CSA White Paper 1999

 

In July the Government finally published its long-awaited White Paper on the future of the Child Support Agency. The Prime Minister, Mr Blair, claimed to have found a way to "create an Agency that truly puts the interests of children first" where "more families will be better off".

Newspaper reports of fifty-one deaths apparently attributable to the CSA indicate how important it will be to get the system right this time. So how is this to be achieved?

The proposed legislation will mean a deduction of 15% of net income from the non-resident parent (NRP) for one child, 20% for two children and 25% for three or more. Those who are in receipt of state benefits will pay a minimum amount of UK5.00.

The term 'non-resident parent' usually translates as 'father'.

Under the new system the only significant factors affecting how much you will pay will be:

• Your net income (gross income minus tax, national insurance, and pension contributions)
• The number of children in your second/step family
• The number of nights the child spends with the NRP (shared care)

In 'exceptional circumstances' only some contact costs may be allowed, though the discretionary element will almost certainly produce widespread variations. No allowances will be made for housing, travel to work, daily expenses, caring for an elderly /infirm person etc. There will be no maximum amount payable in child support for better off NRPs, while a minimum deduction will be made from the state benefits of the poorest.

The income of the 'parent with care' (PWC) will not be taken into account under any circumstances.

The new legislation, once it has completed its passage through Parliament in the next session, is expected to come into effect in late 2001. This will, however, only apply to new cases. Existing cases will convert to the new system some time after this, and the transition to the new amounts will be phased in over a period of five years.

The Government has stated that "there is no point creating a system which cannot gain the support of the majority of parents". But it seems likely that the inherent gender discrimination in the proposals will ensure that NRPs reject the new system - for those who actually pay child support the inevitable lack of confidence will be crucial. MPs hoping for smaller mailbags can expect to be disappointed.

Take as an example a modern couple - we will call them Tony and Cherie - with three children. High earners both, she gets almost twice his salary. Sadly, their marriage breaks down, but as responsible parents they decide, in the interests of the children, that they will both continue to play a significant childcare role, so they agree to share the children's care equally.

Under the proposed system Tony will be expected to pay higher-earning Cherie 12.5% of his income - and look after the children half the time. Cherie, however, has no such financial obligation. Even if their earnings were exactly equal and their care of the children was equal, he would still have to pay her.

Fair? Equitable? Sustainable? Or is the Government proposing an undisguised, unrelenting financial barrier to active fathering?

Perhaps the example we used is untypical. Surely the outlook must be better for those of more humble means?

Imagine that Tony and Cherie were living on benefits. The UK5.00 minimum payment would not apply to a shared care case, so Tony would pay nothing. Quite right - he is equally sharing the care of the children. But that means equally sharing the cost as well, doesn't it? Apparently not.

As the holder of the Child Benefit book - almost unexceptionally a gender privilege - Cherie is deemed to be the 'parent with care'. Though spending an equal amount of time caring for the children, she will also get Child Benefit, additional Income Support, plus Housing Benefit and other 'passported' allowances.

So the label of 'parent with care' clearly has its advantages - it gives Cherie significant superiority in comparative income! When Tony has the children he will have to house them, feed them and clothe them, all from his single person's allowance. Not so Cherie.

It must have been with considerable irony, therefore, that the Government stated: "We said in the Green Paper that we wanted a reformed child support system to do two things; to support families; and to tackle child poverty".

'Supporting families' would surely mean coming up with a shared care formula that is symmetrical for both parents, not punitive to one. And it would mean taking into account the income of the 'PWC' in shared care cases, as well as that of the 'NRP' - if such pigeonhole terms are not in any case meaningless, given that the child is cared for by both.

And surely 'supporting families' would mean that when the children are staying with the 'NRP' he would receive 15% of the PWC's income - the money would follow the child. The labels would become interchangeable, if not obsolete.

'Tackling child poverty' must likewise mean that the money follows the child. Child Benefit should be divided according to who the child is actually staying with on any given number of nights a week. Anything else is not only fraudulent (paying the PWC for time the children are not actually being cared for by her) but will lead to poverty for the children while they are staying with the NRP (who has to cope without any State support).

The lack of financial help given to the 'shared care NRP' on benefits will inevitably impact upon the child, and children with one better-off parent (i.e. not on benefits) will suffer from the severe financial penalties in the formula during their time with their 'non-resident' parent. He will in fact be paying twice for them, and very few can afford that.

And it is not only in cases of equal shared care where the 'NRP' will be penalised. The inequity applies to those with one night per week care just as much - it is simply at its most extreme at 50/50.

It is also almost certain that many existing Court Orders for staying contact - 'shared care' - will need to be reviewed because it will be financially impossible for the 'NRP' to adhere to them. Responsible fathers will once again become the CSA's financial scapegoats.

On top of all this, the Government has added another disincentive to active fathering. Rather than measuring shared care in percentage terms (as the CSA now does), it is intending to introduce 'banding'.

Banding will mean that the non-resident parent is deemed to have care for one, two or three nights per week. Currently, it is possible to have care of a child for 2.9 nights per week (for example) and get an assessment based on the actual amount of time the child spends with you. In future this will be 'levelled down' to two nights per week - widening further the poverty trap for NRPs.

There is no logical reason for this. Computer calculations based on 'nights per year' are simpler than working to a 'banding' measure.

So what can be done? For the proposals to work they will have to ensure that there is symmetry in the assessment criteria. To endow the label 'parent with care' with such enormous financial advantage is indefensible. Where there is shared care (whatever the division of time) both parents are at different times 'PWC' and 'NRP'. They should be treated and assessed accordingly. If the money is for child support it must be seen to follow the child.

In our response to Children First FNF showed that PWC income needs to be taken into account in shared care cases. We proposed a reduction in liability of 2/7ths per night of care as better reflecting the NRP's costs (but the Government rejected this). One alternative, which enjoys broad support, is for each parent to be assessed at 15% of income for the time the child is with the other, the maintenance payable being the difference between the two figures. This would be equitable, symmetrical and achievable.

Shared care is not unusual. It is estimated by the Government to account for 25% of the CSA's caseload, and is increasing. If the Government insists on disregarding PWC income in shared care cases this caseload will increase - not least because the incentive for working PWCs is to use the CSA, knowing their income will be disregarded whatever their circumstances.

Fairness, above all, is required for a child support system to be accepted by the public. A symmetrical system which assesses the income of both parents in shared care cases allows for the fact that women generally earn less than men, but at the same time recognises that fathers also care for their children, and that such care involves the same cost as for them as for the mother. It is transparently equitable, workable and economical. Any additional cost of taking PWC income into account could be met in private cases by a charge to both parents - the savings to the taxpayer would be immediate. There are examples of successful - that is, non-discriminatory - shared care formulae in other countries.

FNF fully supports the oft-repeated Government statement that parenting is about more than money - it is also about emotional support, love and commitment, and the child's right to these from both parents. Penalising the most responsible parents (as in the proposed shared care formula) is not the way forward.

Getting the system right this time will stop child support being a contentious issue. A fair system will be supported. One which penalises shared parenting for fathers will not. And non-compliance, of course, costs a lot of money.

 

Karen Randall
August 1999