Child Maintenance: The Parents That Panorama Didn’t Tell You About
Children don’t live on tax thresholds.
So why is the child-maintenance system still so heavily dependent on tax thresholds?
I was disappointed by the BBC Panorama programme Child Maintenance: Parents Under Pressure.
The programme rightly highlighted the enormous pressure that child-maintenance disputes can place on families. However it missed what I believe is one of the most important issues in the modern child-maintenance debate.
There was little focus on:-
Self-employed parents
Small-business owners
Company directors
Sole shareholders
The taxable income of parents in these categories may not necessarily tell the whole story of the financial resources available to them.
That omission matters.
Because while the programme explored parents struggling under the Child Maintenance Service, there is another group who can feel equally failed by the system;
Parents who are paying what the CMS system has calculated, however question whether the calculation accurately reflects the other parent’s circumstances.
This is not about attacking self-employed parents.
It is about asking whether the system is sophisticated enough to distinguish between genuinely low income and a financial picture that requires further investigation.
£12,570 is a tax threshold, not a cost of raising a child
The Government itself has acknowledged the scale of self-employment within CMS. It has previously stated that around 33,000 CMS paying parents were self-employed, with a further 13,000 having both employment and self-employment income.
CMS generally obtains income information from HMRC and uses taxable income in calculating maintenance for self-employed parents.
Here is the question that Panorama should have asked:
What happens when a parent appears year after year to have income around £12,570 — and yet continues to operate a profitable business?
To be absolutely clear, reporting £12,570 does not automatically mean that somebody has done anything wrong. A genuinely low-income self-employed person should not be treated as dishonest simply because they run a business.
However, neither should £12,570 become a figure that brings financial scrutiny to an automatic halt.
If there are credible indicators of business activity, company ownership, dividends, assets, property, expenditure or other financial resources, shouldn’t the system be capable of asking whether the taxable-income figure reflects the wider financial reality?
CMS already recognises the concept of “diversion of income” and has mechanisms allowing certain other financial circumstances to be considered.
Why isn’t this issue receiving much greater public attention?
Children cannot live on tax thresholds
£12,570 a year is approximately £1,047.50 a month before considering tax and other deductions. Such a tax threshold is not a realistic calculation of what it costs to raise a child. Children need:-
Food
Clothing
Shoes
Housing
Heating
Transport
Education
Activities
Technology
Healthcare, and;
The ordinary costs of growing up
And when the resulting maintenance payment is £83 per child per month, that deserves serious scrutiny. That is only £996 per child each year.
What does £996 provide for an entire year of a child’s life?
It does not come close to the real cost of raising a child.
The receiving parent inevitably carries the shortfall.
And ultimately, the children experience the consequences.
When £83 a month becomes part of a bigger pattern
We also need to stop looking at child maintenance in isolation.
If a parent is receiving only £83 per child per month, that does not automatically prove financial abuse. There may be legitimate circumstances in which a paying parent genuinely has very limited income.
However where a very low payment sits alongside a wider pattern of financial control, withholding, manipulation or deliberately restricting financial resources, the issue can become much more serious.
It can be part of coercive control, economic abuse or financial abuse.
Financial abuse does not necessarily end when a relationship ends.
For some parents, financial control can continue through disputes over maintenance, access to money, legal costs, housing and children’s expenses.
The question should therefore not simply be:
“How much does CMS say this parent owes?”
It should also be:
“What is actually happening financially to the children and the receiving parent?”
A CMS calculation of £83 per child per month may be technically correct based on the information available to CMS however if that calculation is based on an income figure that does not reflect the wider financial circumstances, the consequences can be devastating.
And where maintenance is deliberately withheld, reduced or manipulated as part of a wider pattern of financial control, that should not simply be dismissed as an ordinary maintenance dispute.
The system needs to recognise the difference
There are at least three very different situations:-
1. Genuine inability to pay
A parent genuinely has very limited resources and is paying what the rules require.
That parent deserves a fair assessment and should not be unfairly penalised.
2. A financially complex case
The parent is self-employed, owns or controls a company, receives dividends or has other financial interests, and the basic income figure may require closer examination.
That does not mean wrongdoing. It simply means that the case is financially complex.
3. Deliberate financial control or withholding
There is evidence of a wider pattern in which money is deliberately withheld, manipulated or used to exert control after separation.
That should not simply be treated as an ordinary disagreement about maintenance.
These situations should not be treated as though they are identical.
And yet the child experiencing the consequences may be the same.
The uncomfortable comparison with PAYE parents
There is another issue that deserves attention.
An honest PAYE parent generally has their employment income reported through the tax system. Their salary is not something they can simply decide to restructure for the purpose of a CMS assessment.
CMS can obtain the relevant information and calculate maintenance accordingly, however financially complex cases can be very different.
A self-employed person, company director or business owner may have different forms of income, business structures, dividends, allowable expenses and other financial arrangements.
Again, none of that means wrongdoing.
It means that the financial assessment may require greater sophistication.
The system must not be tough on the financially transparent parent, and easy on the financially opaque parent.
And then there are the parents who have already given everything
There is another side to this debate that deserves recognition.
Some parents leave relationships having surrendered or divided significant financial resources — including homes, savings, pensions or other assets.
Some have made arrangements involving university or education costs and other substantial commitments.
They may have left a marriage with very little, believing that the financial arrangements reached during separation would provide a fair foundation for rebuilding their lives.
They then enter the CMS system and find themselves subject to an income-based calculation.
The problem is that family-court financial settlements and child-maintenance calculations do not necessarily examine finances in the same way.
A parent can therefore feel that they have already made substantial financial sacrifices during separation and divorce, only to find that the CMS system subsequently assesses maintenance primarily through income.
That deserves a much more nuanced public debate.
Is the system too hard on honest parents?
This is the uncomfortable question.
A system must protect children.
It must also ensure that paying parents are assessed fairly.
However fairness cannot mean simply accepting whatever figure is easiest to obtain.
Nor can fairness mean assuming that every self-employed person is concealing income.
Fairness means having a system capable of distinguishing between the two.
The honest PAYE parent should not feel that transparency leaves them carrying a disproportionate burden.
The genuinely low-income self-employed parent should not be unfairly targeted.
However where there are credible indicators that taxable income may not reflect available resources, there should be a mechanism for enhanced scrutiny.
Follow the Money Trail
This is why our proposed reform is based on a simple principle:
Follow the Money Trail.
Do not “Assume that everyone is dishonest.”
Do not “Take more money from paying parents.”
Do not “Believe every allegation made by either parent.”
What needs to be done is - "Follow the evidence".
Tier 1 — Standard CMS assessment
For straightforward PAYE income and uncomplicated circumstances.
Tier 2 — Enhanced Financial Assessment
Intended for cases involving:-
Self-employment
Small-business ownership
Company directors
Sole shareholders
Dividends
Multiple income streams
Significant assets
Disputed income
Repeated unusually low declared income, or
Credible evidence that taxable income may not reflect wider financial resources
Tier 3 — Court and Multi-Agency Review
For cases where financial disputes intersect with serious family conflict, safeguarding concerns, alleged coercive or economic abuse, or ongoing family-court proceedings.
This would not mean every self-employed parent undergoes a forensic investigation.
It simply means that complex cases are treated as complex cases.
Why should a receiving parent become a financial investigator?
This is perhaps the biggest unanswered question.
If a receiving parent believes that the income figure being used by CMS does not reflect the paying parent’s circumstances, they face the enormous challenge of trying to understand businesses, companies, accounts and financial structures that they may have no access to.
Why should an individual parent have to become an accountant, investigator and enforcement officer simply to secure appropriate financial support for their children?
The state designed the system. Therefore the state should ensure the system has the tools to investigate credible discrepancies.
What happens when the same income appears year after year?
This question deserves a direct answer.
What happens when a parent appears to have income around the tax threshold for:-
Two years?
Five years?
Seven years?
Ten years or more?
Again, repeated low income does not prove wrongdoing. However, where there are credible indicators that the declared income does not reflect the wider financial circumstances, should that not trigger a proportionate review?
The system should be able to ask:-
Is the income genuinely this low?
Is the business genuinely making little or no available income?
Are there dividends?
Are there other income streams?
Are there significant assets?
Is income being diverted?
Is there evidence of deliberate non-payment?
Is the low payment part of a wider pattern of financial or economic abuse?
Those questions should not be left entirely to the receiving parent to investigate.
Panorama exposed pressure, however the story is bigger
Parents Under Pressure was right about its central premise, parents are under pressure.
However, children are under pressure too
A receiving parent struggling to meet the cost of raising children is under pressure.
An honest paying parent whose maintenance is calculated from their actual income is under pressure.
A genuinely low-income self-employed parent is under pressure.
And a child caught in the middle experiences the consequences of all of it.
That is precisely why the debate cannot be reduced to “paying parents versus receiving parents.”. The question needws to be:
Is the system getting the calculation right?
The Government needs to answer
If a parent repeatedly reports income around the tax threshold while continuing to operate a business, what should happen?
If there is no evidence of anything improper, the case should remain straightforward.
However if credible evidence suggests that taxable income may not reflect the wider financial picture, shouldn’t that case move into an enhanced financial assessment?
How many years should the same low-income figure be accepted without meaningful scrutiny? And why should a receiving parent have to carry the burden of proving that something may be wrong?
Why should an honest PAYE parent be subject to an easily verified calculation while a financially complex case can potentially require far greater effort to scrutinise?
Children don’t live on tax returns
This is ultimately not about attacking self-employed parents.
It is not about assuming that every business owner is hiding money.
It is not about punishing people for being financially successful.
This is about whether a child-maintenance system designed around income is capable of dealing with a modern economy where income can be much more complicated than a payslip.
Because children don’t live on tax returns.
They don’t live on tax thresholds.
They don’t eat accounting figures.
They don’t pay for school shoes with a company’s profit-and-loss statement.
Children live on real money and real resources.
When a child is receiving only £83 a month, we should have the courage to ask whether the system has genuinely assessed what is available to support that child.
It should be to make sure that the right amount is paid by the right parent, based on the right financial information.
Because ultimately, this isn’t about winning a financial battle between adults.
It is about whether children receive the financial support they need.
Children should not be pushed into poverty simply because the system is unable, or unwilling to look beyond a single income figure when the evidence warrants it.
Children don’t live on tax thresholds.
They live on real-world costs.
And the child-maintenance system must start living in the real world too.
Deanna Newell | Founder - DN Family Law | Campaign Lead - Reform That Works
Advocacy for truth-tellers, survivors, and the children who deserve better
