John Fotheringham: Consultation on child support system yields poor return

Changes to the law on child support have been in place since 10 December, initially for a very limited number of new cases. Under the new CS3 scheme, the Child Maintenance and Enforcement Commission has been reabsorbed by the Department of Work and Pensions.

Despite the government’s extensive consultation exercise, the DWP has chosen to ignore almost all of the advice provided by professionals and stakeholders.

The last CMEC report, up to 31 July, tells us that the cost to the taxpayer of collecting each pound of statutory child maintenance was 34p. The Comptroller and Auditor General’s report in February made it plain the main driver for the changes to child support was to reduce the cost rather than remedy its many injustices. Any improvements in child support will be incidental.

One improvement is that the maintenance calculation will depend upon the payer’s gross income, assessed through his or her tax return to HMRC, rather than net income.

It has been too easy for some non-resident parents – particularly the self-employed – to adjust the terms and timing of their income in order to defeat or minimise a child support claim. This should now be much more difficult.

The disadvantage is that it will be impossible to effect a change in the level of maintenance, up or down, within the year from the date of the last calculation unless the change has represented an increase or decrease of 25 per cent or more. For example, a non-resident parent earning £500 gross per week who suddenly has a drop in income to £400 per week will not be allowed to change the maintenance calculation. A parent with care whose former partner’s income rises from £500 to £600 per week will have no increase in the amount of maintenance received.

This, no doubt, will be cheaper and easier to administer from the government’s point of view but is surely neither fair nor reasonable.

No system can properly deal with the endless varieties of possible family circumstances, and therefore the child support system has allowed a series of “variations” so that the basic arithmetical formula can be adjusted. In particular, it was possible under regulation 18 of the Child Support (Variations) Regulations 2000 to deem the non-resident parent to have a notional income from certain assets above a certain level whether or not it was achieved in fact. In the CS3 scheme that variation will disappear and a wealthy non-resident parent may be able partly to avoid child support maintenance liability by accumulating capital.

Similarly, under regulation 20, a non-resident parent who was patently “at it” and living a high lifestyle while declaring a very low income, could be subject to a variation even without direct evidence of the precise source of income. That was, of course, very expensive to administer and was almost always refused at first instance by the CSA’s decision maker. Parents with care had a much higher rate of success before the child support tribunal using that regulation but, I regret, it is also to be abolished in the new scheme.

Probably worst of all, the new scheme fails to put right a major problem which has existed since the CS2 system came into effect in 2003 under CMEC. If parties reach a written agreement about aliment – and that can be summarily enforceable in Scotland – then either party may nullify that agreement after 12 months simply by applying for child support maintenance. Agreements are therefore a much less flexible way to reach a reasonable solution to a family problem than they should be. The government has said that it would prefer people to reach their own agreements rather than use the child support system but their policy in relation to the 12-month rule seems to fly in the face of that.

The new scheme, from the government’s point of view, is child support on the cheap. The CS3 rules now apply to all new cases in which there are four or more children in the same family – about 150 cases per year across the UK.

Once these cases are seen to be “working well” (though there are no published criteria for that judgment) then CS3 will be applied to all new cases with two or more children.

Once these are working well, according to the DWP, they will apply to all new cases, and existing cases will start to be transferred to CS3.

• John Fotheringham WS is a director and family law specialist with Lindsays