Source · Select Committees · Public Accounts Committee
Recommendation 29
29
The amount Paying Parents pay is based on a means tested calculation set out in...
Conclusion
The amount Paying Parents pay is based on a means tested calculation set out in primary legislation. This applies different rates above certain earnings thresholds that is higher for those on higher incomes and a flat rate of £7 a week for those with the lowest income. The Department has not updated these earnings thresholds since they were set in 1998. In practice, this means that parents now pay child maintenance on much lower incomes than was originally intended. The Department told us that updating the earnings bands was a policy question, and the bands were considered to still be appropriate when the calculation was last considered as part of new legislation in 2008.63
Government Response
Not Addressed
HM Government
Not Addressed
7. PAC conclusion: The Department’s ability to collect child maintenance is limited by the affordability of payments and the system risks creating a poverty trap for some Paying Parents. 7. PAC recommendation: As part of its Treasury Minute response, the Department should set out its plans to review the affordability of Child Maintenance Payments and the appropriateness of the current award calculations, including the earning thresholds. 7.1 The government disagrees with the Committee’s recommendation. 7.2 As referenced in paragraph 6.5 of HMT guidance, Parliamentary scrutiny of public spending, the department cannot set out its plans to review the affordability of liabilities in its response to the Committee as this relies upon a policy decision. 7.3 However, the department is considering its plans to review the affordability of Child Maintenance Payments and will update the Work and Pensions Committee in due course.