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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These are cases where the reformed scheme is flawed because the thinking behind the proposals was narrow and out-of-date.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.

Page last updated: 17 December, 2003 © Copyright Barry Pearson 2003