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Topic:
Interest on unpaid maintenance: (13 Posts)
Started By:
Date:
07 August, 2017 01:18PM
Interest on unpaid maintenance:
Shepherd - 07 August, 2017 01:18PM
Dear David,

My ex husband owes child maintenance arrears going back some years. These maintenance payments were not determined by the CSA or CMS, but by the Court, because I was living abroad at the time. The CMS are not involved.

I have been invited by the DJ in our current proceedings to submit calculations for the exact amount of arrears owing, including interest.

I am trying to find out what the interest rate is on arrears of Court ordered Child Maintenance and whether it's compound interest etc.

I would be so grateful for your help!

Julia
Re: Interest on unpaid maintenance:
davidterry - 07 August, 2017 02:13PM
In general there is a statutory bar on recovering arrears of maintenance which are more than 12 months old. If money is paid late then in principle it bears interest at what is called the statutory rate (which is currently 8%) from the time it should have been paid until the time it is actually paid.
Re: Interest on unpaid maintenance:
Shepherd - 07 August, 2017 03:03PM
Dear David, Thank you for that. Can I ask you this, is the interest compound? Say the maintenance is owed on the 1st of March and is unpaid, would it start accumulating 8% on the second of March?
Therefore £100 on the March 1st becomes £108 on March 2nd. Then £108 x 8% becomes £116.64 on the 3rd March and so on?
Is that how it works? Many thanks, Julia.
Re: Interest on unpaid maintenance:
HatMan - 07 August, 2017 04:56PM
Jeez - It's 8% a year - not per day!!!

You make Wonga look cheap!

Regards
Re: Interest on unpaid maintenance:
Shepherd - 07 August, 2017 05:13PM
Ha ha! Thanks for clarifying that! J.
Re: Interest on unpaid maintenance:
davidterry - 07 August, 2017 05:17PM
£100 due on 1st March 2017 would bear interest at £8 divided by 365 = 0.022 pence per day until it is paid.
Re: Interest on unpaid maintenance:
Shepherd - 07 August, 2017 06:23PM
Brilliant! Thank you so much! The debt was due and has been accumulating since 2012, so all I need to know now is where to track the statutory rate changes to make an accurate calculation. Is there a table or reference, perhaps in At a Glance, that you have access to, or a website available to the public? Thanks, Julia.
Re: Interest on unpaid maintenance:
davidterry - 08 August, 2017 09:09AM
Like I said, there is a statutory bar on recovering maintenance arrears which are more than 12 months old. The purpose of maintenance is just that - to maintain. It is not so that a person can do nothing about arrears for five years and then claim interest at a rate that most people would regard as exorbitant.
Re: Interest on unpaid maintenance:
Bubblegum - 08 August, 2017 10:03AM
davidterry Wrote:
-------------------------------------------------------
> Like I said, there is a statutory bar on
> recovering maintenance arrears which are more than
> 12 months old. The purpose of maintenance is just
> that - to maintain. It is not so that a person can
> do nothing about arrears for five years and then
> claim interest at a rate that most people would
> regard as exorbitant.

Mr Terry - would I be correct in thinking this is only statute barred for court ordered CM and does not apply to CMS arrears?



Edited 1 time(s). Last edit at 08/08/2017 10:09AM by Bubblegum.
Re: Interest on unpaid maintenance:
davidterry - 08 August, 2017 10:14AM
To be perfectly honest I don't know what the CMS rules are. That whole system is designed to exclude lawyers so I don't claim to be familiar with the details of those rules. However, for court ordered maintenance there is very definitely a 12 month bar.

Government organisations frequently don't follow the rules that apply to the rest of us. For instance, the fee to issue a divorce petition went up over time from £160 to £550. The 'statutory' rate of interest at 8% dates from the days of high inflation but has not been adjusted in my memory. I suspect the CMS would regard 12 months as far too short a time for them to do anything so it would not surprise me that they had a different time limit (if indeed they have one).
Re: Interest on unpaid maintenance:
Bubblegum - 08 August, 2017 10:34AM
Thank you for the reply Mr Terry.
I just had a momentary panic as I'm still owed £8k over the last 6 years. But luckily it is through the CMS.

I managed to find this on [www.citizensadvice.org.uk]

"Time limits to enforce child maintenance arrears
There is usually no time limit within which the CSA or CMS can collect child maintenance arrears. However, no liability order could be granted from 12 July 2006 for maintenance due before 12 July 2000."

PHEW!
Re: Interest on unpaid maintenance:
Shepherd - 15 August, 2017 01:04PM
The CMS is not fit for purpose. The information you get differs from person to person. I asked them about collecting the arrears that are due to me; the person I spoke to said that they would not collect arrears that were over 12 months old.
Re: Interest on unpaid maintenance:
davidterry - 17 August, 2017 06:13PM
>>I asked them about collecting the arrears that are due to me

There is no reason why the CMS should pursue arrears of maintenance that have accrued under a court order unless CMS was the beneficiary of the court order.
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