Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what steps she is taking to ensure that there is clear understanding within (a) her Department and (b) employers of which payments and benefits from employers are treated as income for the purposes of child maintenance calculations.

CMS staff have a clear understanding of what is classed as income from training and internal guidance.

With regards to employers, income included in the basic child maintenance calculation is the same as that used in HMRC calculations of taxable income. There is therefore no requirement for employers to make additional or separate reports of income for child maintenance purposes as the CMS take this information directly from HMRC, and therefore no requirement for employers to understand what constitutes income for child maintenance purposes. In cases where the CMS request ongoing child maintenance payments are deducted directly from salary, this is done by issuing a Deductions from Earnings Order (DEO). When a DEO is served, the CMS provides the employer with the precise figure to be deducted.

However, this does not cover all income that an employer may pay an individual. Where a paying parent is the director of their limited liability company, they are legally an employee of that company and are treated the same as any other employee for child maintenance purposes but may receive additional income as a result of their employment status, for example, dividends, which are not routinely included in the standard child maintenance calculation. In these circumstances, this income is only included within the calculation if the receiving parent in the case applies for a variation.

Caseworkers are fully supported in processing variation applications through training and internal guidance.