Child Support Analysis

Financial analysis

The cost of raising children
Here is a summary of the whole topic. That page provides abstracts and puts the topic into context, then links to the "cost of children" articles below. If you don't know how much children cost, you will never understand child support.
Here is a brief description of Small Fortunes: Spending on children, childhood poverty and parental sacrifice. This is some of the most credible research around.
Another discussion concerns "wealth sharing" and Small Fortunes: Spending on children, childhood poverty and parental sacrifice. It doesn't support the reformed formula.
Here is a brief description of The Costs of Children and the Welfare State: An Empirical Analysis based on Consumer Behaviour. The CSA Reform Green Paper refers to, but I believe the government totally misinterpreted it!
This summarises information published in the March 2001, Pregnancy & birth magazine in a supplement The cost of having a baby in 2001.
This is a brief description of a Davies & Joshi paper Measuring the Cost of Children: Estimates for Britain. What they say about spending on childcare is interesting & useful to know.
Here are views on how Family Spending: A report on the 1999-2000 Family Expenditure Survey relates to the cost of children. So what do families spend their money on? This was published by the government (well, the civil service).
Here is a quick look at what the government is prepared to pay in benefits or tax credits. Some people (typically NRPs!) believe you should set child support amounts according to what the government thinks children cost. They then focus on the smallest cost they can find! NRPs do not want to pay the higher of these amounts!

Here is a structured set of categories of costs of children. People spend money on children for various things, and here is a basic list.

Comparisons between the current scheme and the reformed scheme

I've put lots of government formulae & statistics into spreadsheets to try to understand what is going on, and who will be the winners & losers when the reformed formula starts. Here are the articles available:

This page discusses why this web site presents the information in the form it does so.

What differences do housing costs make? (NRPs with high housing costs will be among the losers under the reformed scheme).
What difference does the number of children make? (Diddly squat under the current scheme!) If the number of children being supported doesn't make much difference to the amount of child support being demanded, what credibility is there?

It is interesting (frightening!) to see what the marginal rates of increase are! In other words, if you earn an extra £X, how much extra are you left with? Sometimes, not a lot! (The reformed scheme is better than the current scheme).

It is even more interesting (and even more frightening!) to see what the marginal rates are when tax & National Insurance are added to child support. Is it right that a NRP on £200 gross per week can do whatever is necessary to earn another £150 gross per week (training, overtime, promotion, lots of extra travel, ...) yet only be £27 per week better off? That's how it can be! Is it necessary to ask why such an NRP may drop out of employment, or just not try hard, or commit fraud? What messages is society sending to such a person?

NRP's household claiming Working Families Tax Credit

The reformed scheme has rules about how WFTC is treated (or not) as net income for purposes of calculating the liability.

This set of pages uses case studies to show what happens. The results don't make sense. One page is a proposal for improving the rules to remove the disincentives to work.

The "shared care" flaws in the reformed scheme

The single most glaring fault in the reformed scheme, leading to massive unfairness and explicit sexual discrimination, is the "shared care" feature.

Families Need Fathers supplied a lot of material to the Social Security Select Committee about the unfairnesses in the Shared Care formula, and various other parts of the reformed scheme. I helped them develop the material, and helped them in person deliver the evidence to the Committee on the afternoon of September 15th 1999.
This evidence appears in the 10th Report of 1998-1999 of the Social Security Select Committee for that year
, reporting on the CSA Reform White Paper.

We presented a fairer formula to the Social Security Select Committee. This appears as an appendix to the 10th Report of 1998-1999 of the Social Security Select Committee.
Baroness Hollis rejected this proposal
. We don't believe her reasons are correct. We haven't given up!
Here is my commentary on that letter from Baroness Hollis.

We supplied a set of cases studies (here showing a slightly expanded set) showing how the faulty shared care formula, combined with deficiencies in the benefits and tax credit schemes, leave non-resident parents who share care badly off compared with parents with care.
When care is shared exactly equally, it is specifically the father who is worse off, because of the bias in paying Child Benefit to mothers, and the bias in the child support formula towards the person receiving Child Benefit.

It is valid to ask whether the formula should link the liability to shared care at all. (The answer is "yes"!)

Here is some historical material that developed this topic:

Here is a set of articles, going back to 1998, analysing this topic.
First, here is my original paper of 1998
.

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Page last updated: 28 November, 2005 © Copyright Barry Pearson 2005