Child maintenance plays a vital role in supporting children when their parents live separately. While many parents are able to agree their own arrangements for the children’s welfare, including financial support, this isn’t always possible. In those situations, the Statutory Scheme steps in to assess, calculate, and, if necessary, enforce child maintenance payments.

These calculations are based on income information held by HMRC. However, if the Paying Parent’s financial circumstances extend beyond what is recorded, the assessed amount may be lower than it should be. So, what options are available when this happens?

 

1. Variation Application

If a Paying Parent income does not reflective the full financial circumstances, and it is believed other income has not been taken into consideration by CMS, an additional income variation is often the first step.  This can be reported by either parent and can be done through the “Report a change” section of CMS online account.

There are four types of additional income that can be raised:

• Unearned Income. This could include dividends, interest from savings and investments or rental income.   This income must be £2500pa or more to be considered. Note, there is no legal requirement to include these types of income without a variation application.  
• Additional Income. This applies only where maintenance is assessed at nil or flat rate automatically through certain benefits payable to the Paying Parent or their partner, but the Paying Parent also has an income from pension, employment or self-employment. This ‘additional’ income must be £100pw or more to be considered.
• Diverted Income. If the Paying Parent has the ability to control the amount of income they receive and that control is used to unreasonably reduce the income by diverting it to another person or for another purpose, it may be considered diverted income. There does not have to be a deliberate act to constitute diversion.
• If the Paying Parent has assets such as money, stocks and shares, property (not their main home), a notional income can be considered. Each category of asset must exceed £31250 to be considered.

CMS do not have the resources to investigate all variation applications thoroughly and many are rejected through “insufficient evidence”.  If that happens, the decision should be disputed further, which we discuss later.

2. Referral to the CMS Financial Investigation Unit (FIU)

In some cases where the financial circumstances do not reflect the child maintenance award, the case may be referred to the Financial Investigation Unit (FIU) who will conduct a review of the allegations of possible additional income

A Receiving Parent can request a referral to FIU but must explain why the income is believed to be wrong.   The FIU will only accept the case if they agree there is merit in the dispute.

FIU will gather financial information directly from relevant organisations, including banks, mortgage providers, a credit reference agencies.  It does not rely on the Paying Parent to provide information, although they might be asked to provide additional information later in the process if deemed necessary to assist with making a decision.

Parties do not receive a full copy of the FIU file or the evidence gathered, unless the matter is submitted to a Tribunal, at which point the Tribunal may direct the provision of the full file.

An FIU investigations can take up to 2 years, and does not guarantee a change to the child maintenance.

3. Disputing Decisions

If child maintenance is revised as a result of the variation or FIU investigation, that decision can be disputed, with the first step being a request for a mandatory reconsideration, which must be raised within one month of the revised decision.

A Mandatory Reconsideration Notice is issued which will either revise, or refuse to revise the decision.  A mandatory reconsideration against an FIU decision will always refused because a CMS case worker cannot over rule the decision.

Note; in some cases parents are told they cannot raise a mandatory reconsideration against an FIU decision – that is not correct.  Stand your ground and insist on the mandatory reconsideration being completed.

Having received the Mandatory Reconsideration Notice, if a party remains dissatisfied they can submit an application to HMCTs for an independent Tribunal panel to review the case further. Again the appeal application must be filed within one month of the Mandatory Reconsideration Notice issue date.

Some parents experience difficulty receiving a copy of the mandatory reconsideration notice.  All is not lost, and you may still be able to file an appeal with if you can demonstrate that you have been through the process, but no notice has been issued.

The Tribunal process will involve a much greater investigation into the financial circumstances of the Paying Parent.  Evidence will be requested by the Tribunal Judge, which might include tax returns, company accounts and even bank statements. All parties will receive copies of the evidence and have an opportunity to comment on it.

The Tribunal panel will review the financial evidence and will take further oral evidence.  Once satisfied they have all the necessary information, they will make a decision based on all evidence presented to them.

A Tribunal decision is authoritative, and can only be overturned if there is a proven error in law. Whether you are the Paying Parent or the Receiving Parent, it is vital that you prepare to represent your case, and you have a full understanding of the boundaries and remits of the Tribunal process.

  Final Comments

Whether the variation or the FIU route is explored to consider the true income of the Paying Parent, the process can be lengthy.  Where an appeal is necessary, it will take years rather than months to conclude.

Deciding which route to take can be difficult, and may depend on the level of evidence available to represent a case to the Tribunal and how long you are prepared to wait.

Enforcement of any arrears from these decisions will not take place whilst an appeal is ongoing.

An FIU investigation is unlikely to continue if an appeal is live against the same disputed decision.

– Author: Michelle Counley

When a parent disagrees with a decision made by the Child Maintenance Service (CMS), the first step is to request a Mandatory Reconsideration . This must be done within 30 days of receiving the original decision notice.

Mandatory Reconsideration gives the CMS an opportunity to review the decision, taking into account any new information or evidence that may not have been considered initially. Once the review is complete, CMS will issue a Mandatory Reconsideration Notice, confirming whether the decision has been changed or upheld.

Although the process is intended to be straightforward, issues often arise especially when errors are not identified early. These oversights can have long‑lasting and financially significant consequences.

Clarity is essential when asking for a Mandatory Reconsideration. The CMS may issue several decisions in close succession, and unless you clearly say which decision you are challenging, your request will automatically be linked to the most recent one, and that may not be the decision you intended to dispute.

This can send the appeal in a completely different direction than you expected and potentially may be dismissed.

A recent case highlights just how important accuracy is during the reconsideration process.

The parent received a revised maintenance calculation that added a variation for additional income, backdated over several years and resulting in substantial arrears. Only a few days later, the parent left their job and moved onto benefits, which changed their calculation to the flat‑rate amount. The parent requested a Mandatory Reconsideration to challenge the inclusion of the additional income, but because the flat‑rate assessment had already been issued, the challenge was inadvertently linked to that newer decision rather than the one relating to the additional income.

CMS appeals progress slowly, and it was around 18 months before a hearing was scheduled. At the hearing, it became clear that the appeal related to the flat‑rate benefits decision—not the original income‑based calculation the parent had intended to dispute.

The Tribunal dismissed the appeal, as the flat‑rate decision was legally correct. By this stage, the time limit to request a reconsideration of the income decision had expired, leaving the parent unable to challenge it.

As a result, the parent was left with substantial child support arrears based on a decision that had never been correctly challenged and could no longer be appealed.

The Mandatory Reconsideration process may appear simple, but it carries significant legal weight. Identifying the correct decision, submitting clear grounds for challenge, and understanding the difference between a complaint and a reconsideration request are all crucial steps in protecting your rights.

To avoid these pitfalls, it’s vital to:

• Clearly identify which specific decision you are disputing
• Use the exact date of the decision you are appealing.
• Make sure your dispute is against the decision itself, and not the quality of service.

Mistakes that go unchallenged, even accidentally, can accumulate over many years and lead to devastating financial consequences.

 – Author: Michelle Counley