Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what investigations are undertaken by the Child Maintenance Service into paying parents who are suspected of having undeclared income.

Where a paying parent changes jobs, The Child Maintenance Service (CMS) uses real-time information from HMRC where available, to quickly identify new employment and adjust maintenance calculations accordingly.

People who are self-employed are required to keep accurate records of their business income and expenses for tax purposes. HMRC can charge penalties for inaccurate reporting where it results in tax being unpaid.

Where the information available from HMRC does not give rise to a liability which accurately reflects what a customer believes a paying parent should be paying, the customer can seek a Variation. Variations allow the CMS to look at some circumstances which are not covered by the basic maintenance calculation. A variation can be requested on grounds of diversion of income. This is when the paying parent may be able to control the amount of income they receive. This includes diverting income to another person or for another purpose (including excessive pension contributions).

When income used to calculate the child maintenance assessment is disputed outside of the normal business as usual process, this can be referred for investigation by the Financial Investigation Unit (FIU), whose function is ensuring financial correctness of Child Maintenance assessments. Cases involving complex income can also be investigated by the FIU. This specialist team can request information from financial institutions to check the accuracy of information the CMS is given.

Where the FIU establishes that potential offences contrary to the Child Support Act 1991 have been committed, the case is submitted to the Crown Prosecution Service to make a decision regarding the viability of prosecution/conviction. The CMS is committed to prosecuting where it is in the public interest to do so, whilst balancing the welfare of all children involved in a maintenance assessment.

The FIU and HMRC are developing a new partnership to explore better intelligence sharing and joint working.

We are currently reviewing FIU work with a view to improving performance.

Furthermore, subject to securing primary legislation, we plan to remove Direct Pay and move to a single CMS service. This will enable the CMS to monitor all payments, respond more quickly to non-compliance, and better support victims and survivors of domestic abuse by removing the need for contact between parents and reducing the burden of reporting missed payments.