Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what assessment the Child Maintenance Service has made of the potential merits of reducing the threshold for unearned income for paying parents from £2,500 to £1,000 in line with HMRC’s annual tax-free allowance.

The threshold for unearned income was originally set at £2,500 to ensure that this represented a significant source of a paying parent’s total annual income. This ensures that minor changes in unearned income do not interfere with the efficiency of the system, increasing costs for the taxpayer.

A review is currently ongoing to look at the child maintenance calculation to ensure it is fit for purpose. Unearned income, including the current threshold, falls within the scope of this review.