Child maintenance payments to affect credit files
05/11/2014
Parents who miss child maintenance payments may now have their credit files affected, under new government proposals.
From March 2015, evidence of parents’ child maintenance payment history could be shared with credit reference agencies. This could lead to said parent being turned down for credit, meaning they may have a hard time being accepted for a loan, credit card or even a mortgage.
The new regulations, which need to be approved by parliament, would only affect cases where “liability orders” had been granted, meaning a parent who is so far in arrears that the courts need to intervene to legally recognise the debt. They are only a minority of cases, but ministers are hoping that the proposals will have a deterrent effect on people missing payments.
Parents with good payment histories may benefit from the measures, as they can ask for the information to be shared with financial companies if they feel it can help them obtain credit.
Child 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."
Fiona Weir, chief executive of Gingerbread, the single parent charity, claimed the announcement was “very welcome”. She said:
"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."
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