Children: Maintenance
The question
To ask the Secretary of State for Work and Pensions, what assessment he has made of whether the child maintenance calculation accurately reflects the costs incurred by the parent with primary day-to-day responsibility for a child.
Answered by Andrew Western
The child maintenance calculation amount is usually calculated as a percentage of the paying parent's gross income and sourced directly from HM Revenue and Customs (HMRC) for the latest tax year available. That calculation can be adjusted to reflect certain circumstances, for example where the paying parent has overnight care of the child, or if they have other income or assets that could be taken into account. Paying parents on very low incomes or on certain benefits pay a flat rate of £7 per week.
Following a review of the child maintenance calculation, we plan to include unearned income such as rental income, investments and dividends within standard calculations, ensuring liabilities better reflect parents’ full financial circumstances and that children benefit from all sources of income. We also plan to reduce the income tolerance (the change in income needed before a change to the calculation for a given year is permitted) from 25% to 15%, so changes in a paying parent’s income are reflected more quickly rather than waiting for the annual review, helping keep assessments fair.
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