Flaws with treating "administrative ease"
with priority
The government's priority of "administrative ease"
The two most important constraints on the reformed scheme were administrative
ease and being Treasury neutral. This article is about administrative
ease.
The current scheme examines lots of facts about the two households, and
needs evidence to support these. The information is roughly equivalent
to separately examining each household for an Income Support claim. It
is said that about 100 pieces of evidence can be needed. (The claim time
for Income Support is X, for CS is Y. There is a reason for this - with
Income Support, the "client" wants to co-operate, while with
the CSA, at least one and possibly both "clients" probably don't
want to cooperate).
The government said "90% of the time is spent assessing the claim,
and 10% enforcing it", and wants to reverse those proportions. So
it has concentrated on administrative ease. (That doesn't mean the formula
is simple - there are actually over 20 constants defined in legislation
which steer the calculation - just that not much evidence is needed because
there are only 4 variables. Its complexities can then be handled by computer).
In some cases, such simplicity is probably a good idea, but it has been
extended into areas where it isn't justified.
Consequences
This has resulted in what government and the media have repeatedly called
"rough justice". For some people, the consequences are bizarre
and quite serious. Both poor and wealthy parents, and their children,
are adversely impacted.
A couple of examples:
These are cases where the reformed scheme is flawed because the thinking
behind the proposals was narrow and out-of-date.
| The flaws in the government's logic |
The factors which a better scheme
could exploit |
| |
Reformed scheme |
Motivation to cooperate |
Service charge opportunity |
|
Example 1:
Shared care
|
It is impossible to have a fair shared care formula
which doesn't take the income of both parents into account. But the
government has decided only ever to take into account the income of
one of the parents. (When in doubt about which one to treat as the
"parent with care" whose income is ignored, it uses "who
claims Child Benefit" - also know as "the mother").
It has rejected my alternative proposal on the grounds that it would
cost too much to administer - it would need to know the incomes of
both parents and the number of relevant children (other children in
the household) of both parents. That is, 2 extra variables, one of
which can probably be found in the Child Benefit computer already. |
There is a parental motivation that is absent
in the original "benefits" model that the government has
based its thinking on. Here, the fear is the difficulty of getting
evidence from the parent with care (which is often the case with benefits
cases). But my proposal only behaves differently from the reformed
scheme if the parent with care has income - and these are private
cases, where the parent with care has chosen to use the CSA. So the
PWC will cooperate! |
There is more money around to pay for extra administration.
Here, both parents are earning (otherwise my proposal makes no difference),
so the CSA could impose a service charge to cover the extra costs. |
|
Example 2:
Sharing the wealth
|
It is impossible to have a fair & workable
scheme for children sharing the wealth of both parents simply by handing
over larger & larger amounts of child support money. Beyond a
certain level, (perhaps the Small Fortunes level), the
extra money will be spread over the recipient household and not be
confined to the qualifying children. But the law specifically rules
out anything other than transferred money being counted as child support
- trust funds, investments for later life, etc, don't count. |
There is a parental motivation that is absent
in the original "benefits" model that the government has
based its thinking on. Here, given that the NRP is having to pay anyway,
he would probably rather cooperate with a more complicated scheme
that benefited the qualifying children more, rather than a simpler
scheme that benefited his ex more! (Or at least it would be good to
have the choice). |
There is more money around to pay for extra administration.
Here, the NRP may be willing to pay the service cost (if only out
of spite against the ex!) |
The government is probably shooting itself in the foot and placing extra
workload on the CSA at extra cost. In first case, because the formula
isn't fair, there is an incentive for the PWC to use the CSA instead of
coming to a private, fair, agreement with the NRP. The CSA is providing
a free service to obtain unfair amounts of money - so why not use it?
Conclusion
The reformed scheme has been diverted away from fairer and possibly cheaper
opportunities by concentrating on the old-fashioned "lone mother
on benefits - absent father earning" model. The results will fester.
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