Evaluation of the reformed scheme
Natural rate of conversion to the new rules
The political drivers of the reformed scheme
The origin of the percentages in the reformed scheme
The 21st Century is making the reformed scheme obsolete
Will the reformed scheme achieve its objectives?
Related topic - The "Shared Care" flaws in the reformed scheme
Related topic - Can child support schemes ever work?
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The 21st Century is making the reformed scheme obsolete

The reformed scheme (2000 Act) really looks back to the late 20th century. It is an attempt to put right a scheme (1991 & 1995 Acts), also intended for the late 20th century, that went badly wrong. It is a scheme focused on trying to get child support in the UK back under the sort of control it needed then. It is really just a set of about a dozen "tweaks" to the current scheme - even the new formula is is just a way of managing with less evidence, and doesn't introduce any new concepts. It doesn't contribute to "joined up government" - it doesn't join up to other systems (family courts, social security, etc) in any novel ways.

The reformed scheme doesn't look forward to the 21st century. Probably there simply wasn't time and resource to do so - change programmes are incredibly hard. Perhaps the people designing the scheme lacked the necessary vision. Political dogma certainly got in the way. This table summarises some of the ways that the 21st Century is leaving even the reformed scheme behind.

Topic Reformed scheme The 21st Century Articles on this web site
Service orientation

The reformed scheme is somewhat based on an assumption that people need the state to administer things for them.

Administration efficiency takes precedence in the new scheme over service quality and client-focus.

The UK is becoming a service-oriented economy. People understand the sorts of service levels that can be achieved, especially in the private sector, and will judge government according to those levels.

People are also more prepared to pay for services, and pay more for better services.

Flaws with treating "administrative ease" with priority

 

Women and men

Old assumptions about men's and women's roles are still visible. Some of the thinking still appears to assume that a parent, typically the mother, will stay at home until the children leave school. (There is no age dependency for the £10 Income Support disregard, for example).

The scheme assumes there has to be a parent with care and a non-resident parent, even if they share care exactly equally. And the parent with care is the one who claims Child Benefit - which by default is the mother.

Without even checking their relative incomes, the reformed scheme assumes by default that the father needs to pay the mother, even in this case.

Not only are women working more, but they also tend to enjoy their work more than men. This may be because they are more likely to work part-time. (Lots of generalisations there!)

With working time directives gradually taking effect, and a tendency for many newer jobs to be part time anyway, and also with more opportunities to work at home, there will probably be trends towards more equal patterns of work, with more opportunities for both mothers and fathers to care for their children.

Childcare is likely to continue to improve, although with glitches on the way. Government thinking is tending to assume that a parent should only stay at home until the youngest child goes to school.

"... women will be the breadwinnners in 50% of encoupled households by 2020" (The Sunday Times, 2001-05-13)

Agenda:

Parents should have equal status by default

Use a symmetrical formula that treats both parents similarly

Eliminate sex discrimination from child support

Shared care of children

The reformed scheme is still built on the "caring parent / absent parent" model. It makes less & less sense as the nonresident parent cares for the children more & more.

The formula is grotesquely illogical and unfair anywhere near equal sharing of care.

See above - with more balanced working patterns, especially once the youngest child is at school, obstacles to shared care will be reduced.

When parents can get over their mutual animosity, there can be massive advantages in co-operative shared parenting even after separation.

Agenda:

Parents should have equal status by default

Use a symmetrical formula that treats both parents similarly

Eliminate sex discrimination from child support

Children sharing their parents' wealth

The reformed scheme, like the current scheme, makes most sense where the bulk of the expenditure on children comprises consumables and short-term commodities - food and clothes, mainly.

It tries to enable the children to share in their parents' wealth, or more precisely in the wealth of the nonresident parent, by transferring ever larger amounts of money as that parent's income rises.

The trend is towards basic consumables taking a lower proportion of families spend.

More and more, the advantages of having wealthy parents will be seen in environmental factors (better house), more convenient transport in the family car(s), leisure services (where the children will often accompany their parents), better education, longer periods of education, investments for the future, etc.

Does it make sense for children to share the wealth of their parents?

Agenda:

Amounts should relate to spend on children, not wealth

Taxpayers' / Treasury's interest

Initially the CSA dealt mainly with benefits cases, and so the main financial beneficiary was the Treasury because of reduced social security spending. The primary reason to have an administrative agency set up at considerable expense was to protect the taxpayers' / Treasury's interests.

The scheme is mainly intended to handle benefits cases, and will still use most of the child support in benefits cases to reduce social security expenditure rather than to improve the childrens' lives.

In 2001, benefits cases, where social security spending is reduced by the CSA, are about 40% of the total, and the proportion is falling year by year. (It fell dramatically when WFTC & DPTC replaced FC & DWA).

The reformed scheme will have a £10 disregard in it, and the expected average calculation will be about £30. So as benefits cases fall towards about one-third, and social security savings will only be about two-thirds of that one-third, only about two-ninths (let's say a quarter!) of the CSA business will be on behalf of the Treasury. The rest will be private business.

Agenda:

There should be no Treasury saving or state compulsion
Children's rights & responsibilities

Apart from clauses intended specifically for Scotland (applying from 14 onwards), children are treated as passive recipients of support from the parent with care until they are 16 or 18.

The award is made to the parent with care, and applies to 16 or 18.

Children appear to be becoming more financially aware at earlier ages. The government considers that financial arrangements for them need to start earlier (cf. "baby bonds").

Children's preferences in family matters and contact and residency are being recognised well before the upper age limit for the CSA - more like 14 or younger compared with the CSA's 16 to 18.

But, also, children's demands of their parents are continuing to higher ages (cf. court cases where children demand support through higher education).

Agenda:

Child support should be formally awarded to the children
Government department structure

This scheme is built using the social security approach of administration, and the decision was made to keep the CSA in the DSS instead of moving it to Inland Revenue.

The minister for Child Support in the DSS had other DSS responsibilities too.

The DSS will soon be dismembered, and will probably disappear. The Inland Revenue is quite capable of doing the things that were the stated reasons for keeping the CSA with the DSS (cf. WFTC).

Government wants to break down the silo-mentality of the civil service towards joined-up government. (They will need to overcome similar thinking at Cabinet level and be more willing to see their own empires broken up!)

Agenda:

Have closer ties between child support administration and family courts
Government & the private sector

The processes and the organisational structure of the CSA are still based on the assumption that the CSA is doing most / all of the work itself.

This is related back to service levels above. It is also related back to the fact that about three-quarters of child support money will be private money not Treasury money.

The private sector is much more appropriate for much of the work of the CSA, and for many of the cases.

 
Re-partnering

Both the current and the reformed schemes focus on the parent with care and the children improving their lot by means of Income Support and/or child support and/or work.

Another common way out of poverty for parents with care is to re-partner. Once this happens, assumptions such as "children should share in the wealth of their parents" need clarification. Who are the parents now? Especially if the new partner is also a nonresident parent?

Agenda:

Amounts should relate to spend on children, not wealth

Demographic issues The UK, along with the rest of the "Western World", faces an aging population. Yet increasingly the trend towards social security in the widest sense relies upon "pay as you go" economics - the immediate redistribution of taxes to the poor, needs, and old.

Low birth rate, even more so after male contraception.

"Birth rate slumps to the lowest on record" (The Times, 2001-05-11)

Advances in male contraception - overview

Agenda:

All children should have been accepted children

Employment Collecting child support from the self-employed is much harder than from those working for companies. There are the problems of assessment of income, and the problems of enforcement/compliance. What is happening about rates of self-employed in the economy? Is it making the issue intractable?  
Incentives to work The government (quite rightly) wants to minimise the number of people receiving means-tested benefits as a result of being out of work. It applies both carrot & stick - the carrot including tax credits.

NRP stops work, new partner works & gets WFTC. (cf. Sunday Times article).

Casualisation, service economy favouring female employees. Fathers are the primary caregiver in estimated 1 in 20 households. (Projection - mothers will be the breadwinners in 50% of encoupled households by 2020 - ST article).

DAD'S THE WORD part 1 (The Sunday Times, 2001-05-13)
DAD'S THE WORD part 2 (The Sunday Times, 2001-05-13)

 

Problems when the NRP's household claims Working Families Tax Credit

Should Working Families Tax Credit be included as NRP's net income?

Agenda:

Household benefits/credits should not be treated as income

Page last updated: 5 July, 2004 © Copyright Barry Pearson 2003