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The child support agency is to employ private debt collectors to recover money from parents who fail to pay child support.
The BBC reports that the private firms would be able to keep a proportion of the £3 billion worth of debts they collect.
Under new plans being drawn up by ministers the Inland Revenue would take over the task of collecting regular payments while private firms would collect arrears.
The Liberal democrat work and pensions spokesman David Laws said he had concerns about where parents' money would go.
"Is that profit going to come from the money that would otherwise come to children?" he told the BBC.
Mr Laws said as much as ten or 15 per cent could be "lopped off" in profit.
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