Parents who miss maintenance payments may soon find their access to credit affected. Ayanda Ndimande, Head of Business Development at Sanlam Credit Solutions, takes a closer look at new enforcement measures.

The Department of Justice has introduced a new policy whereby a parent who falls behind in maintenance support could have their access to credit negatively affected.

The policy comes as the country sees up to 70% of parents defaulting on maintenance payments within the first two years of court orders.

While we’re still waiting for details on how the new policy will be enforced, it’s clear that failing to pay maintenance on time could lead to denied credit or lowering of one’s credit score.

What we know about the new policy

The new maintenance enforcement mechanism was made possible by a Memorandum of Understanding (MOU) signed by the Department of Justice, the Consumer Profile Bureau and the Social Justice Foundation.

It allows for the details of parents who miss maintenance payments to be shared with credit bureaus, making it harder for them to access credit, and, potentially, leading to credit applications being denied. This aligns with global trends of holding parents and guardians accountable through financial penalties.

Advocate Sankie Morata, Chief Executive of Sanlam Trust, points out that the financial penalties will also extend to deceased estates. If a defaulting parent passes away before fulfilling their court-ordered financial obligations to their children, the children or their guardians can sue the parent’s estate for the outstanding amount. This becomes a valid claim against the deceased estate.

How divorcees can plan for the credit changes

Divorce can be a major ‘life disruptor’ causing considerable financial change. If you’re responsible for paying maintenance after a divorce, it’s a good idea to work with a trusted financial adviser to review your financial planning in the context of your holistic financial responsibilities.

Download your credit report to get an overview of all your credit activity. This gives you a starting point to spot debit orders or store accounts you no longer need, and ensure all your information is correct.

If you’re considering taking on more credit, work with an adviser or a credit coach to see how much this will stretch you. Can you still comfortably afford monthly maintenance obligations when factoring in loan repayments? Work out what you can realistically afford and avoid taking on more debt if it could leave you financially stressed.

You don’t want to compromise your credit score, credit worthiness and future credit applications, so make sure you make a plan to fulfil your maintenance obligations.

This post was based on a press release issued on behalf of Sanlam Credit Solutions.