A Fair Shared-Care Formula for Child Support
by Barry Pearson
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1.3 The fair shared-care formula itself

Start with the chosen formula for the non-shared case (eg. 15/20/25%, or any other chosen formula), then:

- For the period of time that the mother is absent, assess her liability according to this formula. (Eg. 15% of her net income over 3/7 of a year, if she cares for 4 days & nights per week).
- For the period of time that the father is absent, assess his liability according to this formula. (Eg. 15% of his net income over 4/7 of a year, if he cares for 3 days & nights per week).
- The difference between these amounts determines who pays whom, and how much.

The money "follows the child". There is no need to invent a modification to the basic formula - simply apply the basic formula consistently to both parents.

This is not novel - this principle is used in many other nations and states (see later).

1.4 The consequences of applying this fair shared-care formula

(Although they are inappropriate, this section uses the term "PWC" for the parent who cares for most time, and the term "NRP" for the parent who cares for least time).

- If the parents don't share care, this formula works exactly like the White Paper's non-sharing formula.
- If the PWC earns a lot less than the NRP, for example is on benefits, the liability falls by about one-seventh per night, as in the White Paper - so the benefit saving is the same. With a PWC on benefits this is financially reasonable from the children's point of view.
- If the PWC and the NRP earn about the same amount, then the effect is to reduce the maintenance liability by about two-sevenths per night. This has no impact on the benefit saving, because neither parent is on benefits. The distinction between being PWC and NRP where there are more-or-less equal amounts of caring becomes insignificant and not worth behaving badly over.
- If the NRP earns a lot less than the PWC, for example is on benefits, then in fact the net effect is likely to be that the PWC will pay the NRP. This will often provide a benefit saving that is unique to this proposal. This is probably necessary if the NRP gets no benefit assistance for caring for the children for (say) a couple of nights per week.

It is clear that this formula tends to favour the poorer parent, whether that is the PWC or the NRP. It provides the maximum amount of benefit saving, and "smoothes" the money available for the parents to care for the child. The latter reduces the impact on the child of transferring between the richer and the poorer household - it will help prevent the children being alienated as they move from better-off PWC to poor NRP.

1.5 How much does it cost to administer?

Fairness and justice ought to be higher priority than administration costs, but the question will inevitably be asked, and needs a reasoned answer.

In the cases where there is no shared care, or the PWC is on benefits, the administration cost is the same as the White Paper proposal. These are probably the majority of cases. It is easy to check from the Department of Social Security's Departmental Central Index (DCI) computer system whether the PWC is on benefits.

So any extra cost only applies where the PWC earns and shares care. These are private cases, of course, and eventually the CSA will charge a service fee. It may even make a profit! (The White Paper attempts to duck the unfairness in private cases on the grounds that there is no need for the parents to apply for maintenance. But why expect a parent who can benefit from an unfair formula to forego the chance?)

But the extra administration cost will anyway be small. It requires that the PWC's net income & number of other children in the household be identified. Since these are private cases, the claimant, typically the PWC, will not be reluctant to provide this information, and indeed will normally be eager to hurry the claim. This cost does not resemble the administrative costs of the current scheme. They are more like the costs of administering Income Support or Family Credit, which have vastly lower overheads and vastly faster response times than the CSA.

There is no excuse to make bad law on the grounds of administration cost, especially since the benefit saving described earlier will probably more than compensate for it!

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Page last updated: 13 December, 2003 © Copyright Barry Pearson 2002