of Scotland.
Opposition politicians and charities in Scotland have also criticised the new system, saying it was “truly shocking” that the new rules would make it simpler for wealthy parents to evade their responsibilities.
“The cases that are causing the Child Maintenance Service difficulty are being removed precisely because they cause it difficulty, not because it is just that they fall out of the system,” Fotheringham said.
“It’s those who are fairly wealthy, and will be able to declare only a small amount of that, who will benefit because of the changes. We’re talking about people who have wealth, but have just not declared it. ”
He added: “It’s being done to cut costs. But part of the collateral damage is that you are going to make life easier for those who wanted to evade the system.”
An estimated 900,000 children currently benefit from child maintenance payments in the UK but the system is astronomically expensive to administer, coming in at around £500 million a year. Ministers want to change how income is assessed from what parents choose to disclose to payments based on more accurate latest tax-year gross figures gathered by HM Revenue & Customs. As a result, two regulations embedded in current rules – sections 18 and 20 which deal with assets – will be scrapped.
Campaigners are concerned that partners and children will lose out because of the changes: “The announcement of the removal of regulation 18 and 20 is of serious concern to us,” said Michelle Counley, chairwoman of the National Association of Child Support Action. “Non-resident parents that enjoy a lavish lifestyle whilst declaring salaries of less than £100 per week will now be considered legitimate by the very agency created to help safeguard against such activity.”
Anne McGuire MP, Scottish Labour MP for Stirling and Labour’s shadow disability minister, said: “The fact that the government is making it easier for some of the wealthiest people to be able to dodge their responsibilities in this way is truly shocking, especially when the debt mountain of unpaid child maintenance stands at around £300 million in Scotland according the DWP’s own figures.
“In my constituency alone there is almost £5 million in unpaid child maintenance. This is not a victimless crime, and ministers should be looking to make this something which is harder to avoid.”
An SNP spokesman added: “Not for the first time it seems that the Westminster government has failed to listen to warnings before jumping in feet first. There is a real danger that this could create an unfair two-tier system that allows people with high wealth to avoid much of their child maintenance liabilities.
“More worryingly, it may also provide significant aid to tax-evaders, making an absolute mockery of the Westminster government’s claims that they are cracking down.”
A spokesperson for the Department for Work and Pensions said: “For the first time, the new Child Maintenance Service will use accurate incomes data, sourced from HMRC, rather than asking non-resident parents or their employers for the information, with a more robust and transparent assessment process and a simpler and fairer appeals procedure. In future, parents who think they can divert their income to try to evade paying for their own children will have nowhere to hide.”