Premature conversion to the new CSA scheme - A loophole that may thwart government policy
by Barry Pearson
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Case study 4: Higher caps under the new scheme

These examples are based on a non-resident parent earning £2000 net per week, with £500 per week housing costs. The cases are for 1, 2 and 3 children respectively.

The caps for the current scheme are about £167 / £272 / £376 for 1 / 2 / 3 children. The caps for the new scheme are £300 / £400 / £500 for 1 / 2 / 3 children.

(For those without the benefit of the colour coding, the lines, from top to bottom, are for 1, 2 and 3 children respectively).

Unlike most other cases, the largest effect is for 1 child. That is really a consequence of the way the new scheme's cap operates. Instead of being influenced by the maintenance requirements for the children concerned as in the current scheme, it simply operates at a single net income level (£2000 per week), and so tends to reduce the differences resulting from extra children.

Note - the advantage to the parent with care (the difference between the intended and premature conversions) is nearly £100 per week if there is just one child. Few people actually spend this amount in total on one child!

Allowing a £100 per week loophole for better-off parents, while the same loophole is not available to a parent with care on Income Support who would anyway only be better off by up to £10 per week, is unfortunate.

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Page last updated: 12 December, 2003 © Copyright Barry Pearson 2003