Select Committee on Social Security Minutes of Evidence

Memorandum submitted by Dr Helen Barnes, University of North London and Family Policy Studies Centre, Dr Gillian Paull, Institute for Fiscal Studies, and Professor Ian Walker, University of Warwick and Institute for Fiscal Studies (CS 54)


  The Family Policy Studies Centre has consistently argued for reforms to the child support system to make it simpler and more transparent than the present system, and to deliver improved financial advantages to children. Whilst the proposals in the White Paper do represent a considerable increase in simplicity and transparency, we would argue that in their current form, they do so at too great a cost to other principles, in particular the welfare of children.

  We have serious concerns about the equity of the proposals, in particular the fact that they appear likely to increase the inequalities between those at the lower and higher ends of the income distribution, by reducing the amounts payable to parents with care, by increasing the number of low-income non-resident parents who are liable to pay, and by offering those non-resident parents on higher incomes opportunities to reduce their liabilities. We are less confident than the Government that the reforms will be able to deliver the gains which are being claimed for them, either in terms of the public purse or in reducing the numbers of children living in poverty.


  1.  We welcome the opportunity to present evidence to the Committee. The Family Policy Studies Centre has been involved with child support for a number of years, and has published several studies in this area. The Family Policy Studies Centre and the Institute for Fiscal Studies are currently working on a research project (funded by the Nuffield Foundation) which models the income effects of the proposed reforms on families of different composition and at different income levels, whose findings will inform our evidence. The Institute for Fiscal Studies is also shortly about to begin work on a project modelling the more complex behavioural impact of the reforms.

  2.  We welcome the introduction of a percentage formula, which will greatly increase the transparency of the scheme, and enable parents and their advisors to calculate the support due. However, the fact that a different calculation applies to those on low income means that it is neither as simple, nor as radically different from the existing system, as has been implied in the presentation of the policy. At an individual level, the amounts of child support will reduce on average. However, some non-resident parents will be expected to pay more. These include the poorest non-resident parents (those with low incomes and children living with them, who are currently exempt and will now have to make a minimum payment), non-resident parents with high housing costs, and those whose former partners have high incomes. At the aggregate level, however, the amount of child support due from the population of liable parents will be largely unchanged, so that any increase in revenue will be achieved only by a large rise in compliance rates.

  3.  We welcome the proposals to create a £10 disregard for parents with care on Income Support. Although we recognise that this may reduce work incentives, we believe that its introduction is vital, both in order for children to benefit from the payment of maintenance, and to provide an incentive for parents with care and non-resident parents to co-operate with the scheme. However, it should be noted that there is little research evidence on this issue. Whilst there have been persistent calls for a disregard of child support (see for instance Garnham and Knights, 1994; Bennett, 1997), and it will improve the standard of living of families on Income Support, we have no way of knowing whether it will act as an incentive in practice. In the US, disregards have been introduced alongside other measures such as mandatory wage withholding, which makes it very difficult to isolate the effect of the disregard alone, and while increased expenditure on enforcement does appear to improve compliance, the effects are not large, and it is by no means clear that this would prove cost-effective as a policy (Freeman and Waldfogel, 1998).

  4.  As parents with care (and by extension, taxpayers, who will be expected to fund the shortfall between increased rates of benefit and the amount of child support paid to parents with care) are being asked to accept a lower average amount of child support in exchange for higher rates of compliance, it will be vital to ensure that compliance rates do in fact rise substantially. Despite the promise of tougher sanctions and a better service delivery by the Agency, we have serious concerns about whether this will be achievable, especially in the context of continuing reductions in staffing levels.

  5.  As far as the reduction of liability in respect of children living with the non-resident parent is concerned, we have serious concerns about their equity, for a number of reasons. We agree with the adoption of the formula suggested in the White Paper, with its slight bias towards children in first families, not least because they face a substantially greater risk of poverty than other children. Although we recognise that it is invidious to discriminate between children of the same father, it is debatable whether it is necessary to take account of second families in purely income terms. US research (Meyer, 1998) has shown that fewer than two per cent of non-resident fathers would become poor even if no allowance at all were made for second families in calculating child support liabilities. In this context, we strongly question the wisdom of allowing step-children to reduce the amount payable to children of a first family to the extent proposed.

  6.  As is stated in the White Paper, responsibility for step-children is an issue only where no maintenance is being paid by their natural father, yet it is proposed both to allow the presence of step-children to reduce liability for child support across the board, and to ignore any child support which is paid in respect of them, effectively creating a "double dividend". The question of the household income of the second family relative to that of the first is also ignored, since the earnings of the non-resident parent's partner are completely disregarded. This is highly inequitable in its effects, since dual-earner couples will stand to gain the most, and have least need of any modification to the scheme (Paull, Walker and Zhu, forthcoming). Ironically, in those second families where incomes are very low, including those on Income Support and those with earnings below £200 per week, where real hardship may be experienced, liability will not be reduced by the presence of natural or step-children in the household, since they are subject to the minimum payment provisions.

  7.  The results of the income simulations carried out by IFS suggest that the proposals will have a limited effect on child poverty in mother-headed households[1]. Because the amounts generated are smaller than under the existing system, compliance levels would need to increase simply in order to preserve the status quo. Children in second families would fare slightly better under the reforms; it should, however, be borne in mind that the actual proportion of children in second families is far smaller than those living in mother-headed households.

  8.  The decision to make all non-resident parents pay a minimum amount of child support is supported by two main rationales; the symbolic honouring of the child support commitment, and the creation of a normative expectation of payment. Although we recognise that payment of the minimum amount may cause hardship to some absent parents, we accept that it may be important to establish a regular pattern of payment from the outset, in order to maximise the chances of future compliance, although there is in fact very little research evidence on this point. Whilst there is an observed relationship between payment at a given dates and at subsequent dates, this appears likely to be due to individual propensity to payment, rather than the effects of policy, and as Meyer and Bartfield (1996) observe, those who are partially compliant with child support liabilities tend to polarise into "payers" and "non-payers" over time. We would also argue that this provision should be monitored and reviewed after a period, since the cost of collecting these small sums is likely to outweigh any potential benefit, at least in the short term (Barnes et al, 1998).

  9.  The question of whether or not to take account of the earnings of the parent with care or a non-resident's partner is a difficult one. Not taking account of the income can lead to claims of unfairness, which may have negative implications for levels of compliance (Lin, 1997; Barnes et al, 1998) whilst taking account of it introduces additional layers of complexity into the assessment process. One solution, which has been adopted in reforms to the Australian child support system, is to disregard earnings below a certain threshold, set high enough to exclude the majority of women earners; for instance, average male earnings (Barnes et al., 1998). This has the potential to improve perceptions of fairness, but does not compromise the simplicity of the scheme, as the need to undertake additional assessment arises only in a minority of cases.

  10.  The treatment of income for the non-resident parent appears to favour those who are richer, as income from savings is ignored, and they are also able to reduce liability by making large payments into a pension scheme. It is obvious that this simplifies the assessment procedure, but it has the potential to result in serious inequities, particularly in a context where those on subsistence levels of income are being required to make a minimum payment. Moreover, the onus for challenging the assessment in cases where declared income is unrepresentative of real resources should not be on the parent with care, as it will almost inevitably result in bad feeling between the parents (Davis et al, 1998).

  11.  The use of the provision for exceptional circumstances to be taken into account will require careful monitoring, as experience suggests that it will be very difficult to limit these discretionary powers in the manner desired. They are also more likely to be used by those on higher incomes, who have access to professional advice, than by poorer non-resident parents, and are thus another potential source of inequality.

  12.  We are in favour of the proposals for reducing liability in respect of shared care, except where care is shared equally. In this case, it appears more equitable, and more protective of the child's standard of living, to base liability on the relative income of the two parents. This could be done either by a percentage variation in the child support due based on the percentage differential in the earnings of the two parents (which would involve an assessment in almost every case of shared care, and is therefore not ideal ) or by ignoring the income of the parent with care below a certain threshold (see para 9 above) and then applying a percentage. This would involve additional calculations in only a very small minority of cases.

  13.  The reduction in liability for shared care appears likely to increase contact in marginal cases, but there are situations in which this would not be in the best interests of the child. This is therefore another area which would require monitoring, especially in cases where a non-resident parent who has previously had no contact requests this on what appear to be purely economic grounds.

  14.  In conclusion, we would argue that the proposals, in trying to achieve transparency, and to take account of the competing demands of pressure groups, may have simplified the real world rather more than is good. Reducing child poverty must be a key aim of any child support policy; achieving this may require more consideration of the resident and non-resident parent's household incomes than is currently anticipated.

September 1999


  Barnes, H, Day, P, and Cronin, N (1998) Trial and Error: a review of UK Child Support Policy, London; Family Policy Studies Centre.
  Bennett, F (1997) Child Support: Issues for the future, London: Child Poverty Action Group.
  Corden, A (1999) Making Child Support Regimes Work, London: Family Policy Studies Centre.
  Davis, G et al (1998) Child Support in Action, Oxford: Hart Publishing.
  Freeman, R and Waldfogel, J (1998) "Dunning Delinquent Dads: the effects of child support enforcement policy", NBER Working Paper 6664.
  Garfinkel, I et al (eds) (1998) Fathers Under Fire: the revolution in child support enforcement, New York: Russell Sage.
  Garnham, A and Knights, E (1994) Putting the Treasury First: the truth about child support, London: child Poverty Action Group.
  Lin, I-F (1997) "Perceived fairness and compliance with child support", Wisconsin IRP 1150, November 1997.
  Meyer, D (1998) "The effect of child support on the economic status of non-resident fathers' in Garfinkel, I et al (eds) (1998) Fathers Under Fire: the revolution in child support enforcement, New York: Russell Sage.
  Meyer, D and Bartfield, J (1996) "Compliance with child support orders in divorce cases", Journal of Marriage and the Family 58 (1); 201-12.
  Paull, G, Walker, I and Zhu, Y (forthcoming) "Child Support Reform: Some Analysis of the 1999 White Paper", paper to be presented at a seminar on child support reform 30 September 1999.

1   See separate paper submitted by Ian Walker and Gillian Paull. Back

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