The House of Lords has published its report to Parliament on 14th October 2025 seeking reform to various aspects of child maintenance.
The statutory body primarily charged with responsibility to conduct assessments and to enforce the assessments is the Child Maintenance Service. This service has been previously known by various other names since it began in 1991 and the whole statutory child maintenance scheme has undergone several key changes over that period.
The current formula-based method of calculating child maintenance is around 20 years old and is considered by this report as being outdated and in need of reform.
The previous Government have also carried out consultations in relation to changes to the Child Maintenance Service (CMS) and the current Government has also committed to consult of changes to the way child maintenance is calculated by the CMS later this year.
The House of Lords report examines the problems with the CMS particularly in the way maintenance is calculated and whether or not this fundamentally undermines the principle behind the CMS’s work. The report contains various recommendations for practical improvements.
Direct Pay
One of the current methods and perhaps the most favoured method of child maintenance collection is by the Child Maintenance Service encouraging parents to use the “direct pay” method. This scheme provides a payment schedule with the actual physical payments arranged privately between the parents with no CMS admin fees attached. That is the incentive to both the paying and the receiving parent to use that particular service.
There is some evidence that 5% of parents who remained with the direct pay arrangement after 13 months did not receive all or most of their child maintenance from the paying parent and 20% did not receive it on time. Some of this must be anecdotal evidence given the nature of the private paying arrangements and subsequent research published has indicated that only 60% of receiving parents report receiving all maintenance due.
Using direct pay does require a minimal interaction between parents when exchanging payments and bank account details. One of the key criticisms of this scheme has been the ability for it to be used as a tool for continuing abuse by one parent against the other. This is simply because the CMS does not actively monitor direct pay arrangements.
If direct pay fails as a system, it is open to either parent to apply to use the CMS lead “collect and pay” scheme.
The House of Lords report concludes that until the Government implements the Child Support Collection (Domestic Abuse) Act 2023 in full or acts on the outcome of its consultation to remove direct pay, victims and survivors of domestic abuse will continue to be at risk when using the service. Ahead of the promised removal of direct pay the House of Lords urge the Government to introduce, as a matter of urgency, the necessary legislation that would enable a parent who has experienced domestic abuse from the other to move immediately onto collect and pay arrangement instead.
Issues with the calculation formula
The current Government has acknowledged that the calculation method is over 20 years old and is “due for an overhaul”. It is felt that changes need to be made to the calculation to ensure it’s far ranging enough to work for all parents, but it also remains fair. When the Family Court has jurisdiction to deal with child maintenance (largely when the CMS’s own jurisdiction is exhausted), the child maintenance agreements/orders primarily focus on the needs of the child. This is because the courts have a needs based approach to most cases. Court orders can do what needs to be done to ensure that a child’s needs are met, taking into account the financial status of each parent. This is a key difference as to the child maintenance “formula based” approach.
It is well known that many parents find the formula based approach of the CMS calculation difficult to comprehend and do not quite understand how the child maintenance assessment was arrived at, including a lack of understanding as to what information was used by the Child Maintenance Service to calculate the assessment. There is, therefore, a perceived unfairness of the system, and The House of Lords report recommends that the Government should instead focus on the needs based approach when reforming how the CMS calculates maintenance.
One of the specific issues behind calculations is that the CMS will draw on the most recent tax return that a paying parent would have filed with HMRC. This can often be many months beforehand and can work unfairly for either parent given the long gap in time.
There is a proposal to instead use the HMRC “real time information” system. This system provides HMRC with real time payroll information for PAYE employees. The CMS can use this system for variation applications but they don’t use it when carrying out their initial assessment.
This data is therefore readily available for a large number of paying parents who are PAYE to have accurate calculations generated instead of an assessment being based on income, which may have considerably and materially adjusted from a tax return made many months earlier.
One of the issues with the current variation regime, and previous incarnations of the variation regime, were that they were not well publicised and the processes can be difficult for some parents to navigate. At a certain level variation applications may become far more legalistic and dependent on tribunal decisions rather than being a more straightforward mechanism. There is also a current rule relating to changes in income whereby the Child Maintenance Service can only review a maintenance calculation if the paying parent’s income changes by at least 25% during 12 months from the date of the assessment. This can impact both parents as if an income falls by 24.9%, there is no ability for the paying parent to apply for a reduction, and likewise if their income increases by 24.9%, there is no way of the receiving parent to apply for an upward variation until the passage of 1 year has passed.
Conclusion
The House of Lords report concludes with the following invitation to the Government:
- The Government’s review should ensure that the calculation method is guided by a child-centric principle.
- The Government should consider closing loopholes for paying parents to lower their liabilities.
- To review the 25% threshold for changes to an agreement.
- Taking a wider range of near real time earnings into the initial maintenance assessment.
- To look at the affordability of calculations in light of outdated rates and legislation.
There is much work to be done in the reform of this area. The current formula-based regime was introduced to simplify arrangements. It has achieved this, but at a cost of hardship in some cases, as well as a perceived or actual difficulty to get to the bottom of the facts and figures behind a maintenance calculation.
It is hoped that when the Government announce their review, these issues will all be properly addressed, so there is a rebalancing and a perception of fairness on the part of both parents.
If you wish to discuss any issues in relation to child maintenance, please contact the Family Team at Fisher Jones Greenwood who will be able to assist.
How can we help?
Richard Busby is a Partner in our Family Law team.
If you’re concerned about financial disclosure requirements, suspect your ex-spouse is hiding assets, need help completing your Form E, or require enforcement of court orders, our specialist Family Law team can help.
Our experienced divorce solicitors understand the complexities of financial remedy proceedings and will ensure your interests are protected throughout the process.
Please contact us on 08455 435 700 or via our online enquiry form.