Redundancy payments are not taken into account in the standard maintenance calculation, which is based on gross taxable income from earnings, although the capital may be considered through an asset variation if the paying parent holds the income in a bank or savings account and the amount is at least £31,250. The Child Maintenance Service may also take the redundancy payment into account when considering any maintenance arrears.
I thank the Minister for this and previous answers on the CMS. I hear the Government saying “when time allows”, but this really is important for the families who have suffered for too many years. My constituent, for example, has successfully appealed at tribunal, with both the judge and the Child Maintenance Service agreeing that the parent’s declared income did not reflect their true earnings, and arrears were awarded. Yet after receiving a substantial redundancy payment and despite holding significant assets, including property and substantial pension investments, no maintenance is being paid, and enforcement has not taken place. Does the Minister accept that this exposes a gap in how redundancy payments are treated by the CMS and the wider enforcement framework, and will he urgently review both to ensure that children are not left without support and no longer suffer?
Part of the challenge here is that the legislation currently requires us to use earnings information and figures provided by His Majesty’s Revenue and Customs, and, because redundancy payments of up to £80,000 are exempted from tax, they do not show up in that way. However, I hear what the hon. Lady is saying and the wider mood of the House with regard to the Child Maintenance Service, and I will share the concerns that she raises with my noble Friend Baroness Sherlock.