Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what steps he is taking to ensure that the Child Maintenance Service is able to identify hidden earnings.

Where a paying parent changes jobs, the Child Maintenance Service (CMS) uses real-time information from HMRC where available, to quickly identify new employment and adjust maintenance calculations accordingly.

People who are self-employed are required to keep accurate records of their business income and expenses for tax purposes. HMRC can charge penalties for inaccurate reporting where it results in tax being unpaid.

Where the information available from HMRC does not give rise to a liability which accurately reflects what a customer believes a paying parent should be paying, the customer can seek a Variation. Variations allow the CMS to look at some circumstances which are not covered by the basic maintenance calculation. A variation can be requested on grounds of diversion of income. This is when the paying parent may be able to control the amount of income they receive. This includes diverting income to another person or for another purpose (including excessive pension contributions).

Cases involving complex income can be investigated by the Financial Investigation Unit (FIU). This is a specialist team which can request information from financial institutions to check the accuracy of information the Child Maintenance Service is given.