A £25,000 Tax-Free Personal Allowance Won’t Fix Child Maintenance, However It Exposes Why Reform Can No Longer Wait
- Deanna Newell
- 2 days ago
- 4 min read
By Deanna Newell
Founder - DN Family Law
The Prime Minister’s proposal to consider increasing the personal tax-free allowance from £12,570 to £25,000 could be welcome news for millions of workers, families and small business owners by allowing people to keep more of what they earn could ease financial pressures during the cost-of-living crisis.
DN Family Law supports measures that help hardworking people.
However, this announcement also shines a spotlight on a much bigger issue — one that successive governments have failed to address.
The Child Maintenance Service (CMS) is no longer fit for purpose when assessing many parents with complex financial arrangements.
Children Are Paying the Price
Across the UK, some company directors, shareholders and self-employed individuals have financial circumstances that are more complex than a straightforward PAYE salary.
Because CMS assessments are primarily based on gross income reported to HMRC, they may not always reflect a parent’s wider financial circumstances where those finances are more complex.
For two children, maintenance can sometimes be around £167 per month — that is approximately £83 per child.
Ask yourself one question; What child’s needs can be met with £83 a month?
That amount may not even cover school meals for a month, let alone clothing, transport, housing, school trips, energy costs or the additional expenses faced by many families raising children with SEND.
Children do not become cheaper to raise simply because a parent’s finances are structured differently.
The Problem Isn’t Tax, It’s Transparency
Increasing the personal tax-free allowance to £25,000 could reduce income tax for many workers. If someone genuinely earns £25,000, their child maintenance assessment would generally increase because CMS calculations are based on gross income rather than the amount of tax paid.
That could benefit both the paying parent and their children.
However, the proposal does not address the wider issue.
The real challenge is ensuring that, where appropriate and supported by evidence, maintenance assessments reflect a parent’s genuine financial capacity rather than relying primarily on one declared income figure.
Follow the Money, Not Just the Salary
Children deserve a system that asks:-
“What is this parent’s genuine financial capacity to support their child?”
And not simply,
“What salary has been declared?”
Modern finances can include:-
Employment income
Self-employment income
Company ownership
Dividends
Retained company profits
Property interests
Investments and other financial resources
While many business owners fully comply with their legal obligations, some cases involve financial arrangements that are more complex than a single salary.
Where there is evidence that declared income does not reflect a parent’s wider financial circumstances, the Child Maintenance Service should have the ability to carry out proportionate additional assessment.
A Three-Tier Family Justice Triage System, Reform That Works
Alongside any increase in the personal tax-free allowance, the Government should pilot a Mandatory Three-Tier Family Justice Triage Assessment Framework, beginning with the Child Maintenance Service.
Not every family entering the Family Justice System has the same needs.
Some cases are straightforward. Others involve:-
Domestic abuse
Coercive control
Financial and economic abuse
Complex income structures
Self-employment and company ownership
Safeguarding concerns
Disputed child arrangements
Children with additional needs, including neurodivergence
A one-size-fits-all approach cannot identify complexity early enough.
Tier 1 – Standard Assessment
Straightforward cases with clear financial information and no significant safeguarding concerns should continue through a standard assessment, allowing quicker decisions and reducing unnecessary delays.
Tier 2 – Enhanced Financial and Family Assessment
Where there are indicators of complexity, a more detailed assessment should be undertaken. This may include consideration of:-
Company ownership
Self-employment
Dividends and retained profits
Significant differences between declared income and wider financial circumstances
Domestic abuse
Coercive control
Financial and economic abuse
Safeguarding concerns
Children with additional needs
The purpose is not to assume wrongdoing. It is to ensure that decisions affecting children are based on the fullest and most accurate understanding of the family’s circumstances.
Tier 3 – Court and Multi-Agency Review
The most complex cases should receive coordinated oversight involving the Family Court, Cafcass, the Child Maintenance Service, HMRC and other relevant agencies where appropriate.
This would help ensure that safeguarding, financial transparency and children’s welfare are considered together rather than in isolation.
Earlier Identification Saves Harm
A Three-Tier Family Justice Triage System could support the earlier identification of:-
Domestic abuse
Coercive control
Financial abuse
Economic abuse
Safeguarding concern.
Early assessment would allow families to receive appropriate safeguarding, specialist support and better-informed decision-making before disputes escalate.
Where supported by evidence, assessments should also consider whether financial disputes, child maintenance issues and child arrangements form part of a wider pattern of coercive or controlling behaviour.
For example, where evidence suggests that a child’s relationship with one parent is being unnecessarily restricted, or overnight care arrangements are disputed alongside financial matters, decision-makers should be able to consider the wider context.
This is not about assuming improper motives by either parent. It is about ensuring that, where financial and child arrangement issues appear to be interconnected, they are assessed together while keeping the child’s welfare as the paramount consideration.
Why Pilot the Framework?
The Government already uses pilot programmes to test reforms in other public services before introducing national change.
Family justice deserves the same evidence-based approach.
A pilot programme would allow Government to determine whether a Three-Tier Family Justice Triage System:-
Identifies complex cases earlier
Improves safeguarding outcomes
Strengthens financial transparency where appropriate
Reduces unnecessary delays and conflict
Improves collaboration between CMS, HMRC, Cafcass and the Family Courts
Delivers fairer outcomes for children
A Message to the Prime Minister
Prime Minister,
If your Government believes increasing the personal tax-free allowance to £25,000 will help working families, then please seize this opportunity to reform the Child Maintenance Service at the same time.
Tax reform and Child Maintenance reform should go hand in hand.
Pilot a Mandatory Three-Tier Family Justice Triage Assessment Framework.
Strengthen financial transparency.
Ensure that complex cases receive the level of assessment they require.
Build an evidence base for lasting reform.
Most importantly, create a Child Maintenance Service that reflects the realities of modern family life and puts children at the centre of every decision.
Children deserve financial support based on a parent’s genuine ability to contribute.
Family justice begins with financial fairness.
It is time to follow the money trail.
It is time to put children first.
Deanna Newell | Founder | DN Family Law
#ChildMaintenanceReform #FamilyJustice #ThreeTierTriage #FinancialTransparency #ReformThatWorks #ChildrenFirst #DNFamilyLaw
Deanna Newell | Founder | DN Family Law
Advocacy for truth-tellers, survivors, and the children who deserve better
