People working in certain positions can influence how they are paid and the amount of pay they get. These people are known as a ‘complex earners’.
Examples of complex earners include company directors, who can affect their level of pay or dividends, or self-employed people, whose earnings relate directly to the profit/ loss of their business. Income from other means such as property or savings, isn’t included in the standard CMS calculation and is referred to as “unearned” income.
What if someone isn’t declaring their true income?
If you as the primary carer believe your ex (the paying parent) isn’t declaring their true income, you can apply to the CMS for an “additional income variation”. One of the grounds for a variation is ‘diversion of income’.
The CMS will consider a variation if it believes the paying parent is controlling (directly or indirectly) the amount of income they get by diverting it to another person or purpose, which means it isn’t included in the figure used by the CMS to calculate child maintenance.
You can ask for a variation when you apply for child maintenance or after child maintenance has been calculated.
Apply for an additional income variation
To apply for an additional income variation with the Child Maintenance Service (CMS), you can either contact them by phone or, if you have registered your case online, through the CMS self-service portal. You can apply at any time, even before or after the child maintenance amount is initially calculated. The CMS will consider your application if you believe the paying parent has income or assets that they are not currently declaring, and this could affect the amount of child maintenance being paid.
How the CMS investigates complex cases
Where a non-resident parent is suspected of concealing their true income, the Financial Investigations Unit (FIU) can investigate.
The FIU is a body within the Department for Work and Pensions (DWP) which considers more complex cases. It works with HMRC records and other information to assess and uncover additional income from non-resident parents. Where relevant, it also passes information to HMRC.
Additional income and evidence collected by the FIU may be used by the CMS to calculate child maintenance assessments. The CMS can order the parent to pay child maintenance they’ve previously avoided. The FIU does not have powers to investigate paying parents outside the UK.