The Department for Work and Pensions (DWP) has announced last week that they are seeking Parliamentary approval to share the details of non-payment of child maintenance with credit reference agencies.
If approved by Parliament the result will be that from March 2015 child maintenance arrears built up with the CSA or Child Maintenance Service will damage your credit rating and could mean you could face difficulties securing future mortgages, loans, credit cards, hire purchase arrangements, etc.
According to the DWP, in the year April 2013 to March 2014, 12,410 liability orders were granted against people who had child maintenance arrears. A liability order is an order made by the court for the total sum owed after other efforts to obtain payment have failed.
Under this new regime all those with a liability order as a result of failing to pay their maintenance arrears could have their credit scores damaged by this non-payment. The Child Maintenance Minister, Steve Webb MP, is reported at www.gov.uk/government/news/pay-your-child-maintenance-or-damage-your-credit-rating to have said:
“For too long, a minority of absent parents have got away with failing to pay maintenance, leaving families without that financial support. This government is determined to take action to tackle this kind of irresponsible behaviour and support families.”
This is a strong warning – pay child maintenance in full and on time or risk having your credit score damaged and future borrowing compromised.