Use a formula to determine the amount

The amount should be predictable, plausible, and practical.

What?

The amount should be calculated according to a formula, and not rely on the whim of decision makers. It should also be simple with relatively little information of personal circumstances needed to make the calculation.

Predictable: People should be able to plan their financial affairs. This applies to both payer and payee.

Plausible: All concerned must be able to understand what all the features are for. (Whether they agree with them or not). Features must be explainable, and not be arbitrary. The features of the formula must relate to the support of children, and be consistent with the policy objectives (eg. relieving child poverty or whatever).

Practical: It must be possible to administer all aspects of the system in practice with quality achievements. There should be no features such as discontinuities which encourage bad behaviour by the people concerned.

The formula should be freely publicised.

Why?

All of the features above - predictable, plausible, practical - are simply characteristics that most people want from the systems that impact their lives. They would apply to motor cars, an examination system, the remote control for a television, etc. By default, they should apply here too. Consider what happens with the child support of the 1991 & 1995 Acts:

Unpredictable: The parent with care often can't predict whether money will arrive, or if so how much. (A given amount of money is more valuable if it is predictable). The non resident parent often receives unexpected increases in liability. (A give amount of money is often more affordable if it is predictable). The "departures" scheme appears like a battle with unpredictable consequences for both sides.

Implausible: No one really understands what all the features are for. Few could truly justify them, since some features (such as certain percentages) are simply arbitrary. Some liabilities don't correspond to researched costs of children. There are many areas where there is a valid but unanswerable question: "if they take X into account why don't they also take Y into account?"

Impractical: The formula is demonstrably impossible to administer in practice. The formula is badly-behaved, with unexpected consequences that encourage undesirable behaviour (such as leaving work, emigration, even suicide). A scheme that takes a lot of circumstances into account will be subject to reviews more often as circumstances change.

There are many people who don't want a simple formula. They typically claim that a system that took more circumstances into account would be fairer (which normally means that it would make the person concerned better off). But in general, for the non resident parent, that is probably not true. A simple scheme has to play safe and set a low average amount. A scheme that uses far more circumstances about both parents need not play safe.

Many different ways of operating a child support system have been tried in the UK, and also in the rest of the world. The perfect approach has not been found, and commentators sometimes appear to act according to the principle "the grass is greener over there", or "the next radical change will work, honest". Much of the choice appears to be between "a simple scheme which can't hope to be fair in all details, but may be implementable", and "a complicated scheme which can't hope to be fair in all details, but which relies on very fallible human beings and is incomprehensible to all concerned".

How?

A formula has to be devised according to what society/government wants the system to achieve. A society doesn't even have to have a child support system if this doesn't satisfy some objectives of that society. Therefore, this doesn't attempt to devise a complete formula by logic or analysis. Instead, it proposes some features that any system should have to gain credibility and reduce friction.

However, the assumption, both in the social context and here, is that the child support system should be primarily designed for and measured against outcomes for children, rather than other (probably temporary) obectives such as reduced social security expenditure or spousal maintenance. There is a gradual trend worldwide towards thinking of policies from the children's point of view, and that applies here.

References