CMS Fair Calculation and Protected Income

The campaign

The Child Maintenance Service performs two important but different functions: it calculates a maintenance liability and, in Collect & Pay cases, can collect that liability and charge statutory collection fees.

Right First Time UK believes stronger safeguards are needed where the income used by CMS is disputed or materially different from a parent's current income.

Our principle: establish the correct income first, calculate the correct liability second, and only then collect and enforce the correct amount.

CURRENT LAW

What the law already protects

25% income ruleRegulation 34 of the Child Support Maintenance Calculation Regulations 2012 provides that historic income is normally used unless current income differs by at least 25%, or the historic-income exceptions apply.

Statutory calculationThe 2012 calculation regulations govern how the underlying maintenance liability is determined, including income and other relevant statutory factors.

60% DEO protectionWhen a Deduction from Earnings Order is operated, the employer must protect 60% of the employee's relevant net earnings when making the deduction.

Regulation 34 Official 60% DEO guidance

The gap we want Parliament and DWP to examine

The explicit 60% protected-earnings safeguard applies to deductions made through a DEO. It is not currently a universal 60% cap on the CMS liability or on payments made through Direct Pay or every form of Collect & Pay.

Our campaign therefore proposes a new safeguard. The proposal below is not presented as current law.

RIGHT FIRST TIME UK PROPOSED REFORMS

Five reforms we are calling for

1. Universal protected-income safeguardCreate a statutory minimum-income protection across Direct Pay, Collect & Pay and wage collection. No scheduled CMS payment, including applicable arrears recovery and collection charges, should normally reduce a paying parent's verified net income below a defined protected level. We propose Parliament considers a 60% floor, mirroring the existing DEO principle, with carefully drafted exceptions and protections for children.

2. Automatic Regulation 34 checkWhere credible evidence indicates that current income may differ from the historic figure by at least 25%, CMS should be required to record and determine the Regulation 34 issue before relying on the disputed figure for enhanced collection or enforcement.

3. Protection while a material income dispute is decidedWhere a genuine 25%+ dispute is supported by credible evidence, create a statutory mechanism preventing the disputed portion from producing disproportionate enforcement consequences while CMS determines the income issue, without allowing unsupported disputes to stop ordinary maintenance.

4. Automatic correction after CMS errorWhere CMS establishes that it used an incorrect income despite having sufficient information to make the correct decision, require prompt recalculation of affected liability, arrears and relevant charges in accordance with the law, with a clear audit trail explaining the correction.

5. Independent accuracy reportingPublish the number of 25%+ income disputes, acceptance and rejection rates, Mandatory Reconsideration outcomes, tribunal changes, corrected liability, processing times, and collection fees connected with liabilities subsequently corrected.

Why the 60% proposal could help

Payment route	Position now	Campaign proposal
Direct Pay	CMS calculates the amount; parents arrange payment. The DEO 60% protection is not a universal cap on the liability.	Create an equivalent statutory affordability/protected-income safeguard.
Collect & Pay by Direct Debit or other non-DEO collection	Collection fees and statutory payment rules apply; the DEO protected-earnings rule does not simply become a universal liability cap.	Apply the new protected-income safeguard to the total scheduled collection, with Parliament determining detailed interaction with arrears and fees.
Deduction from Earnings Order	Existing employer protection requires at least 60% of net earnings to remain when the DEO deduction is made.	Retain the existing protection and use its principle as the starting point for wider reform.

Collection fees and the need for transparency

Collect & Pay currently adds a 20% collection fee for the paying parent, while a 4% fee is deducted from the receiving parent's payment. Direct Pay does not carry those collection fees.

Because CMS both determines liabilities and administers a fee-bearing collection system, Right First Time UK believes there should be especially strong transparency around cases where the underlying liability is later corrected.

Evidence standard: This campaign does not state as established fact that CMS deliberately inflates income to generate fees. We are calling for publication of data capable of testing whether incorrect calculations, delayed corrections or disputed income decisions have resulted in inappropriate additional charges.

Official CMS payment guidance

What should be measured publicly?

How many CMS calculations are challenged because the income figure is alleged to be wrong.
How many disputes involve a difference of at least 25%.
How often CMS accepts current-income evidence at the first decision, Mandatory Reconsideration and tribunal stages.
The total value of liabilities and arrears reduced after correction.
The amount of Collect & Pay fees associated with liabilities subsequently reduced or corrected.
Average time from receipt of qualifying evidence to a corrected decision.
How often enforcement continued while a material income dispute was unresolved.
How frequently a parent had to use Mandatory Reconsideration or appeal before evidence already supplied resulted in a changed decision.

What we are asking Government to do

Review the Child Maintenance statutory framework so that accuracy and affordability safeguards operate before avoidable debt and enforcement accumulate, while preserving the child's right to properly calculated maintenance.

We want DWP and Parliament to consult paying parents, receiving parents, children and families, welfare organisations, legal specialists and independent researchers before designing any new protected-income rule.

Official evidence

Child Support Maintenance Calculation Regulations 2012

Primary regulations containing the historic/current income framework, including Regulation 34.

Open legislation

Regulation 34

The statutory historic/current-income rule and 25% threshold.

Open Regulation 34

CMS employer guidance

Official instructions explaining the 60% protected earnings calculation for DEOs.

Open GOV.UK

CMS payment guidance

Official Direct Pay, Collect & Pay and payment-method information.

Open GOV.UK

CMS calculation guidance

Government explanation of how maintenance and income changes are calculated.

Open calculation guide

Decision Makers' Guide

DWP administrative guidance for Child Maintenance decision makers.

Open CMDMG

Accuracy and legal notice

This campaign distinguishes between existing law and proposed reform. The proposed universal 60% protected-income safeguard is a campaign policy and is not currently presented as a statutory right for Direct Pay or every Collect & Pay collection method. Individual cases depend on their facts, applicable decision dates and legislation. This page provides public-interest information and is not legal advice.