Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what recent steps he has taken to improve the accuracy of the information collected on parent finances by the Child Maintenance Service.

As a principal part of the service design the Department uses data from HM Revenue & Customs (HMRC) and its own benefits data to assess 91% of Paying Parents earned income and benefit status, which are key parts of the maintenance calculation. We also receive evidence of income directly from Universal Credit where a customer is in receipt of Universal Credit with earnings.

Primarily, calculations are based on historic income amounts from the latest available tax year, provided via interface by HMRC, where a complete tax year is available within the last 6 years. Where historic tax year information is unavailable, or a customer requests a supersession on the basis that PP income is 25% different from the historic amount, we have two routes based on the PP employment circumstances:

• Where a customer is employed, we directly interface with Real Time Information (RTI) to obtain real time evidence of a customer’s current income.

• Where a customer is self-employed, we require a fully complete and verified Self-Assessment Tax Return, of a more current tax year than that provided previously by HMRC. This negates mid-year changes for Self Employed customers as self-employed income can fluctuate from month to month.

Where a paying parent receives unearned income which can be legally considered in assessing child maintenance either parent can request a variation to the normal maintenance calculation. Cases involving suspected misrepresentation or fraudulent behaviour can be investigated by the Financial Investigation Unit (FIU). This is a specialist team which can request information from financial institutions to check the accuracy of information the Child Maintenance Service (CMS) is given.

Where a change to current income is applied, CMS will further verify this against HMRC evidence at Annual Review, and again at a Periodic Current Income Check (+11 months from change to Current Income) to re-verify the income evidence with RTI. This provides comprehensive assurance as it is independent of the Paying Parent and directly interfaces with HMRC, reducing the opportunity for misrepresentation or inaccuracies. We have increased the proportion of changes where we automatically interface with RTI, including changes instigated by Receiving Parents.

In October 2023, the Government announced intentions to introduce legislation so that unearned income can be taken into account automatically when the maintenance calculation is made to ensure a paying parent’s maintenance calculation reflects their ability to pay. We are currently engaging with stakeholders on how best to implement this.

The National Audit Office accuracy figures are published on their website and confirm CMS achieved better than 99% for the last 6 years (2016/17 to 2021/22) however, they are still auditing 2022/23 accuracy.