"Children First" & Second Family Children: Analysis of the issues and options
by Barry Pearson
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Commentary in 2002

At the consultation stage of the CSA reform process during 1998, the question arose about how the proposed new CSA formula should be modified to cater for a non-resident parent's new family. Should the liability to the earlier, qualifying, children be reduced if the non-resident parent had "acquired" extra children since separation? And if so, what should the modification be? The Green Paper (the consultation document) assumed that there should be a modification. It stated:

"However, some non-resident parents have children living with them – and these should be allowed for in the formula. We do not want the system to force fathers to choose between supporting their first and second families. And we do not want to see children in a second family impoverished to support the children in the first family."

The Green Paper offered two options, with these (approximate) effects:

First option: The effect is to reduce the liability to the 1st family children to 85% / 80% / 75% of the standard liability, depending on the number (1 / 2 / 3-or-more) of 2nd family children.
Second option: The effect is to treat the children of both households as though they were a single household, to apply the standard formula to them all, then to spread the money evenly across all the children.

This paper here presented an analysis of whether any modification to the formula was justified, and if so what it should be. It concluded that, on the whole, no modification was justified.

Although this paper was never submitted as a stand-alone paper to government, it was circulated and discussed among some interested parties. The reaction depended on who was responding: parents with care and those representing them agreed with its conclusion that there should be no general modification to the formula for second family children, while non-resident parents and those representing them disagreed with this conclusion. This was a simple "who wins" polarisation!

Then this paper formed part of the response to the Green Paper of a consortium bidding for the ACCORD contract. ACCORD ("Access to Corporate Data") was a project to replace the major computer systems of the Department of Social Security, including that of the CSA. (It was another consortium, led by EDS, which eventually won the contract, and at the time of writing EDS is still developing the new computer system for the CSA).

The government chose the first option, which was not as bad as the second option. In effect, the non-resident parent's net income is reduced by 15% / 20% / 25% if s/he has 1 / 2 / 3-or-more "new" children in the household. (They may be the non-resident parent's biological children or step-children - all that matters is that the household qualifies, or will qualify, for Child Benefit for them).

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Page last updated: 13 December, 2003 © Copyright Barry Pearson 1998