Select Committee on Work and Pensions Written Evidence

Memorandum submitted by Professor Stephen McKay


    —  Whilst there is public consensus that NRPs should pay for their children, even quite basic details of the appropriate calculation are controversial (PWC income, overnight stays, second families).

    —  The White Paper does not mention how the level of proposed maintenance was calculated, and if it is intended to reflect the costs of raising children. This contrasts markedly with the recent reform process in Australia, where it was central.

    —  If there is no maximum award, then the formula may reflect children sharing in NRP living standards and not poverty alleviation. Using gross income and fixed percentages implies that higher earners will pay an increasing percentage of their disposable income in child support.

    —  Where the formula is used, it seems that NRPs with one child will pay less (or, from the PWC perspective, receive less), NRPs with three or more children will pay more and, those with two children will pay roughly the same.

    —  The White Paper appears to have no recognition for different patterns of care, including shared care and the effect of overnight stays—long a difficult area.

    —  It remains to be seen how far parents will "negotiate" a private agreement in the shadow of a fixed formula that is widely known about and easily calculated.

    —  Joint birth registration may have important general merits but may become confused with a tactical approach to tackle paternity issues for a minority of child support cases (many currently compelled to use the CSA).


  1.  In 2006 the Government finally lost patience with trying to make child support—and especially the Child Support Agency (CSA)—work as it was intended. Following the failure of its earlier reforms to make progress, and continued poor performance statistics, a new approach was thought to be needed. An independent review (under Sir David Henshaw) was started in February 2006 and reported in July (with an accompanying DWP response). In December 2006 a DWP White Paper set out a new direction for child support, with a greater emphasis on people making their own arrangements and the proposal for a new body with strengthened enforcement powers. The policy emphasis strongly shifted towards reducing child poverty as the primary objective. Proposals for child support reform have thus taken less than a year from announcing an external review until the publication of the White Paper.

  2.  This initial analysis of the 2006 White Paper inevitably focuses on areas of concern and uncertainty. It is, however, good to see the difficult issues of child maintenance being given a high priority.


  3.  Government wants the non-payment of child support to be socially unacceptable; Hutton (December 2006) "I hope that the reforms that I am bringing forward today will succeed in bearing down on the unacceptable culture that has grown up that says that it is okay for people not to pay for their kids. It is not". However, it has proved difficult to design a child maintenance system that commands widespread consensus and on many points of detail there many people (not a small "hard core") who disagree with key aspects of the system. There is consensus that people should pay, but the calculation has very controversial elements, as we now see.

  4.  The gaps between beliefs and the system are quite wide. In Table 1, using a survey from March 2004, we show the answers to some key questions apparently in conflict with the direction of the White Paper reforms:

    —  Most people (72%) believe that the PWC's financial circumstances should be included in any calculation (24% disagree, 3% unsure).

    —  Few believe (25%) in taking account of second families (8% unsure).

    —  A slim majority (54%) believe in discounts for overnight stays (11% unsure).

Table 1

Per cent who agree with each statement MenWomen All
Do you think that a father who does not live with his child or children should always be made to make maintenance payments to support them? [YES] 788481
Do you think that the amount of maintenance a father pays for his child or children should depend on how much he earns? [YES] 818784
Do you think that the amount of maintenance the father pays for his child or children should depend on the mother's financial circumstances? [YES] 7669 72
Do you think that if the father has another child or children with someone else, he should be allowed to pay less maintenance for the child or children he does not live with? [YES] 3220 25
Do you think that maintenance payments should be a fixed proportion of the father's income regardless of how much he earns, or should there be a maximum amount of maintenance payable?
Per cent of income44 4645
Maximum4646 46
Don't know118 9
Do you think that mothers who claim benefits should be made to claim maintenance from the father of their children through the Child Support Agency (CSA)? 5452 53
If mothers who claim benefits receive maintenance payments for their children, do you think that they should be able to keep some or all of these maintenance payments or should they go to the government?
Mother should keep all maintenance51 5151
Mother should keep some maintenance30 2829
All maintenance should go to the Government 11910
Don't know812 10
When children live with their mother but often stay overnight with their father, should this be taken into account when calculating his maintenance payments [YES] 5553 54

Source: National Statistics Omnibus Survey—March 2004, own tabulations

Questions in bold italics seem at odds with the direction of policy in the White Paper



  5.  The 2006 White Paper set out four principles for the reform of child maintenance. To: Help tackle child poverty; Promote parental responsibility; Provide a cost-effective and professional service; Be simple and transparent. (DWP 2006: paragraph 1.28). Crucially it identifies "tackling child poverty the first and most critical test for reform".

  6.  Many of these objectives reflect those of Henshaw (2006), but a potentially missing element he identified is that the structure needs to be "fair, credible and accepted as legitimate" (p16). The White Paper does not mention how the level of proposed maintenance was calculated, and if it is intended to reflect the costs of raising children or some other criterion.

  7.  This contrasts markedly with the recent reform process in Australia, where issues of fairness in meeting the costs of children were paramount. This led to key changes—such as taking account of the higher costs of teenage children, and including both NRP and PWC income (see Appendix 1 for details and sources).


  8.  The proposals will take until 2013 to be fully implemented, it seems. If so, it seems likely that for a while there will be "old rules", "new rules" and "newer rules" cases all running alongside each other. This is likely put pressure on who is allowed to "convert" (and who is not) between systems.

C-MEC's status

  9.  Making C-MEC a "non-departmental public body" (NDPB) is quite a significant reform, and it remains to be seen how much it operates (or should operate) at arms length from ministers. In particular, it will have considerable powers and the ability (it seems) to easily access HMRC data. Most other NPPBs seem to be quite small, and advisory in tone, often concerned with appeals or regulation (like the Food Standards Agency, Office for Fair Access, the Research Councils, the Pension Protection Fund). A body with such extensive powers, and designed to raise a lot of money, looks like a new departure. Henshaw wanted no mass conversion of cases from CSA to C-MEC, [64]but this seems the current direction.

Features of the proposed (White Paper) formula

  10.  The White Paper proposes a simplified assessment formula for child support. Child support is expected to be set at 10%, 15% or 20% of gross income for one, two and three or more children. There are reductions for so-called "second families".

  11.  Two key aspects used in past CSA algorithms appear to have been dropped: a maximum level, and deductions for overnight stays, which we discuss below.

  12.  The use of tax information follows practice elsewhere (eg Australia) and has long been suggested. Fixed-term awards should dispense with too many reassessments thwarting accurate assessments and enforcement.

No maximum

  13.  The new formula lacks an overall maximum—at least this is not mentioned in the White Paper. If there is no maximum, then in some cases the formula becomes about children/PWCs sharing in NRP living standards (across families) and not poverty alleviation, even though the latter seems the key objective of the reform. There may be good arguments for not limiting child support, but the effect of not having a maximum takes the calculation to potentially very high levels (in a few cases) and risks alienating a relatively influential group—it might also affect the discussion in cases where top-up maintenance (such as for school fees) is sought in the courts. It might be thought that the lesson of CSA mark i was that alienating the highest income NRPs generated more adverse heat and publicity than was really worth it. CSA mark ii included a high maximum.

Shared care and overnight stays

  14.  The new formula does not appear to have any provision for the sharing of care by parents, a radical departure from the past formulas used in the UK (and elsewhere). At present, each night that children spend with the NRP each week (minimum 52 per year) reduces child support by 1/7. So, calculations may be reduced by 14%, 29% and 43% if care is shared for 1, 2 or 3 nights a week. Clearly, those with care of this kind would face substantial increases in the levels of child support expected, if their ex-partners opted to use the new C-MEC formula (as they are legally entitled to do). A parent with 51% care could go to C-MEC and would receive the same level of maintenance as a parent with 100% care. These are rare, but not wholly exceptional, cases, and easily seized upon as examples of unfairness by those seeking to challenge the system.

  15.  This is a tricky area. There are good reasons not to mix up cash and care. However, having no recognition at all for the sharing of parenting brings a focus on the money that NRPs can provide, to the exclusion of other roles they may play in their children's lives. The existing formula is already used as a guide by those going through the courts or sorting out their own arrangements where such considerations may be more common than for current CSA cases.

  16.  The extreme case of overnight stays is where care is shared 50:50. Henshaw wanted to exempt such cases from the child support formula, [65]but the White Paper is silent on this matter. This implies treatment as now, where even exactly shared care gives rise to a liability. Nor should there be any presumption that those with shared care are always those able to resolve things amicably—indeed shared care residence orders have been used to help settle acrimonious cases between parents. [66]

Benefit recipients to pay £7

  17.  Taking £7 from benefit recipients means taking money from one of the poorest groups in society in order to marginally offset the poverty of another poor group. This is particularly punitive given that single people receive just about the lowest amounts of anyone receiving benefits (especially those under 25: £45.50 a week). In Table 2 we show benefit rates (JSA, IS and child tax credits) for a single NRP and a lone parent PWC with one child. PWCs are clearly badly off, but (even with just one child) have double the income of single NRPs before any child support is paid.

  18.  A single male aged 18-24 would be expected to survive on £38.50 pw, compared with the PWC's income exceeding £126. It is difficult to see how a NRP in such circumstances would be able to spend much (if anything) on their children from such an income (such as costs of visiting them, presents, etc).

Table 2

AgeNRP income PWC incomeRatio of incomes Money difference
-Before child support
18-24 years£45.50 £119.282.6£73.78
25-59 years£57.45 £119.282.1£61.83
After £7 child support is paid
18-24 years£38.50 £126.283.3£87.78
25-59 years£50.45 £126.282.5£75.83

Non-working NRP and non-working PWC, one relevant child with PWC. In practice costs of housing and Council Tax are also likely to be met

Comparison of amounts—NRP not receiving-benefits

  19.  A fixed percentage of gross income equates to a rising proportion of disposable income in a progressive tax system, so those on higher incomes (particularly higher rate taxpayers) are likely to face the greatest changes in levels of assessments—leaving aside issues of shared care.

  20.  Economic theory would tend to suggest that spending on children increases as income rises, but falls as a percentage. In the existing formula, a constant share of net income is payable as child support. The proposed formula would mean some NRPs spending an increasing proportion of their disposable income, as their incomes rose.

  21.  However, most of those affected by child support reform are likely to be on more modest incomes—the kinds illustrated in Figure 1.

  22.  Generally speaking for those in this denser part of the income distribution:

    —  those with one relevant child will pay less (or, from the PWC perspective, receive less);

    —  those with three or more children will pay more (or, from the PWC perspective, receive more); and

    —  those with two children will pay roughly the same.

  23.  In any event, there are likely to be a large number of potential "winners" and "losers", comparing the old, new and even newer assessment formulas. For those on higher incomes, the extra amounts paid by those with three or more children, can be substantial—see Chart in Appendix 2. Those few fortunate to be earning £80,000 would be paying an extra £55 per week for three children (taking 20% of gross income compared with 25% of net income). Conversely, with one qualifying child and an NRP earning £15,000, the PWC might lose about £6 per week.

  24.  It is worth stressing that these calculations do not include pension contributions, whose role in the new system is unclear. [67]

  Note: "old" means the 2003 formula and "new" means the formula proposed in the 2006 White Paper. The 2003 formula is generally thought to have lowered average child support for those with a positive assessment, compared to the prior very complex formula, whilst increasing the number needing to pay some level of child support (ie fewer zero assessments).

Historic income information

  25.  Where people are unable to reach their own agreement, a new even simpler formula will be applied. It will be based on gross income, and use income data from the tax authorities. In a sentence that appears to belie several years of problems with tax credits and income volatility, the DWP is happy to: "believe that historic tax income information is close enough to the current financial position of most non-resident parents at the time to be an acceptable and sufficiently robust basis for assessment" (DWP: p 61).

  26.  This historic approach may make it difficult to claim that one is paying/receiving the equivalent of the "C-MEC rate", without keeping accurate records of past income and tax paid.

Exclusion of PWC income

  27.  Most US States uses a shared-incomes approach where the income of both NRP and PWC is included (see Australia is introducing such a system (see Appendix 1), and it was used in CSA mark i. However, both CSA mark ii, and the proposed changes, as well as many jurisdictions, ignore PWC income.

  28.  Including PWC incomes would mean collecting an additional piece of data, but one already generally available for tax credit purposes and where there are few incentives not to co-operate. Its inclusion could, however, marginally reduce incentives to work.


  29.  Henshaw wanted fees charged to PWCs. Without such a fee, there is no reason for PWCs not to use the CSA as a "tactic", he argued. The DWP's response has been to assert that NRPs would always be the ones paying fees. Both approaches seem to neglect a variety of charging mechanisms and potential incentive approaches. If the logic relates to the position of children, then by extension NRPs with dependent children might also be candidates for an exemption from fees.

  30.  The fact that C-MEC fees seem likely to be payable only by NRPs and not PWCs makes that a "power" that PWCs might elect to use. Separation is often a difficult time, and decisions at such a time not always entirely rational. Why accept less than C-MEC would obtain, especially when you can hit your ex-partner with an extra fee at the same time!

  31.  We might want to consider how a NRP would react, having offered a reasonable sum of maintenance, to an assessment that they should pay a similar (or lower) figure, and being charged for the privilege.

  32.  In services exemption from fees is at least partly based on ability to pay and not simply on (parental) status. Other ways of using fees would be to incentivise a quick supply of information, or to base fees on the total amount collected rather than being flat-rate, or to consider different kinds of fees for NRPs and PWCs. The experience with CSA mark i was that within a few years fees were abandoned in the light of poor delivery, and their addition to arrears makes for a higher level of debt owed to the state.

Negotiation and private arrangements

  33.  A key aim of the proposed reform (for both Henshaw and DWP) was that parents should be expected to agree a relevant figure between themselves. However, such discussions might occur at a stressful time, when an independent ("objective") figure might be preferable. It remains to be seen how far parents will "negotiate" a private agreement in the shadow of a fixed formula that is widely known about and easily calculated. During any discussions one parent can always turn round and say that they can get more (or pay less) if they go to C-MEC.

A register of child support agreements

  34.  The White Paper mentions, as a possible information source, "a register of private maintenance agreements made available via the helpline and a website." (paragraph 2.28) but nowhere discusses how this is to happen. The only other mention is in a consultation question.

Joint registration of births

  35.  It is a laudable idea that children should be aware of their parentage, and have this recorded on the birth certificate. Since December 2003 their inclusion on the birth certificate has conveyed parental responsibility on unmarried fathers. However, whilst this is not spelled out, the key relevance to child support legislation is likely to be the way that parentage may be deemed (rather than having to be proved). At present, married couples and those couples both identified on birth certificates are assumed to be liable for child support, and the onus to disprove this is on the putative father (and this may be onerous in practice). Where the father is not named, there is more of an onus on the CSA to prove paternity (e.g. through DNA testing).

  36.  So this reform—which has merits on other grounds—may become confused with a tactical approach to tackle paternity issues for a proportion of child support cases. The use of paternity establishment in-hospital is credited with increasing child support for unmarried parents. In the UK, births need not be registered for 42 days, and this may be at a register office (though can be in hospital).

  37.  An immediate question is the role that fathers would play in having to confirm their paternity. If attendance is needed (currently it isn't needed for married couples, but is needed for unmarried couples) how could this be enforced? If attendance isn't needed, would those so named be informed about their inclusion? Well-handled, this could be a valuable change to treat married and cohabiting couples in comparable ways—badly handled this could create problems of proof and actions against incorrect assignments of paternity.


  38.  The CPAG Debt Handbook 2006-07 (p75) notes that even within the existing framework, "The enforcement powers of the CSA are potentially draconian". This contrasts rather markedly with the Government's perception of having "only limited incentives and tools to ensure compliance" (p22). The CSA White Paper proposes to do away with the need to obtain a Liability Order (LO) from a magistrates court, which is currently the key gateway to further enforcement action (apart from DEOs which CSA may issue). It argues that obtaining LOs is "a slow process that takes on average more than 100 days to complete". However, the reasons for this slow speed are not described, and this is in principle a significant change to the enforcement procedure.

  39.  CSA has managed to double the number of LOs it obtains in the last year (to 12,000), which was below 4,000 on a few years ago. However, by comparison Local Authorities may obtain over 2.2 million such orders in the space of a year (Hansard, 14 May 2003 col 304W data for 2000-01 for England). Whilst Magistrates are heavily restricted in what they may challenge, the poor accuracy record of the CSA's assessments makes this a potentially quite concerning development, particularly for those who tend to ignore repeated reminders relating to legal action. In 2005 the Child Support Agency Standards Committee reported to the Work and Pensions Select Committee that 65% of the cases where a liability order was sought were inaccurate or procedurally incorrect in some way. [Work and Pensions Select Committee minutes of oral evidence given on 15 February 2006, HC920-i]. This was based on a small sample of 54 cases from 2003-04. I'm not aware of more recent figures, and "The Standards Committee has not met since September 2005 due to the departure of its Chairperson. The Standards Committee will be reformed during 2006-07." (Child Support Agency Annual Report and Accounts 2005-06, p28)

  40.  The use of credit reference agencies seems overdue, and (in common with student loans) it will be interesting to see how the agencies and their clients make use of such data drawn from Governmental policies. This approach might be particularly effective for dealing with the self-employed who rely on various forms of credit.

  41.  Other parts of the public sector face difficulties in enforcing monies owed, but there are examples of success. In 2002-03 collection rates for magistrates fines were only 55%, but stronger enforcement increased this to 80% by 2005-06 (Lords Hansard 19 June 2006).

Website—naming and shaming

  42.  Many US states make use of "ten most wanted" webpages for those with the highest arrears—typically to help trace them. There is no real evidence on their effectiveness. Often those with relatively low-paying jobs are said to owe tens of thousands of dollars. This eye-catching initiative seems less familiar to the UK, where we do not have lists collated relating to very serious criminal offenders, lists of sex offenders, or ASBOs and the like. It would also, presumably, run risks of identifying the children affected and their reactions to seeing in their fathers on such a public site would be of interest (to say the least) and perhaps not in their best interests.

  43.  Approaching half those responding to the BBC-news feedback service ("Have your say") adopted a view that absent parents (fathers) should only be confronted by those powers that also apply to parents (mothers) "blocking" contact with children. These are important issues that are rightly kept separate but the F4J "case" does seem to have caught on in the public imagination. [68]It seems there is some anxiety about tougher maintenance enforcement powers (whilst clearly needed and overdue) without courts being—seen to—enforce contact orders. [69]Reviews of the working of family courts explicit rejected the idea of electronic tagging (curfews), which the White Paper wishes to apply to noncompliant NRPs. In both cases, however, the value of such a punitive measure is hard to fathom and the causal process for how it would have an effect rather opaque.



  44.  Details of the reforms in 2006-08 are available here:

  45.  Some key highlights from the summary report (available at$file/summary_report_15jun2005.pdf)


  46.  "The child support formula should provide a transparently fair basis for calculating child support. This requirement cannot be met if the Scheme aims to fulfil objectives other than sharing the costs of children equitably between the parents. For that reason, it is proper that child support obligations be based on the best available evidence of how much children cost to parents with different levels of combined household income."

    —  "child support payments will be calculated based on the actual costs of children;

    —  the combined income of both parents will be used to calculate child support payments, treating the income of both parents in the same way;

    —  both parents' contributions to the cost of their children through care and contact will be recognised; and

    —  children of first and second families will be treated more equally."

  "The costs of children for the purposes of calculating child support should reflect the following:

    —  Expenditure on children rises with age.

    —  As income rises, expenditure on children rises in absolute terms, but declines in percentage terms."

Potential child support calculations

  Note: "old" means the 2003 formula and "new" means the formula proposed in the 2006 White Paper. Conversion of net to gross income assumes contracted-in for S2P and no pension contributions, and calculations are taken from for 2006-07.


Atkinson A and McKay S, 2005, Child Support Reform: The views and experiences of CSA staff and new clients, Department for Work and Pensions Research Report No 232.

Atkinson A and McKay S, 2005, Investigating the compliance of Child Support Agency clients, Department for Work and Pensions Research Report No 285.

Atkinson A, McKay S and Dominy N, 2006, Future policy options for child support: The views of parents, Department for Work and Pensions Research Report No 380.

Department for Work and Pensions, 2006, A fresh start: child support redesign—the Government's response to Sir David Henshaw, Cm 6895.

Department for Work and Pensions, 2006, A new system of child maintenance (White Paper) Cm 6979.

Henshaw D, 2006, Recovering child support: routes to responsibility, Cm 6894.

January 2007

Parents should be invited to re-apply to the new body if they wish to continue their child support claim. This means there would be no need for conversion of cases between the two existing child support schemes. The redesigned system must not be contaminated by previous failings. [Henshaw 2006: p6]. Back

65   "Given that cases of equal, or near equal, shared care involve both parents taking financial responsibility for their children, I believe that these cases should be exempt from third-party involvement, with no provisions within the child support formula for transferring funds between parents." [Henshaw 2006: 49]. Back

66   In particular see D v D (Shared Residence Order) [2001] 1 FLR 495 (D v D) Back

67   The White Paper says, cryptically: "Further detailed work will be undertaken on how the system of assessing liability will treat pension contributions, because of the differences in the handling of pension contributions within the tax system; the aim will be to secure equal treatment of pension contributions in the determination of a child maintenance liability." [p63] Back

68   John Hutton: "In relation to child maintenance, we are talking about the obligation to comply with the law, but there is an equal and equivalent obligation on the part of the parent with care to ensure that any orders that the court makes in relation to access and custody are complied with, too." Hansard, 13 Dec 2006: Column 885. Back

69   The privacy of family proceedings makes it difficult to assess how matters of contact are handled, of course, though there are now steps towards greater openness. Back

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