Source · Select Committees · Work and Pensions Committee
Recommendation 7
7
Accepted
Paragraph: 40
Assign specialist caseworkers to complex self-employment and non-earned income child maintenance cases.
Conclusion
Cases are complex where the paying parent’s income is from self-employment or non- earned income. To ensure that a fair arrangement is reached for both receiving and paying parents in these circumstances, a specialist caseworker should be assigned to such cases supported by clear guidance on identifying income sources.
Government Response Summary
The government stated that complex earnings (like unearned income) are currently handled through caseworker intervention or referred to a specialist financial investigation unit. It is planning to include unearned income in the initial calculation using HMRC data, which aims to automate and safeguard against misstatement, thereby improving the process of identifying income sources.
Paragraph Reference:
40
Government Response
Accepted
HM Government
Accepted
The Department legally relies on 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. This makes it difficult for most parents to misstate their income. Receiving Parents can also ask the Department to consider the Paying Parents more complex earnings, such as unearned income. Currently unearned income, for example savings and investment income, dividend income and property income, is only included in the child maintenance calculation on request of a variation, requiring caseworker intervention to source the income from HMRC. Where Receiving Parents still have concerns around the income sources provided HMRC or any potential diversion of income, these can be referred to a specialist unit for financial investigation. The Department is planning to include any unearned income in the initial calculation using the same interface and legislative controls as all other types of income sourced from HMRC, thus increasing the proportion of cases where HMRC data safeguards against parents misstating their income. This was included in our consultation which was published on 18 June 2021. We received predominantly positive feedback from respondents. Partial deductions from Universal Credit