|A Fair Shared-Care Formula for Child Support|
|by Barry Pearson|
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This one-seventh reduction, perhaps superficially plausible, leads to very strange and unfair results.
Imagine a separated mother and father, each earning about £233 per week. At first, the mother cares for their child for 5 nights per week. She receives £25 per week from the father who cares for the other 2 nights per week. (He would pay £35 if he didn't care at all).
Now they change the caring arrangement, and she cares for 4 nights per week. She now receives £20 per week. The White Paper believes that this one night change is worth a swing of £5 in assessment.
Now they change the caring arrangement once again. She cares for 3 nights per week instead of 4. Does this mean that her payment reduces to £15 per week, a swing of £5 for that extra night? No!
Now she is the NRP, and required to pay £20 per week! The White Paper says that her costs haven't changed much, yet that one night costs her £40 per week! So some nights are worth £5 per week in child support, others are worth £40 per week!
What is the difference? Clearly it is nothing to do with the costs of children for one night, hence nothing to do with child support at all. It is to do with being lucky enough to have the title "PWC" rather than the title "NRP". This is worth about £35 per week to this couple.
Groups who fight for the one-seventh formula aren't fighting to maintain adequate support for the children. They are fighting to maintain this massive financial privilege associated with the title "PWC". This title is so often associated with being the person who receives Child Benefit.
If parents earning the same amount share care equally, obviously there should be no maintenance due! What could it possibly be for? It would not be for paying for the children - both are already paying the same amount anyway. It would not be to reduce benefit spend - neither is on benefits.
It could only be for some totally different purpose, such as spousal maintenance of whoever receives Child Benefit.
If, instead of earning the same amount, one earns a lot less and is perhaps on benefits, then it would be reasonable for the earning parent to make a net payment. That would obviously require the formula to recognise that one is earning and the other is on benefits - but the White Paper makes no attempt to do this. It simply assumes that the parent getting Child Benefit is also probably on means-tested benefits - this is a cynical insult to both mothers and fathers.
The fair shared-care formula doesn't attempt to reduce the assessment to zero at the equal-sharing point, unless both parents earn the same. If one earns significantly more than the other, that person will have a net liability at the equal-sharing point.
This same statement is also an argument to have a fairer scheme! It just needs exactly the same argument to be used from the point of view of the other parent. After all, part of the time, each parent is a parent with care!
The argument appears to be that caring at all has a high cost, and that caring a little more or less doesn't make that much difference. So why doesn't the formula recognise this for both parents? Why is it that if an initially non-caring parent starts to care, perhaps for one or two nights per week, the assessment is only reduced by one-seventh per night?
The White Paper's statement would be an argument for the first night of care by the NRP to cause a significant reduction because that one night makes all the difference. But as seen earlier, the big change in assessment occurs between three nights and four nights (with the difference between PWC and NRP), when according to the White Paper the costs are not actually very different! The White Paper's formula doesn't conform to its own statements.
This is why a fair shared-care formula must be symmetrical - to ensure that arguments such as those in the White Paper are applied fairly to both parents.
This reveals that the formula isn't just being designed to cater for the cost of children. It is also being designed to achieve social ends that ought to be handled in other ways.
The formula should ensure that the PWC is neither in-pocket nor out-of-pocket whatever the shared-care amounts. (Otherwise, what is the money actually for?) But here, it is clearly being intended to encourage shared-care - a task which family courts and other means should handle. This penalises cases where arranging shared-care is not an issue, and doesn't cater for cases where the CSA is not involved.
The CSA formula should be focused on providing the costs of bringing up the children, not on other problems for which better-targeted means should be provided. It must not be overloaded to achieve other ends as well - it cannot succeed well with all such objectives, and may well fail with all of them.
How can an NRP on benefits afford to care for the children for (say) one or two nights per week? Removing this £5 liability simply restores the NRP to what s/he would be getting if there were no children - basic poverty-relief level. The White Paper itself has said that there is significant cost in supporting the children at all. This minor concession doesn't follow its own logic.
The PWC will be getting Child Benefit and is also entitled to other benefits which recognise the cost of children, for example the Income Support Family Premium and Child Allowances. If the PWC is getting Housing Benefit, that will be based on a house suitable in size for children. The NRP on benefits has none of this.
Clearly if both parents are on benefits, the formula can do little to help. But in the case above, if the PWC is earning while the NRP is on benefits, then the formula should have the PWC exercise some financial responsibility while s/he is absent and doesn't have the cost. After all, an earning PWC is probably being relieved of child-care costs (which are only 70% covered by WFTC) as well as other costs.
The White Paper argues that earning-PWCs are relatively rare - but they not non-existent. The number of them will increase with initiatives such as New Deal for Lone Parents and WFTC.
Furthermore, the White Paper quotes figures for PWCs at the time they make claims, but doesn't cater for the fact that many who start on benefits become more self-reliant months or years later. The only way to tell whether this is one of those cases is to check - a fair shared-care formula must take both parents' income into account, it impossible to be fair otherwise.
It is impossible to have fair shared-care formula that doesn't look at both parents' income. Impossible!
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|Page last updated: 29 October, 2002||© Copyright Barry Pearson 2002|