Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what estimate he has made of the number of paying parents using (a) cash-based and (b) undeclared income sources to avoid maintenance payments; and what steps the Child Maintenance Service is taking to identify hidden earnings.

The Child Maintenance Service (CMS) focuses on maximising compliance and identifying hidden earnings through measures such as datasharing with HMRC.

Information about the paying parent's gross income is taken directly from HM Revenue and Customs (HMRC) for the latest tax year available. This allows calculations to be made quickly and accurately. Use of historic income ensures a stable calculation, which we know from customer feedback is valued as it enables parents to rely on maintenance for financial planning purposes.

In the event a receiving parent believes a paying parent’s earnings are not captured in the standard calculation using HMRC gross income data, they can apply for a variation, under which certain other categories of income can be considered.

Cases where CMS have reason to believe paying parents maybe hiding their income can be investigated by the Financial Investigation Unit. This is a specialist team which can request information from financial institutions (such as banks, investment companies and mortgage companies) to check the accuracy of information that the CMS is given. If any discrepancies are found, they can implement a correct maintenance liability that is supported by CMS legislation.