There should be no Treasury saving or state compulsion

All child support paid should become extra income for the children's household.
&
The state should never require separated parents to be a CSA case.

What?

1. All child support paid should become extra income for the children's household. There should be no reduction in any benefits or tax credits caused by child support payments. (The terminology is "all child support payments should be disregarded").
2. No separated parents shuld be required / compelled by the state to start or remain in a CSA case. Cases should only be started and continued if one or both parents chooses it.

This contrasts with the existing law that a lone parent claiming Income Support or Job Seeker's Allowance (income based) must apply for child support maintenance via the CSA (unless there are special, and rare circumstances). This law exists because in those cases the government reduces social security expenditure according to the amount of child support paid, and so the compulsion exists to ensure this saving is made.

Why?

Why no Treasury saving?

1. Because this reduces the money available to children in the UK's poorest households - those on benefits such as Income Support.
2. Because this then forces benefits cases to become compulsory cases, with the adverse consequences identified below.

A counter argument is that if there is Treasury saving for Income Support cases, then if those parents start working at least 16 hours per week, the child support will become fully available to them. Hence it is an incentive for those parents to start working at least 16 hours per week (which is a good thing of the children are older). I believe this counter argument fails for the following reasons:

1. As seen below, less than half of compulsory cases will actually save money for the Treasury. So trying to save money causes harm in lots of cases where it won't even save money. The attempt has adverse effects well beyond its scope.
2. Most benefits cases will yield very little or no Treasury saving, therefore will not provide such an incentive. If the incentive is needed, it must be sought elsewhere. (For example by removing entitlement to Income Support once the youngest is at secondary school).

Why no state compulsion?

State compulsion is known in many cases to cause damage to already strained relationships, to the detriment of both parents and the children. Examples include:

• The non resident parent sometimes sees the CSA application by the parent with care as a personal attack on him/her.
• The parent with care loses control of any attempts to make private financial or other support arrangements with the non resident parent.
• The children see additional strain in the relationships between their parents, and obviously that sometimes affects the children
• And, apart from such strain, this is an inducement to collude in trying to evade the compulsion.

If the Treasury savings or other advantages out-weighed the social ills caused by the compulsory state-interference in the lives of separated families, then the argument may be difficult to make. But, year by year, the number of cases in which the state has an actual financial benefit from compulsion reduces. As shown below, under the reformed scheme it will become perhaps about 18% of cases, with perhaps a further 19% of cases where the case will be compulsory but in fact there will be no actual Treasury saving.

2 (connected) factors have changed dramatically since the CSA was first proposed, and both are socially beneficial:

1. The government has switched the main focus of the CSA from "reducing social security expenditure" to "reducing child poverty"
2. Parents with care are getting to work (16 hours or more per week) in increasing numbers, and then ceasing to claim the trigger benefits

Now, it is time to accept the switch entirely, and cease the corrosive compulsion remaining in a proportion of cases. Note that the proportion of CSA cases that are benefit cases does not show how many CSA cases started as benefit cases. About 73% start as benefit cases, then many of those become private cases later when the parent with care gets back to work. Often, the case is a benefit case for only a small proportion of its life, but by that time the damage has been done, and at the most fragile time in the new (separated) relationship between the parents.

How?

Implementation would be easy! (It is only the decision to do this that needs work). It is initially simply a matter of removing Income Support and Job Seeker's Allowance (income based) from the list of benefits that trigger CSA cases. Eventually it might involve removing the option of compulsion from the law, but that requires a bit (not much) more work.

Although Treasury savings would be reduced a little, the move would probably be welcomed by all informed lobby groups and citizens, with none of them dissenting. And there is evidence from elsewhere that reducing the Treasury saving increases the compliance, hence improving the outcomes for the children.

Numbers

The diagram below shows approximately what would happen if the cases at May 2002 were all moved across to the reformed scheme without phasing. (Some simplifying assumptions were made).

They show:

1. About 63% of all CSA cases would be private cases, with no state compulsion and no Treasury saving
2. About 19% of all CSA cases would be benefits cases, with state compulsion, but no Treasury saving (because they wouldn't exceed the £10 disregard)
3. About 18% of all CSA cases would be benefits cases with state compulsion, and actual Treasury saving (the amount beyond the £10 disregard)
4. About 74% of all child support arranged would increase the income of the children's household, and not be Treasury saving
5. About 26% of all child support arranged would be Treasury saving, and not increase the income of the children's household

The diagram below shows the way that CSA cases shift from being benefits cases to being private cases during their lifetime. (Some simplifying assumptions were made).

This shows:

1. About three quarters of CSA cases start because of state compulsion
2. The vast majority of those compulsory cases eventually become private (non compulsory) cases

Questions:

• How many cases could have avoided ever becoming CSA cases if the state had given the parents a chance?
• How much operating cost of the CSA could therefore have been avoided?
• How much damage was done to the relations among the parents & children during temporary periods of state compulsion?

References