Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what assessment her Department has made of the potential impact of the current Child Maintenance Service income-based model on middle-income paying parents.
The Child Maintenance Service operates on the principle that both parents have financial responsibility for their child, including their food and clothing, as well as contributing towards the associated costs of running the home that the child lives in. For a paying parent working full time on the UK minimum wage, they will pay 12% of their gross weekly income for one child, 16% for two and 19% for three or more. Those proportions remain constant for all paying parents earning a gross weekly income of between £200 and £800.
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. Any income subject to income tax including bonuses and overtime received by an employed paying parent, is included within their gross weekly income when calculating a child maintenance liability.
The Government is conducting a review of the child maintenance calculation to make sure it is fit for purpose. This includes updating the underlying research and considering how to ensure the calculation reflects current and future societal trends.
Options for proposed reforms are currently being considered. Any changes made to the child maintenance calculation will be subject to extensive public consultation, which we plan to publish late this year, and if made, will require amendments to legislation so would be subject to Parliamentary scrutiny.