Children: Maintenance
The question
To ask the Secretary of State for Work and Pensions, whether his Department has undertaken an impact assessment of the effect of calculating Child Maintenance Service payments on gross income on the financial wellbeing of paying parents in the last five years.
Answered by Andrew Western
The child maintenance liability is usually calculated as a percentage of a Paying Parent’s gross weekly income, unless they are on low income or benefits where they pay a flat rate of £7. Income information is taken directly from HM Revenue and Customs for the latest tax year available and applies to parents who are employed or self employed. This allows calculations to be made quickly and accurately.
On previous Child Maintenance schemes net income was used. When this was changed to gross income on the 2012 scheme, percentages were adjusted to reflect the change and keep liabilities broadly the same for a given level of income as they had been under previous schemes.
The Government has announced a review of the child maintenance calculation to ensure the formula encourages compliance and sustainable arrangements. Any changes made to the child maintenance calculation will be subject to public consultation, and if made, will require amendments to legislation so would be subject to Parliamentary scrutiny.
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