UK Government responds to open letter urging child maintenance reform

Dear Satwat,

Thank you and your co-signatories for your letter of 25 March to the Prime Minister about the Child Maintenance Service (CMS). I am replying as the Minister responsible for the CMS and apologise for the delay in doing so. The Department is actively looking at ways to improve and streamline our correspondence process.

I have set out below the Government’s response to the key points in your report, but I want first to take the opportunity to thank you and your colleagues for all the work you have done on this project. I have found my meetings with OPFS, Fife Gingerbread and IPPR Scotland helpful and stimulating and I know the CMS has benefited from this work and continued engagement.

Transform the Child Maintenance Service (CMS) with a universal payment platform for all families and the removal of fees, so it works as a first resort, not a last.

As you will be aware, the CMS operates on the principle that both parents have financial responsibility for their child, including their food and clothing, as well as contributing towards the associated costs of running the home that the child lives in.

Currently, the CMS collects information about the paying parent’s gross income directly from HM Revenue and Customs (HMRC) for the latest tax year available, which allows calculations to be made quickly and accurately. Any income subject to income tax, including bonuses and overtime, received by an employed paying parent, is included within their gross weekly income when calculating a child maintenance liability. Child maintenance is reviewed annually, or when there are significant changes to the circumstances of the case, to make sure it is in line with the parent’s circumstances.

The rationale and policy considerations for the child maintenance calculations process are included in the Impact Assessment to the Child Support Calculation Regulations 2012. Further information can be found at:

www.legislation.gov.uk/ukia/2012/163/pdfs/ukia_20120163_en.pdf

In terms of fees, you may be pleased to know that in our response to the consultation, we have proposed a reformed fee structure, as follows:

• 2 per cent for receiving parents, deducted from maintenance received;

• 2 per cent for compliant paying parents in addition to their calculated maintenance amount; and

• maintaining the 20 per cent rate for non-compliant paying parents, in addition to their calculated maintenance amount.

We believe fees are an important part of the service and serve an important purpose to offset the investment needed to make the reforms and contribute to the cost of using enforcement powers to re-establish compliance and reduce the burden on the taxpayer.

Provide support outside the CMS so that parents can get the right help at the right time.

To address this point, the Government’s priorities around tackling child poverty, it is absolutely right that we continue to strengthen the support available to separated parents, helping them to make the arrangements that are right for their families, whether that is a family-based arrangement or through the CMS. The CMS has been, and will remain, proactive in raising its profile and ensuring parents know what support is available.

Family Hubs administered by local authorities provide a safe space for parents to seek support on a wide range of issues. Where support is not available for separating parents seeking advice on child maintenance services through a local authority Family Hub, we would signpost parents to the relevant services.

Ensure that the child maintenance formula is fair and up to date, reflecting real living costs.

The Department has conducted a review of the child maintenance calculation. This review focused on ensuring the calculation strikes the right balance between both parents to encourage willing and able compliance, with the aim of securing more money for children.

Following the review, we plan to take forward a set of changes to reflect a renewed commitment to ensuring that the child maintenance system delivers for the families who rely on it most. We plan to reduce the income tolerance from 25 per cent to 15 per cent. Currently, a calculation can be amended outside of an annual review where a paying parent’s current income is at least 25 per cent different from their historic income. The proposed change will mean that changes in income are captured more quickly, and assessments remain fair for both parents.

We will also commit to including unearned income within the standard calculation, to ensure that when parents receive income from other sources such as rental income, investments, dividends, and other non-PAYE sources, their children also benefit from this income as a matter of course. This change will ensure liabilities more accurately reflect parents’ full financial circumstances and has received broad support from stakeholders and parents.

We looked at whether more significant changes to the child maintenance calculation, including changes to the rates and thresholds, would deliver the intended improvements in fairness and compliance. After carefully considering this research and wider evidence, it is evident that the case for proceeding with such large-scale change currently is not sufficiently strong.

Make the social security system work better for separated families, recognising that child maintenance is not the only anti-poverty tool.

Tackling child poverty is at the heart of this Government’s mission to break down barriers to opportunity and give every child the best start in life. The Child Poverty Strategy sets out a range of measures that will support parents and families by boosting their incomes, driving down the cost of essentials, and strengthening local support.

We have removed the two-child limit in Universal Credit, lifting 450,000 children out of poverty by the end of this Parliament, rising to around 550,000 alongside other measures set out in our Strategy, such as the expansion of free school meals to all families on Universal Credit.

We have already taken substantive action across major drivers of child poverty, including an expansion of free school meals, rolling out free Breakfast Clubs, and a £39 billion investment in social and affordable housing. We have also introduced a new Crisis and Resilience Fund in England from 1 April 2026, enabling local authorities to provide preventative support and respond to financial hardship.

Alongside this, we are committed to reviewing Universal Credit to make sure it is doing the job we want it to do, to make work pay and tackle poverty. We have already taken steps to help those in need. Since April 2025, the Fair Repayment Rate allows around 1.2 million low-income households to keep around £420 more a year. From April 2026, we delivered the first sustained above-inflation increase in the Universal Credit standard allowance, benefiting nearly four million households by around £760 a year in cash terms.

Providing the right employment support can help parents progress in work. That is why the UK Government is driving forward labour market interventions that will deliver a step-change in support and help parents to enter and progress in work.

Since September 2025, eligible working parents of children from 9 months old living in England have been able to access 30 hours of Government-funded childcare. Working parents on Universal Credit can receive 85 per cent of childcare costs and 100 per cent of any upfront costs, and we announced that childcare support through Universal Credit would be extended to help with the childcare costs for all children, rather than being capped at two.

I hope this is helpful. Thank you once again for your work and your keen interest in this policy area.

Yours sincerely,

Baroness Sherlock OBE
Minister of State at the Department for Work and Pensions