The Department for Work and Pensions (DWP) is planning significant changes to the Child Maintenance Service (CMS), including proposals to abolish Direct Pay and introduce a new payment system with charges for parents who currently transfer maintenance money directly to one another.
The proposed reforms could affect hundreds of thousands of separated parents across the UK. Under the plans, the CMS would collect maintenance payments from paying parents and transfer the money to receiving parents, allowing the department to monitor whether payments are made in full and on time.
The government says the changes are intended to improve payment reliability, reduce opportunities for financial abuse and ensure children receive the maintenance they are owed. However, the proposals would also mean that parents who currently use Direct Pay without paying service fees could face a new charge of 2%.
At the same time, some parents who already use the CMS Collect and Pay service could pay considerably less if they meet their payment obligations. The proposed changes therefore have different financial implications depending on how parents currently manage their maintenance arrangements.
The reforms remain proposals, and the existing rules continue to apply unless and until the government implements changes. Here is what parents need to know about the planned system, the proposed charges and the concerns raised by campaigners and parliamentary committees.
Changes
Direct Pay allows the CMS to calculate the amount of child maintenance a paying parent should provide while leaving the parents responsible for transferring the money between themselves. The service was introduced in 2012 to give separated parents a way to manage payments without requiring the CMS to collect and distribute the funds.
Under Collect and Pay, the CMS handles the transfer of money between the paying and receiving parents. This provides greater oversight of transactions but currently involves charges for both parties.
According to the DWP statistics cited in the supplied report, approximately 450,000 Direct Pay arrangements were in place, while around 350,000 arrangements used Collect and Pay. These figures illustrate the potential scale of the proposed changes, although the number of arrangements can change over time.
The government’s plan is to replace the two arrangements with a single service in which the CMS oversees payments. Officials argue that this would allow the department to identify missed or incomplete payments more effectively and take action when parents fail to meet their obligations.
For parents who currently use Direct Pay, the most immediate change would be the introduction of service charges. Although the government says the new system would improve accountability, families would need to consider how the fees affect the amount paid and received.
Parents should remember that the proposals do not mean Direct Pay has already been abolished. Until the new arrangements take effect, existing rules continue to govern their cases.
Charges
The proposed fee structure is a central part of the planned reform. Under the current Collect and Pay system, paying parents are charged an additional 20% on top of their maintenance liability, while receiving parents have 4% deducted from the maintenance they receive.
Under the proposed system, the charges would change for parents who comply with their payment obligations.
| Payment arrangement | Current charge | Proposed charge |
|---|---|---|
| Direct Pay | No CMS collection fee | 2% charge proposed |
| Collect and Pay, paying parent who pays on time | 20% surcharge | 2% surcharge |
| Collect and Pay, paying parent who does not pay on time | 20% surcharge | 20% surcharge |
| Collect and Pay, receiving parent | 4% deduction | 2% deduction |
The proposed rates are based on the information in the supplied report. Parents should check the final government rules before making financial decisions because the structure and implementation details could change.
For parents currently using Direct Pay, the proposed 2% charge would represent a new expense. For compliant paying parents already using Collect and Pay, however, the reduction from 20% to 2% could lower the cost of meeting their maintenance obligations.
Receiving parents using Collect and Pay could also benefit from a smaller deduction, with the proposed rate falling from 4% to 2%.
The distinction is important because the reforms would not affect every household in the same way. A parent who currently transfers money directly to an ex-partner without a fee could face an additional cost, while a parent already paying through the CMS could pay less if payments are made on time.
Example
Consider a paying parent whose calculated child maintenance liability is £100 a week.
Under the current Collect and Pay system, a 20% surcharge would add £20 to the payment, bringing the total cost to £120 a week. Under the proposed structure, a compliant paying parent would pay a 2% surcharge instead, adding £2 and bringing the total to £102.
The difference would be £18 a week.
The receiving parent would also see a change. Under the current arrangement, a 4% deduction from £100 would leave the recipient with £96. Under the proposed 2% deduction, the recipient would receive £98.
The comparison is summarised below.
| Example based on £100 maintenance | Current rules | Proposed rules |
|---|---|---|
| Paying parent’s surcharge when compliant | £20 | £2 |
| Paying parent’s total weekly cost | £120 | £102 |
| Receiving parent’s deduction | £4 | £2 |
| Receiving parent’s weekly payment | £96 | £98 |
These figures illustrate the reported fee structure and assume a £100 maintenance amount before applicable charges. The actual amounts in an individual case depend on the maintenance calculation and the rules in force.
The proposed reduction in charges for compliant Collect and Pay users is intended to encourage regular payments. Under the reported plan, the higher 20% surcharge would remain for paying parents who do not pay on time.
For parents currently using Direct Pay, the main consideration is different: they would move from a fee-free transfer arrangement to a system with a proposed 2% charge.
Safety
The DWP says safety is one of the principal reasons for ending Direct Pay.
Under the existing arrangement, the CMS calculates the maintenance amount but does not routinely monitor whether the paying parent transfers the correct amount on time. If payments are late, incomplete or missing, the receiving parent may need to report the problem before the department can investigate.
This places responsibility on the receiving parent to identify and report non-compliance. It can also create difficulties when parents have a strained relationship or when one parent uses money to exert control over the other.
In its response to questions about the proposed reforms, the government highlighted research showing that only 60% of receiving parents using Direct Pay reported receiving all the maintenance they were owed. Only 40% said they always received payments on time.
The supplied report also cites DWP research indicating that 71% of receiving parents and 51% of paying parents using Direct Pay said they had experienced domestic abuse from the other parent.
These findings relate to the research population and should not be interpreted as evidence that every Direct Pay arrangement involves abuse. They do, however, illustrate why the government is examining the risks associated with requiring former partners to manage financial transfers themselves.
The proposed single service would allow the CMS to monitor payments directly. In principle, this could reduce the need for parents to contact each other about missed payments and provide the department with clearer information about compliance.
However, the effectiveness of the new system will depend on the CMS having sufficient staff, resources and processes to manage the additional responsibilities.
Concerns
Not all organisations support the proposed abolition of Direct Pay.
Gingerbread, a charity supporting single-parent families, has backed the need for reform while stressing that changes must be implemented carefully. The organisation has called for a clear timetable and warned that families need certainty about when promised improvements will be introduced.
Other campaigners have raised concerns about removing a fee-free payment option. Some parents may prefer Direct Pay because they have cooperative relationships with their former partners and can manage transfers without CMS involvement.
For these families, a compulsory service could mean paying charges even when their existing arrangements work effectively.
The House of Lords Public Services Committee also expressed reservations in its report on reforming the Child Maintenance Service. The committee questioned whether the government had sufficiently demonstrated that removing Direct Pay would lead to higher compliance and warned that transferring all cases to a service with limited resources could worsen existing problems.
These concerns highlight the central challenge facing the reforms. A system that monitors every payment could improve transparency, but it must also process transactions accurately, respond to disputes and enforce maintenance obligations effectively.
If the CMS cannot manage the increased workload, parents could experience delays or difficulty obtaining help. The government will therefore need to address operational capacity alongside changes to the payment structure.
Timeline
The government has indicated that it wants to move towards a single service, potentially from 2027, but the final implementation timetable and detailed rules should be checked against official announcements.
Until the reforms take effect, parents should continue to follow the existing arrangements for their cases. Those using Direct Pay should not assume that their current payment method or fee arrangements have already changed.
Parents who use Collect and Pay should also continue to follow the current rules, including the applicable charges and payment obligations.
As the proposals develop, families should look for information from the official Child Maintenance Service and the DWP. These sources are the most appropriate places to confirm implementation dates, eligibility rules and any changes to fees.
It is also important for parents to keep records of payments, agreements and communications relating to maintenance. Accurate records can help when resolving disputes or reporting missed payments.
Impact
The proposed CMS reforms could significantly change how separated parents manage child maintenance in the UK. The government wants to improve payment monitoring, reduce non-compliance and limit the opportunities for financial abuse that can arise when former partners must manage transfers themselves.
For compliant parents already using Collect and Pay, the proposed reduction in charges could provide meaningful savings. Receiving parents could also retain more of their maintenance under the lower proposed deduction.
However, parents currently using fee-free Direct Pay would face a new cost if the proposed 2% charge is introduced. The overall effect will depend on the maintenance amount, payment behaviour and the final rules adopted by the government.
The key issue is whether a single, monitored service can deliver more reliable payments without creating additional administrative problems or imposing unnecessary costs on families whose current arrangements work well.
For now, the changes remain proposals, and parents should continue following existing CMS rules while monitoring official announcements for a confirmed timetable and final details.
