Deduction from Earnings Orders – Consultation on reducing deadline for making payments to CSAMonday, December 8th, 2008
In mid-November, HMRC wrote to all of the payroll system developers, inviting them to comment on a letter from the Child Support Agency (CSA). The letter was a short-term consultation on proposals to reduce the period of time allowed for employers to pay over monies collected under Deduction of Earnings Orders (DEOs).
The proposal in the letter, originating with the new Child Maintenance and Enforcement Commission (CMEC), is as follows:
“At present, legislation allows employers until the 19th day of the month following the imposition of the deduction order, to transfer the child maintenance to the Child Support Agency. This often results in unnecessary delays in child maintenance reaching the children who need it.
We are considering reducing the length of time allowed to transfer deductions to the Agency, to speed up the collection and payment of child maintenance. At present, child maintenance deductions can remain with employers for some considerable time after the deduction has been taken. While we have yet to make any final decisions, our favoured approach is to change the legislation to state that the DEO payment must reach the Agency within 7 days following the deduction being made by the employer, rather than an absolute deadline in the following month.
We are keen for your views on the viability of this proposal, and particularly if there are any significant procedural, IT, payroll software or cost implications.”
It is not clear whether DWP intends to consult employers and employer representatives on this significant change. There does not appear to be any reference on the proposals on the websites of the DWP, CSA or CMEC. It is to be hoped that DWP will consult thoroughly with employers before imposing a statutory change.
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