"Child Support should be for Children" - A proposal for reform
by Barry Pearson
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The proposal


(The reasoning behind each item is shown in subsequent sections).

1. Have a full disregard (not simply a £10 premium) in Income Support & JSA(IB) for child support payments.
2. Remove any requirement on a claimant for these benefits to apply to the CSA. (But they can still do so if they choose).
3. Reduce the entitlement for Income Support for lone parents to allow only cases where the youngest child is (say) pre-secondary school, perhaps 11 or younger.
4. Have suitable transition arrangements, probably within the rules for JSA(IB).

Why have a full disregard?

The objectives of this proposal are:

1. To provide extra money to some of the poorest families in the country - lone parents with young children who believe their place is at home with the children.
2. To provide recognition to the lone parent, and the children, of the non-resident parent's full contribution, instead of masking part of the contribution.
3. To provide an extra incentive to the non-resident parent to pay in full, because there is a clear advantage to the children from every penny.
4. To eliminate such excuses for not paying as "it doesn't get to the children anyway". (This is an enduring image that people have about the CSA, with good - historical - reason).

The government's identified reasons at the moment for not having a full disregard are:

1. There is an agreement with the Treasury to be "Treasury neutral" over the next few years.
2. Child support payments over £10 act as an additional financial incentive for a lone parent to work for at least 16 hours per week, and therefore to switch to a tax credit which then does have a full disregard.

Both of those (valid) reasons are dealt with in following sections.

Why remove the requirement to claim child support?

(As now, with this proposal either parent can still claim if they choose).

With a full disregard, as proposed here, there is no need for such a requirement. There is no longer a taxpayer interest in the matter.

The objectives of this proposal are:

1. To remove a potentially embarrassing inefficiency in the reformed CSA. In most cases in future where a lone parent is forced to use the CSA because she claims Income Support, there will actually be no saving for the Treasury! But there will be the cost to the taxpayer of running unnecessary cases, with obvious implications for the operation of the CSA. (This is examined in more detail later).
2. To encourage separated parents to make their own arrangements if they can, with the CSA still available if they can't.
3. To avoid the resentment (and perhaps Human Rights implications) of "state intrusion" into the lives of separated families where there is no taxpayer interest.
4. To avoid any resentment by the lone parent that the non-resident parent is reluctant to cooperate with support (in cases where the non-resident parent sees no case for going beyond what the CSA demands anyway).
5. To avoid any resentment by the non-resident parent who might believe that the CSA is involved because of vindictiveness.

(The last two points reflect the fact that the intrusion of the CSA sometimes drives a further wedge between separated parents at a sensitive time).

Why remove the entitlement to Income Support where all children are older?

There is universal agreement that there are advantages for adults, children, taxpayers, and the economy in having as many people as possible in work. But with the reformed CSA, there is inadequate means to achieve this.

The proposal here is to match the incentives and pressures to get back to work according to the age of the youngest child:

1. Where children are particularly young (for example, pre-school) there is not a consensus that it is better for a lone mother to be at work (perhaps with the child in childcare). In fact, it is probably better to provide a neutral attitude, and let such a mother receive the full child support and the full Income Support if she chooses. This is a very personal matter when children are at that age, which depends on personal and local conditions.
2. Where the youngest child is at school, but pre-secondary school, there is much more of a case for the lone parent to be at work. But using child support as an extra incentive is unlikely to be very effective. In most cases they will already see all the child support anyway because of the £10 premium, and there will be few cases where they see a significant amount compared with all the other amounts they are entitled to. The reduced cost of childcare because the children are older will probably make a bigger difference. (The tax credit only pays 70% of the cost).
3. But once the youngest is at secondary school, it is far easier to work for at least 16 hours per week. And it is at this stage where children are most likely to benefit from having a role model of a working adult. It is now important that the lone parent gets properly established in work before the point at which the lone parent is no longer entitled to as much state support. It is probably important for the lone parent to get prepared for the expenses of the child's further education too. (Some jobs are being advertised as "term time jobs").
4. This latter is the point where the Treasury can start to save some of the money released as a result of the other proposals. A larger number of lone parents will now become economically active. (I do not have the information needed to predict whether this will in fact be Treasury neutral, but in the long term surely it will be).

All the lone parents I know believe that once children have reached this age, they (the parents) have many more options available, and indeed all of the ones I know are working.

It goes without saying that throughout all of the above stages, the "New Deal" approach to persuading lone parents of the advantages of getting to work, and assistance if they want to do so, should continue.

Why have transition arrangements?

There are two sorts of transition needed:

1. For lone parents currently on Income Support who will no longer be entitled to it because of the age of their youngest child. It is common for legislation to take transition cases into account, sometimes as special cases for a few years. Perhaps this could be handled by allowing them more time to claim JSA(IB) than other cases.
2. For parents who separate in future when their youngest child is too old for entitlement to Income Support. They may need some time to "find their feet" before getting a job, if they have not been working before separation. Once again, perhaps this could be handled by allowing them more time to claim JSA(IB) than other cases.

I have no strong views on this matter, which would obviously have to be discussed with expert parties.

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