Child maintenance: income in the CMS formula (including why gross income is used, and annual reviews)

Please note this briefing was last updated in December 2018. Up-to-date information can now been found in the Library Briefing Child maintenance: Calculations, variations and income (UK)

The non-resident parent’s gross weekly income is used to determine which rate of child maintenance they should pay and, if it is over £100 (but they are not in receipt of certain benefits or pension payments), the amount of child maintenance for which they are liable.

One feature of the 2012 scheme is that, in most cases, the CMS collates income data from tax returns submitted to HM Revenue and Customs (HMRC) – hence the change to gross weekly income in the current statutory scheme (from net weekly income used in the 2003 scheme). However, adjustments were made to the rates used to calculate child maintenance to compensate for this change.

This note considers how the CMS collates income data, the annual review process (and the periodic income check in cases where the non-resident parent submits their own data), and when a change in income does – and doesn’t – have to be reported to the CMS.

The note also highlights the policy rationale for the 25% threshold for a change in income to affect the child maintenance calculation, and why only the non-resident parent’s income is taken into account.

The definition of gross weekly income used by the CMS excludes payments into a pension, and further details on this matter including case law is set out in the final section of this note.

This note applies to Great Britain only (i.e. United Kingdom excluding Northern Ireland).