Guidance

The annual review – how it works: A guide for paying parents and receiving parents

Updated 8 April 2024

Applies to England, Scotland and Wales

About this leaflet

This leaflet explains about the Annual Review process and how it affects paying parents and receiving parents.

Important information

This leaflet is only a guide and does not cover every circumstance. It only refers to the statutory child maintenance scheme provided by the Child Maintenance Service.

We have done our best to make sure the leaflet is correct as of February 2024, but it may not reflect changes to the law or to our procedures after this date. You may want to get independent advice before making financial decisions based on the content of this leaflet.

About us

The Child Maintenance Service is the government’s statutory child maintenance service. We work out, collect and pay out child maintenance payments on behalf of some separated parents in England, Wales and Scotland.

Our role is to make sure that parents who live apart from their children contribute towards their children’s upkeep by paying child maintenance.

What is child maintenance?

Child maintenance is regular, reliable financial support that helps towards a child’s everyday living costs.

In most cases, the parent who does not have the main day-to-day care of the child pays child maintenance to the parent who does have the main day-to-day care. In child support law the parent who receives child maintenance is known as the ‘parent with care’ - we call them the ‘receiving parent’ - and the parent who pays child maintenance is known as the ‘non-resident parent’ - we call them the ‘paying parent’. In some cases, the receiving person can be a grandparent or guardian.

If they live in Scotland, a child aged 12 to 19 and in full-time, non-advanced education or training can apply for child maintenance.

Get in touch

If you cannot find the information you need in this leaflet, contact us or find out more from the options below.

On the web

See Child Maintenance

By phone

Call the Child Maintenance Service
Telephone 0800 171 2345
Welsh Language 0800 232 1979

If you cannot hear or speak on the phone, you can use Relay UK: 18001 then 0800 171 2345*. For British Sign Language (BSL) you can use video relay service on a computer, mobile or tablet.

Our opening hours can be found on our website.

*Calls to 0800 numbers are free from landlines and mobiles.

By letter

Write to us at:

Child Maintenance Service 21
Mail Handling Site A
Wolverhampton
WV98 2BU

The Annual Review

We want to make sure that the right amount of child maintenance is paid by the paying parent to the receiving parent.

Every year, we look again at the paying parent’s income and benefits. This helps us to work out if the amount of child maintenance they pay for the next 12 months should stay the same, or if it should go up or down.

We call this the Annual Review.

The information we use during the Annual Review comes from either:

• information that the paying parent, their employer, or a third party (such as their accountant) previously gave to HM Revenue & Customs (HMRC), or
• information the paying parent, their employer or a third party such as their accountant gave directly to us.

Key facts

• The Annual Review of a child maintenance case happens every 12 months – on the anniversary of the date when a paying parent was told about a child maintenance application
• An Annual Review is carried out for every case for which regular child maintenance is due
• The Annual Review date decision lasts until the next Annual Review 12 months later, unless changes happen that affect payments before then.

The paying parent must carry on paying the child maintenance set out in their Payment Plan until any changes that happen during the Annual Review take effect.

Why do we carry out an Annual Review of a child maintenance case?

When we make a child maintenance decision, we use the paying parent’s taxable gross annual income (along with other things we take into account) to work out child maintenance. We do not take the receiving parent’s income into account.

Taxable gross annual income is the paying parent’s yearly income before Income Tax and National Insurance are taken off, but after occupational or personal pension scheme contributions are taken away.

After we make a child maintenance decision, the paying parent’s gross income, the benefits they get or other things that affect child maintenance can, and often do, change.

Although parents must let us know about changes that may affect their payments, the Annual Review is a different process. It happens for a number of reasons:

• so both parents know that previous child maintenance decisions can be updated regularly
• so that the payments we work out are as accurate as possible

How we work out child maintenance

In most cases, we follow 6 steps when we work out how much child maintenance a paying parent must pay.

1. Income
   
   We find out a paying parent’s gross income or we check if they get benefits.

2. Things that affect income
   
   We check for certain things that could change this gross income amount, such as pension payments, or other children the paying parent supports.
   
   We also convert the gross income amount to a weekly figure.

3. Child maintenance rates
   
   We apply one of 4 rates to the amount of gross weekly income.

4. Children we take into account
   
   We take into account the number of children who a paying parent must pay child maintenance for and any family-based arrangements.
   
   A family-based arrangement is when two parents decide between themselves on how best to support a child or children without involving the Child Maintenance Service. This can either be a formal arrangement, such as an order for maintenance made by a court, or an informal one, where the parents have made their own personal agreement.

5. Weekly amount of child maintenance
   
   Using information from the first four steps, we make a decision about a weekly child maintenance amount.

6. Shared care
   
   Finally, if this applies, we make a deduction to this weekly amount of child maintenance depending on the average number of ‘shared care’ nights a week. ‘Shared care’ is when a child a paying parent must pay child maintenance for stays overnight with them.
   
   Following all 6 steps gives us a total weekly amount of child maintenance that a paying parent must pay.
   
   For more information on how we work out child maintenance, please see the leaflet ‘How we work out child maintenance: A step-by-step guide’.
   
   We send this to you when we work out your payments.

How the Annual Review works

At the Annual Review, the amount of child maintenance a paying parent must pay for the next 12 months is reviewed. This can change or stay the same.

A paying parent will only have one Annual Review a year, however many children they pay child maintenance for.

The Annual Review follows the steps below:

1. We look again at income
   
   We get the latest available information about the paying parent’s gross income from information given to HMRC by the paying parent, their employer or a third party (such as their accountant). This will usually be for the latest available tax year for which HMRC has complete records. We also check to see if the paying parent has started getting, or has stopped getting, state benefits.
   
   If HMRC are unable to provide any information, we will write to the paying parent to ask them to provide their income details.

2. We make the Annual Review decision
   
   On the Annual Review date, we make a child maintenance decision. We use the steps explained in the ‘How we work out child maintenance’ section on page 7. These give us the amount of child maintenance that the paying parent must pay from the Annual Review date. This lasts until the next Annual Review in 12 months’ time or until we make a new decision because of any changes that affect payments before that date.
   
   The new amount of child maintenance is calculated differently depending on the income that was used prior to the annual review. This is explained in the section ‘What income is used at Annual Review’.
   
   We write to each parent to let them know this decision.

3. Payments change or stay the same
   
   The decision we make at the Annual Review means a paying parent’s child maintenance payments for the next 12 months could be different to the amounts we worked out 12 months ago.
   
   Whether they change or stay the same, we will tell both parents what their payments will be for the next 12 months. We do this by sending the paying parent a Payment Plan and the receiving parent an Expected Payments Plan as part of the Annual Review decision letter.

What income is used at Annual Review?

How we work out the child maintenance amount depends on the gross income information we previously used to work out child maintenance.

This comes from either:

• information that the paying parent, their employer, or a third party (such as their accountant) previously gave to HM Revenue & Customs (HMRC), (Situation A) or
• information the paying parent, their employer or a third party such as their accountant gave directly to us (Situation B).

You will be able to tell the source of the gross weekly income information we previously used by looking at the letter we send to you which tells you how we worked out child maintenance payments in your case.

Situation A: If the gross weekly income information is given to HMRC by the paying parent, their employer or a third party (such as their accountant)

In this situation we use the most recent figure given to HMRC to make the Annual Review decision.

Situation B: If the paying parent, their employer or a third party (such as their accountant) gave us the gross weekly income information

Because we work out child maintenance as a weekly amount, we convert the annual gross income figure provided to HMRC to a weekly amount.

We compare this latest available weekly figure with the amount of income that was previously reported directly to us by the paying parent, their employer or a third party (such as their accountant).

If there is less than a 25% difference between the two amounts, we use the latest available information given to HMRC by the paying parent, their employer, or a third party (such as their accountant) to work out a new amount of child maintenance.

If there is a difference of 25% or more between the two amounts, we keep using the amount of income we used before. This means the amount of child maintenance stays the same.

This gives us the amount of child maintenance that the paying parent must pay from the Annual Review date.

What happens next?

Whenever we use a gross income figure given to us by a paying parent, their employer or a third party when we work out child maintenance, we carry out a separate check to confirm that the amount of income used is still correct.

This is called the ‘periodic current income check’. This is separate from the Annual Review.

The periodic current income check

This is the yearly check of an income figure given to us by a paying parent, their employer or a third party.

How it works

We will check for new evidence of the paying parent’s current income. If we cannot obtain this, we will write to the paying parent and ask them to provide suitable evidence.

If the paying parent provides up to date income information

We then compare this figure to the latest available income amount given to HMRC to see if there is a 25% difference between the two. This is to see if we need to make a new child maintenance decision.

If there is less than a 25% difference between the two figures, we use the income figure given to HMRC by the paying parent, their employer, or a third party (such as their accountant).

If there is a difference of 25% or more, we use the latest income figure given to us by the paying parent, their employer, or a third party (such as their accountant) to work out child maintenance.

If the paying parent does not provide up-to-date income information

If we do not get up-to-date proof of income from the paying parent, we use the most recent figure given to HMRC to make a new child maintenance decision.

Situation C: If we cannot get an up-to-date gross weekly income amount at the Annual Review from HMRC

If we have worked out child maintenance based on information the paying parent, their employer or their accountant gives directly to us we will continue to use that amount of weekly income until we look again at the periodic current income check.

If we have worked out child maintenance based on information a paying parent, their employer, or another party (such as their accountant) previously gave to HMRC, or no income information was provided, we write to the paying parent to request their gross annual income information.

Paying parent has provided their gross annual income

We use the information provided by the paying parent to complete the annual review decision.

Paying parent has not provided their gross annual income

If we have not received the information we need to make a decision at this point, we can either:

• make a ‘best evidence assessment’, or
• make a ‘default maintenance decision’.

If we make a default maintenance decision or a best evidence assessment at the Annual Review, we will ask the paying parent for information about their income at regular intervals after the Annual Review date.

Best evidence assessment

This is when we use previous information held about a paying parent’s gross weekly income, or official statistics (such as the government’s Annual Survey of Hours and Earnings) to work out an amount of child maintenance that must be paid.

The Annual Survey of Hours and Earnings (ASHE) has information about the levels, distribution and make-up of earnings and hours worked for employees in all industries and occupations.

Default maintenance decision

This is when we apply a default rate based on the number of children the paying parent must pay child maintenance for.

These rates are:

• £39 a week for one child
• £51 a week for two children
• £64 a week for three or more children.

Frequently asked questions

Q: Apart from the paying parent’s gross income, what other changes can be taken into account during the Annual Review?

A: At the Annual Review we only look again at the paying parent’s gross income and request new income information from HMRC.

Other changes which affect the amount of maintenance can be notified to Child Maintenance Service at any time and will be investigated.

For more information on the changes we need to know about, see the leaflet ‘Changes you need to tell us about’.

Q: If I do not have to pay any child maintenance because of my circumstances, will I still have an Annual Review?

A: Yes. Everyone who has a child maintenance case with us has an Annual Review. This is because circumstances can change over a 12-month period.

Q: What happens if I disagree with the Child Maintenance Service’s decision?

A: If you think a decision is wrong, or have any information that would affect it that we have not already considered, we will always be happy to look at it again. Just get in touch with us within 32 days of the date of the letter telling you about the decision and ask us to look at our decision again.

When we look at one of our decisions again we call it a mandatory reconsideration.

In a mandatory reconsideration we will look again at how we worked out the amount. If we find that the amount is wrong, we will change it. If we cannot change it, we will tell you why. Then we will send you a letter to explain our decision and tries to answer any questions you have. We call this a mandatory reconsideration notice.

If you still feel our decision is wrong after you receive your mandatory reconsideration notice, you will be able to appeal to an independent tribunal. Your mandatory reconsideration notice will include all the information you need to do this.

You cannot appeal against our decision until we have considered your request for mandatory reconsideration.

You can find more information about asking us to look at our decision again or appealing against our decisions in our leaflet What to do if you’re unhappy with the Child Maintenance Service.

Q: I use Collect and Pay. Can I change to Direct Pay at the Annual Review?

A: Yes. If you use Collect and Pay and the arrangement is working well, you may be able to switch to Direct Pay. Direct Pay is where we work out a legally binding weekly child maintenance amount and payments are made directly between parents on dates that you both agree on. If it is right for your circumstances, it can be a more flexible way to pay child maintenance than using Collect and Pay.

Also, with Direct Pay you would not have to pay any collection fees on top of your weekly amount of child maintenance.

Call us on 0800 171 2345* for more information.

Q: I use Direct Pay. Can I make a family-based arrangement at the Annual Review?

A: Yes. If you use Direct Pay and the arrangement is working well, you may be able to make a family-based arrangement. This is when parents agree on the amount and frequency of child maintenance payments without any involvement from the Child Maintenance Service.

To find out more about making a family-based arrangement

To help you decide on the best child maintenance arrangement for you and your children and support you putting it in place.

Useful information

Help and information

For more information about our Child Maintenance services.

To talk to us about your case, please telephone us on 0800 171 2345*.

Welsh Language 0800 232 1979*.

If you cannot hear or speak on the phone, you can use Relay UK 18001 then 0800 171 2345*. For British Sign Language (BSL) you can use video relay service on a computer, mobile or tablet.

Please have your customer reference number with you when you call. This is a 12-digit number starting with the number 12. It will be shown as ‘your reference’ at the top of any letter we have sent you.

We may record our phone calls to check our service and to train our employees.

Other languages

If English is not your first language, you can use your own interpreter or one that we provide. Call us on 0800 171 2345* for more information.

Information in other formats

If you would like us to communicate with you by braille, British Sign Language, a hearing loop, translations, large print, audio or something else, please let us know.

*Calls to 0800 numbers are free from landlines and mobiles.