What is wrong with the Child Support Act?

 

Jonathan Bradshaw

Professor of Social Policy, University of York

February 1994

 

The Child Support Agency began operating in April 1993 and Members of Parliament will already be aware of the response of their constituents to its activities. The legislation had all party support in Parliament and there are some people who will argue that the reaction from separated (the common use of the word absent is tendentious) fathers was to be expected, that the legislation always had the intention of hammering them and if Parliamentarians grit their teeth all will eventually be well. Others may be persuaded that there are serious flaws in the legislation - that perhaps Parliament should accept some of the blame and that urgent amendments are called for. The Social Security Committee will be the first body to test the water in Parliament. The courts are already interpreting the legislation.

The Child Support Bill was heralded by the White Paper Children Come First. The White Paper was the direct result of a speech that Mrs Thatcher made to the National Childrens' Homes in 1990 in which she said "...when one of the parents not only walks away from marriage but neither maintains nor shows any interest in the child, an enormous unfair burden is placed on the other...No father should be able to escape from his responsibility and that is why the Government is looking at ways of strengthening the system for tracing absent fathers and making the arrangements for recovering maintenance more effective".

There was a problem. The courts were failing to produce maintenance settlements between couples at the breakdown of their relationships which represented anything like the real costs borne by the caring parent - usually the mother. Maintenance awards were low, they were rarely reviewed effectively and too few separated parents were paying court orders. The result was that according to the Bradshaw and Millar survey of lone parents carried out for DSS in 1989, less than a third of lone parents at any one time were receiving any maintenance and the level of payment averaged only UK27 per week.

The 'liable relative' arrangements in Income Support also sought to ensure that lone parents were supported by the fathers of their children. As the proportion of lone parents on Income Support increased, so did the importance of these powers. But in practice liable relative officers were notoriously the first to be taken off their job whenever any more important work needed to be done in local social security offices. As a result the proportion of the lone parents dependent on Income Support receiving any maintenance fell to only 22 per cent by 1989.

Yet the proportion of lone parents dependent on income support has increased from about 16 per cent in 1961 to over 70 per cent today. The labour participation of lone parent families has declined during a period when the labour supply of married women has increased. Public expenditure on lone parents had increased enormously. Yet lone parents on benefit are the poorest families with children in the UK. They needed help. What about help from the separated father?

The White Paper claimed that its 'guiding priority is the interests of the child'. This is nonsense. Given the scheme that was introduced, most of the children of lone parents, those on Income Support, have no chance of benefiting from the Act. The explicit objectives of the legislation were that:

1. Fathers 'honour their responsibilities to their children'.

2. That parents' work incentives would be maintained.

3. That the exchequer would save money by reducing dependence on Income Support.

Public reaction to the proposals in the White Paper was muted. There was a general view, shared by the Opposition, and expressed debates on the Bill, that the existing arrangements through the courts were not working, that it was right that separated fathers should contribute to their children and a formula based scheme might be the answer. The National Council for one Parent Families was a keen supporter of the Bill and Sue Slipman, their director, had been closely involved in designing the scheme. It was left to other bodies, notably the Child Poverty Action Group, NACAB and the Family Policy Studies Centre, to advise MPs and attempt to illustrate the true impact of the scheme.

If you were now to read the debate on the Bill in the House of Lords and the second reading debate in the Commons it would be difficult to claim that Parliament really tested this legislation - particularly the impact on separated parents. There were reasons for this failure of the legislature. The principles of the legislation had all party support. Much of the detail came later in regulations which, typically, were not scrutinised by Parliament, and the Social Security Advisory Committee were precluded from considering them because it was family law.

Much of the attention in the second reading in the Commons was distracted by the issue of the penalties lone parents would suffer if they did hot disclose the identity of the putative father of their child - hardly in retrospect, the most important element in the Act, but one of the few that resulted in an amendment. Some Conservative MPs in the debate claimed all sorts of extra qualities for the legislation, including that it would roll back the tide of marital breakdown and out of wedlock births.

There are some who say that the Committee stage did not fully consider the details of the Bill because the whips were anxious to get the legislation through before the 1991 General Election. Certainly ministers thought that they had a very easy ride and those specialists briefing MPs found it very difficult to obtain the sustained attention of the members on the Committee. What is wrong with the Child Support Act (and the Regulations)? Everyone will have their own list of criticisms. Most of my criticisms emerge from a comparison with the Australian scheme.

When the Department of Social Security was designing the Child Support scheme they made studies of the schemes in Wisconsin in the United States and in Australia. Most of the major defects in the Child Support Act arise from the fact that it did not take sufficient account of the Australian arrangements.

First, the reason why the Child Support Act cannot be claimed to be a measure for children (or most lone parents, or absent parents) and why it is being described as the Treasury Support Act, is that there is no disregard of child support payments in Income Support. For that reason it can benefit only those minority of children of lone parents not on Income Support. In the Australian scheme there is a disregard of the first 10 dollars and thereafter the lone parent keeps 50 per cent of any child support paid. Instead of thinking anew about disregards, the designers of the legislation merely grafted child support onto Income Support which had never had a disregard of maintenance. The Treasury opposed a disregard because it would have cost extra in the short term and diminished savings in the long term. Furthermore, work incentives would have been reduced by a disregard.

Yet without any disregard or taper there is absolutely no incentive for lone parents or absent parents to comply with the Agency. This is a serious flaw.

Second, was the issue of retrospection. In Australia it was eventually decided against making the scheme retrospective and against attempting to revise mothers' settlements often made years ago through the courts. Only new cases were taken on. In contrast in Britain the Child Support Agency will eventually take on anyone that applies and decisions by the courts covering maintenance will be ignored. Long dead and forgotten settlements are already being overtaken. The principles of clean break, no fault settlement and no spousal maintenance which have been established by decisions in the courts over many years are being overturned and rejected.

Third, one of the results of this is that the Child Support Act takes no account of previous capital or property settlements. If at separation or divorce the partners agreed to a contract that allowed the caring parent to take the family house and/or have a sum of capital in lieu of maintenance in order to settle matters as cleanly as possible - in the interest of the children - this is ignored by the Child Support Agency. The Australian scheme takes account of capital settlements in fixing the amount that should be paid.

Fourth, the Australian scheme and also the practice through our courts and in the liable relative arrangements in social security did not include spousal maintenance. Thus in Australia, child support is awarded in respect of children only. The British courts tended not to make orders in respect of the caring parent. The liable relative formula was for a long time based on the amounts in Income Support paid in respect of children not parents and though powers were introduced to include spousal maintenance they were rarely operated. The Child Support Act reverses all that. There is a calculation in respect of the caring parent. It is part of the amount that is paid regardless of whether the caring parent had remarried, regardless of who walked out on whom (or fault) and regardless of the circumstances of the absent parent. Spousal maintenance is deeply unpopular with separated parents.

In addition to these defects in the Act there are other problems with the formulae which Members of Parliament may be aware of from correspondence they are receiving from their constituents. There are two main ones.

1. The formula does not take account of shared care. Thus there are a variety of arrangements that parents make to enable separated parents to have access to their children - he may for example visit them every other weekend and he may take them on holidays. This may involve considerable expense. But the Child Support Agency takes no account of these expenses in calculating child support and ignores shared care altogether unless it exceeds 104 days per year.

2. The formula gives priority to the first family. Thus whether or not the caring parent has remarried does not affect the obligations of the separated parent. Similarly the amount that the separated parent is required to pay takes no account of any obligation that he has to care for a new family. His need to support a new partner is ignored. If she has children from a previous relationship then they are considered by the Act to be entirely the responsibility of her previous partner, not the new stepfather. Most people involved in the reality of stepfamily life believe that this calculus is bizarre.

There are people that hope and expect that the Child Support Agency will result in the achievement of many objectives that they consider desirable. Thus it is certainly hoped that it will reduce lone parents' dependence on Income Support. In fact the White Paper had rather modest objectives in this respect. It was estimated that the scheme would only lift 50,000 of the million or so lone parents on income Support off it. The White Paper also claimed that only about a third of those not paying maintenance would be brought into successful payment of child support.

Very little attention has been paid to the possible (adverse) behavioral consequences of the legislation. Here are just four possible responses which would contribute to undermining the aspirations of those social engineers with investment in the legislation.

1. You are a separated parent in a low paid job. The Child Support Agency declares that you have to provide UK65 per week support in respect of your former family. What will you do? One strategy that may make sense is to give up work (or not take it up if you are unemployed) for when you are dependent on Income Support you are only obliged to pay a sum of 5 per cent of the adult scale rates in respect of your former family. An alternative strategy might be to disappear.

The Child Support Act may well have an impact on the work incentives of separated parents.

2. You are making payments to your former partner as set down by the Child Support Agency. You meet a new woman and would like to marry her and would like to take on supporting her and her children which would lift her off dependence on Income Support. You decide there is no way you can support them as well as pay your child support.

The best way for a lone parent to come off Income Support is to repartner. The Child Support Act: may reduce the pool of new partners.

3. You are a separated parent and have formed a new partnership. You are required by the Child Support Agency to increase your payments to your former family by three times. You feel you can no longer cope with the burdens of the second family and you leave them.

The Child Support Agency may well increase the breakdown rate of remarriages.

4. You are a separated parent. Your wife gives you access to your children once a month. You really want to see them more often but you realise that your visits are difficult for all concerned and that the childrens' interests come first. You are told that you have to pay three times the present level of agreed maintenance by the Child Support Agency. You want to see more of your children. You are not able to disconnect the two issues - regardless of the consequences.

The Child Support Act seeks to separate the issue of maintenance from the issue of access - but in reality they are inseparable.

Great brains have worked on the Child Support Agency. There is room for argument about all the points that have been made in this article. What is right, just and equitable in this legislation is not immediately clear. At least not to those who know a certain amount about rapidly changing family forms and doubt the efficacy of social engineers.

In the past, the courts and lawyers have struggled to work out these matters on a case by case basis. The Child Support Act was a decision that the disciplines of social security policy could do better. Standard formulae, equitable treatment, a policy driven by a general principle and financial considerations. No discretion, no individualism, no flexibility. Parliament decided to introduce bureaucratic procedures into the most intimate of personal relationships. Is this the way?

Parliament will decide. But if Parliament considers this policy again, let it consider the Australian scheme more carefully. Let us learn lessons from abroad. Child support in Australia was concerned with the interests of the children. The Australian scheme has disregards, it is not retrospective, it avoids the issue of spouse maintenance and makes allowances for capital settlements. Furthermore, the essence of the scheme is that it is linked to a set of policies which seek to deal with child poverty and the dependence of lone parents on benefits. Thus not only can lone parents keep some of their maintenance, there is a Jobs Education and Training (JET) scheme (to help lone parents to be more successful in the labour market) and in addition the Australians are investing heavily in child care services designed to enable lone parents to come off benefit and to participate in the world of work.

In Britain there is no help for lone parents with child care. The small training scheme that existed in the Community Programme has drifted away in the hands of the TECS. The OECD has identified Britain as the only country in which lone parents had become more dependent on benefits outside the labour market. Most lone parents want to be independent of their former spouses and to work. Is social policy responding to that aspiration? Certainly not in the Child Support Agency.

 

Professor Jonathan Bradshaw
February 1994