Using tax data for child maintenance – LITRG concerns remain
Draft regulations set out how the Government intends to base the new system of calculating child maintenance on tax data obtained direct from HM Revenue and Customs. LITRG is concerned that there will be gaps in the data and that child poverty could increase as a result.
In January 2011, the Department for Work and Pensions published a Green Paper entitled Strengthening families, promoting parental responsibility: the future of child maintenance. Our response to that consultation reiterated a number of concerns we had raised back in 2008 when the changes to the system were first being proposed.
Unfortunately, the detailed regulations published on 1 December 2011 do not allay our fears in the slightest and our calls for discussions on the proposals have not been heeded.
Our response therefore recommends that a working group is urgently established to discuss the issues that remain around the use of HMRC data before the draft regulations are finalised.
HMRC are in the midst of a major change to the PAYE system with the introduction of Real Time Information (RTI) with effect from April 2013. The 2008 legislative changes to child maintenance, moving to “gross” instead of “net” income, have arguably been overtaken in 2012 by the development of RTI which collects both “gross” and “net” sums. Also, this now appears to be out of step with the “net” income basis envisaged for Universal Credit.
We believe that a detailed examination of the interfaces between the proposed child maintenance regime and RTI is essential. We also do not believe that sufficient attention has been paid to how the PAYE system currently works, with the consequence that income sources may be omitted or even double-counted.
If our calls for a detailed review are ignored now, we envisage significant problems down the line, one of which will be that the parents who are looking after the children (and ultimately the children for whom they are responsible) will not get the support they need.
The full response can be accessed via the link:
Contact: Kelly Sizer (please use form at http://www.litrg.org.uk/ContactUs)