"Children First" & Second Family Children: Analysis of the issues and options
by Barry Pearson
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Examination of 2nd family options

The key factor affecting the relative importance of the 1st and 2nd family children is the standard percentage liability, not any modification of it:

- if it were 1%, it would say "the 1st family children are so unimportant that it is easy to spend more than that on anything you choose (which could be a 2nd family)";
- if it were 50%, it would say "the 1st family children are so important that it is impossible to spend that much on anything else (including a 2nd family)";
- but at 15/20/25%, it says "it is possible to find this amount of money for a 2nd family if you can adjust your finances so that 50% to 70% is sufficient for everything except the children".

The effect of a 2nd family modification is to adjust the importance of the 1st family children downwards relative to "anything you choose" to make it easier to spend at least the same amount on 2nd family children. So a 2nd family modification has to consider the extra hardship to the 1st family caused by the reduction in maintenance, compared to the benefit to the 2nd family of being able to pay for essentials (housing, etc) from the retained income. This is not algebra, it is sociology, and needs to be based on suitable research.

The example cash flows don't appear to show a need for a universal modification - there is no evidence that the standard formula makes it impossible to spend as much on the 2nd family children as the 1st, nor evidence that the any extra hardship caused to 1st family children would simply result in more balanced spending on 2nd family children.

First option

The effect of this option is to reduce the liability to the 1st family children to 85/80/75% of the standard liability, depending on the number of 2nd family children.

No rationale for this can be detected from the example cash flows. There is no evidence that this reduction in liability is needed, or if so is the right amount. It appears to be a plausible-looking formula desperately plucked out of thin air.

Second option

The effect of this option is to treat the children of both households as though they were a single household, to apply the standard formula to them all, then to spread the money evenly across all the children.

The sole logic behind this would be if the 2nd family could not afford to spend any of the 85/80/75% they were originally left with on their new children. But there no evidence of this. The example cash flows don't show that the 2nd family has no scope for spending any of that money on their new children. There are also other flaws with this option:

- There is a body of opinion that the 2nd child of a family costs significantly less than the 1st child, even if they are treated as equally important, and so on. So while 2nd children of both families ought to cost the same as each other, this amount should be less than the 1st children. This is partly reflected in the basic formula (15/20/25). Option 2 doesn't take this into account.
- The standard formula only caters for the most common number of children in one household (1/2/3), not for those of two households (2/3/4/5/6).

The conclusion is that neither option makes much mathematical (or other) sense, even if they were needed, which does not appear to be the case.
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Page last updated: 13 December, 2003 © Copyright Barry Pearson 1998