Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what assessment he has made of the effectiveness of the treatment of student loan repayments in child maintenance calculations, including: (a) the policy for treating compulsory student loan repayments differently from pension contributions; (b) the merits of reviewing the legislation and regulations to consider whether compulsory income-contingent student loan repayments should be taken into account when assessing income for child maintenance purposes, while distinguishing them from voluntary borrowing.

Child maintenance liabilities are based on a paying parent's gross income and taken directly from HM Revenue and Customs for the latest tax year available. This allows calculations to be made quickly and accurately. In line with the Government’s policy of encouraging pension saving, reasonable pension contributions made by paying parents are deducted from the gross income used to calculate their child maintenance liability. Where pension contributions are considered excessive, they may be taken into account through the variations regime.

The Department has conducted a review of the child maintenance calculation. This focused on ensuring the calculation strikes the right balance between both parents to encourage willing and able compliance, with the aim of securing more money for children. Following that review, we are focusing on reforms where there is a clear case for change, including reducing the income-change tolerance and bringing unearned income into the standard calculation.

The Government does not currently plan to change the treatment of student loan repayments within the child maintenance calculation.