Source · Select Committees · Work and Pensions Committee
Recommendation 16
16
Accepted in Part
Paragraph: 77
Urge Government to analyse maintenance affordability and propose urgent changes within six months.
Recommendation
The unaffordability of maintenance for some parents is causing severe hardship and distress. It also forms a barrier to compliance. Updating maintenance levels and thresholds should therefore be seen as a priority. We recommend the Government completes its analysis of the affordability of maintenance payments and make proposals as an urgent priority no later than six months after our Report has been published.
Government Response Summary
The government accepts the need to update the child maintenance calculation due to affordability concerns and has begun a fundamental review and updated research, but does not commit to completing this analysis or making proposals within the recommended urgent six-month timeframe.
Paragraph Reference:
77
Government Response
Accepted in Part
HM Government
Accepted in Part
The child maintenance liability is designed to be fair for both parents whilst ensuring the paying parent contributes a reasonable amount of their income to support their children that they no longer live with. It represents an amount of money which is broadly commensurate with the amount a paying parent would spend on their children if they were still living with them, irrespective of the receiving parent’s income or assets. The calculation can take into account other factors such as other children the paying parent is responsible for, and costs associated with maintaining contact with their children. The government recognises the current pressures on the cost of living and that many paying parents are struggling financially. During the oral evidence hearing we indicated our intentions to conduct a fundamental review of the child maintenance calculation. This will include an assessment of the scope to include both parental incomes in a maintenance calculation as well as looking at banding and the shared care policy. The child maintenance rates are set out in primary legislation and as the Committee has noted, this makes it more difficult to adapt them in response to changes in living costs or to reflect societal changes. Consideration will be given to moving these into secondary legislation to allow them to be updated more readily. The CMS calculation is currently underpinned by research from the 1990s, and we accept that it is the right time to look at it again. We have begun the process to update this research and ensure we have a calculation reflecting today’s social trends but is also future proofed to handle further changes. We are reviewing the evidence on calculating the additional costs associated with children. We are also undertaking secondary analysis of survey data to see how the costs of children as a percentage of household income has changed over the past two decades. Any changes to the child maintenance calculation would require primary legislation, so if the review indicates that changes are necessary, this will be explored at the earliest opportunity.