Cost of living crisis could drive a wedge into…
A positive shake-up of legal aid financial eligibility criteria risks being undermined by a failure to account for spiralling inflation, according to independent research.
31 May 2022
The proposals
The Department for Work and Pensions (DWP) is consulting on changes to modernise and improve the Child Maintenance Service (CMS).
The proposals include:
- legislating to include unearned income not currently captured in the child maintenance calculation
- making amendments to allow self-employed income changes outside of the annual review, where there has been a loss of income, and a new tax return reflecting the loss of income has not yet been submitted to HM Revenue and Customs
- allowing the CMS to extinguish small volumes of low-level child maintenance arrears in specific circumstances
- placing a responsibility on the CMS to lodge a claim directly with insolvency practitioners
Our view
While we appreciate the need for the CMS to review and modernise its practices, we do not think that some of these proposals address the pain points in the system.
For example, although we agree that unearned taxable income should be included in a paying parent’s CMS calculation, we believe that the CMS should review all schedules of a tax return in order to determine gross income when reaching a decision about their liabilities.
We do not support the proposal to re-assess a maintenance calculation where a self-employed parent’s income has changed before the end of the relevant tax year.
In our view, paying parents are only likely to report when they experience a reduction in income, and not when things even out financially.
Although we do support the proposal to extinguish low-level debt, we do not agree that the maximum limit for this should be £6.99 when the vast majority of arrears are over this threshold.
Next steps
The consultation closes on Friday 6 August.
The CMS will review responses before publishing its response.