The Child Support Act 1991

The Liverpool Law Review Vol. XVI(1) [1994]

THE CHILD SUPPORT ACT 1991

The party of the family may soon be blamed for a huge increase in family tension leading in some cases to breakdown, homelessness and unem- ployment. The culprit is the Child Support Agency (CSA) intended to make parents face up to the consequences of separation and divorce. But its operations seem to have been designed to work in the best interests not of the children but of the Treasury. 1

This comment in the Times contrasts sharply with the avowed purpose of the Child Support Act 1991 ("the Act") which was seen as an essential part of the balanced programme of reform of the family justice system in England and Wales which began with the Children Act 1989. 2

The media has had a field day with horror stories abounding of the effect the formula assessments produced by the Agency were hav- ing on absent fathers, their new families, existing Court orders made before the Act came into force and the relationship between those fathers and the children for whom they were to provide maintenance. Such has been the furore that the minister of state for social security with responsibility for the CSA was moved to say that the "formula is no poll tax. "3 The Social Security Committee of the House of Commons responded to the growing concern by hearing evidence on the first six months of operation of the CSA and publishing a report. 4

Much of the evidence of the way in which the CSA is operating is at this stage anecdotal but the criticism which has been levelled at the Act suggests that it will not last long in its present form and prompts the question: what went wrong?

History

The Government White Paper which preceded the Act was enti-

1 The Times, Leader 27.10.93, "Fleecing the father". 2 Foreword, Children Come First, Cm 1264 Vol 1, HMSO, October 1990. 3 Alastair Burt, The Times, 16.10.93. "Families Need Fa the r s - who pay

Up". 4 The Operation of the Child Support Act, HMSO, 1.12.93.

98 The Liverpool Law Review Vol. XVI(1) [1994]

fled Children Come First s - - a laudable aim which reflects the guiding principle of the Children Act 1989 that the welfare of the child is the paramount consideration. 6 The White Paper addressed the problems of maintenance of the children of separated parents and looked at a number of issues.

Maintenance was being administered by a number of different bodies: by magistrates courts, county courts and the High Court and by the DSS through Court orders and voluntary payments. The methods used by each of these bodies in calculating the level of awards varied considerably as did the times taken for awards to be finalised. The level of maintenance payments averaged only £18.00 per week 7 and large numbers of single parents (invariably mothers) were receiving income support at the taxpayer's expense either because the absent parent was making no payment or the payments were too low to lift the lone parent off benefit. The picture was of a fragmented and haphazard maintenance assessment and collection procedure with direct costs for the Treasury and increased depen- dence of single parents on income support.

The Solution

Single mothers should be encouraged to return to work, the bill for the taxpayer should be reduced, a consistent method of calculating a realistic maintenance award for children should apply throughout the country with an efficient collection service, lone parents on means-tested benefits should be under a duty to pursue the absent parent for child support payments and the assessments should be subject to annual review?

5 Cm 1264, 2 Vols, HMSO, October 1990. 6 Children Act 1989, s.1(1). The Child Support Act, s. 2, states that the

Secretary of State or any child support officer in considering the exercise of any discretionary power under the Act shall have regard to the welfare of any child likely to be affected by his decision. There are few discretionary powers in the Act but one major discretion is whether or not to impose a reduced benefit direction under s.46.

7 Supra n,5, at Vol I Chapter 1 8 Supra n.5, at Vol 1 Chapter 2

Current Developments 99

The Method

A new Child Support Agency (CSA) 9 operating as a next steps benefit agency would be established with eventual exclusive responsibility for assessing and collecting child support payments for the natural children of absent parents. To establish consistency a formula would apply nationally with standard exemptions from the income which was to be taken into account in assessing the level of the child support payments. 1° Appeals by aggrieved parties would be allowed on limited grounds to a new Child Support Appeal Tribunal under the aegis of the Independent Tribunal Service and for which legal aid would not be available. 11 Non-cooperation with the Agency by the absent parents would be penalised by high interim assessments 12 and by a parent with care on benefit by the possibility of a reduced benefit direction of 20% of that parent 's income support allowance for 6 months and 10% for a further 12 months. I3 Absent parents them- selves on benefit would be expected in most cases to contribute a minimal payment by way of child support. 14

The Work Incentive

In advance of the Act coming into force changes to existing social security regulations meant that the first £ 15 of maintenance received would be ignored for the purpose of calculating a single parent 's entitlement to family credit, housing benefit and council tax benefit. At the same time the qualifying weekly hours for family credit were reduced to 16 from 24 with corresponding changes to the provision re-

9 Child Support Act 1991, s.13. The Agency is not referred to by name in the Act but s.13 gives the Secretary of State power to appoint child support officers and a Chief Child Support Officer.

10 Child Support Act 1991, s.ll and Schedule 1. 11 Child Support Act 1991, s.18, s.20 and s.21. An appeal only lies on the

grounds that the decision in question was (a) made in ignorance of a material fact or (b) based on a mistake as to a material fact or (c) was wrong in law.

12 Child Support Act 1991, s.12. 13 Child Support Act 1991, s.6 and s.46 and Part I Child Support (Main-

tenance Assessment Procedure) Regulations 1992, SI 1992 No.1813. 14 Supra n.13, at Schedule 1, Para 7.


lating to income support, is Parents in receipt of income support are not treated so favourably.

Any maintenance received is deducted pound for pound from income support entitlement. Parents in receipt of income support are no bet- ter off until they are able to come off income support altogether although they then face the loss of associated benefits such as free school meals and prescription charges.

The Courts

The Courts would have a continuing role for all those matters which did not concern new formula weekly maintenance payments for the natural children of absent parents. 16 Lump sum and property adjustment, spousal maintenance, disputes concerning parentage, 17 contact, residence, specific issues and prohibited steps, top-up child maintenance payments over and above the formula, school fees and the additional costs for disabled children, all these issues remain with the courts. The Courts would still retain jurisdiction over those step- children who were children of the family in divorce proceedings.

Phasing In

The CSA will have exclusive jurisdiction by April 1997 for all child support matters. TM Until then existing court orders would be phased in and the main jurisdiction of the CSA initially would be over cases where there was no court order or written agreement and new benefit cases. To soften the blow likely to be felt by some absent parents some new assessments would be pegged to increases of £ 20.00 in the first twelve months before the full effect of the assessment was

15 Social Security Benefits and Contributions Act 1992, s.124 and Income Support (General) Regulations 1987 Sl 1987, No 1967 (as amended) Reg. 5(1) and Family Credit (General) Regulations 1987 St 1987. No 1973 (as amended) Reg.4(1).

16 Child Support Act 1991, s.8. 17 Child Support Act 1991, s.26. 18 Part I the Schedule Child Support Act (Commencement No.3 and

Transitional Provisions) Order 1992 SI 1992. No.2644.


felt. 19 (The impact of the new maintenance assessments has been softened by an amendment allowing for phasing in over a longer period effective from February 1994. This was one of the recommenda- tions of the Social Security Committee accepted by the Government.) Existing benefits cases would only be phased in when resources allowed, prior to full implementation.

The Formula

The formula is the focal point of the scheme. It is designed to eradicate the vagaries and variations inherent in the previous mixed jurisdictions for child support. 2° It can only he applied with accuracy by computer and space does not permit a full explanation of the alge- bra involved nor for a description of the terms used in the equations. The Child Support Appeal Tribunal will not be asked to calculate an award of child support but to remit the matter to the CSA for recalcu- lation. 21 The principles behind the formula are, however, quite sim- ple. Both parents are expected to contribute to the maintenance bill for their natural children m the parent with care and the absent parent. Parents with care who are receiving income support, however, are deemed to have no income to be taken into account and the absent parent alone will he expected to maintain. The maintenance bill 22 is calculated using income support figures for children, the applicable family premiums and, rather more controversially, a carer's premium reflecting the income support figure for the caring parent. The assessment therefore includes an allowance for the parent with care. (This element has also been amended to reduce the amount of the carer's element by 25% when the youngest child reaches 11, by a further 25% when that child reaches the age of 14 and will disappear en- tirely when the youngest child reaches the age of 16. This was again a recommendation of the Social Security Committee.)

The income of each parent available for maintenance is assessed rigidly with very limited allowances. Tax, National Insurance and

19 Supra n.18 at Para 7. 20 Supra n.5 at Chapter 3. 21 Child Support Act 1991, s.20(3). 22 Child Support (Maintenance Assessment and Special Cases) Regulations

SI 1992 No.1815.


half the pension contributions paid by that parent are deducted to find the available income and an allowance is made for housing costs but, effectively, nothing else. No account is taken, for example, of debts which may have been incurred during the marriage or period of cohabitation, hire purchase payments, the costs of step children, trav- elling expenses for maintaining contact with natural children, any clean break orders made by the court, or any agreements reached between the parents. The formula overrides all these. Once available income has been assessed 50% is then available to meet the child support bill. In some cases where the absent parent has a high assessable income a proportion of the additional available income is available to meet the maintenance bill. 23

The Effect of the Formula

In almost all cases the formula assessment will produce much higher assessments. These higher assessments will not be reduced on appeal simply because an absent parent cannot afford them: that is not within the powers of the Child Support Appeal Tribunal. The new level of assessments has been described as "'realistic "24 by its supporters and inflexible and unrealistic by its opponents because its is imposing a complete sea change on the way in which these matters were decided before the Act and smacks of retrospection. 25

Practical Problems

Parents with care are returning to Court to revoke existing maintenance orders in order to invoke the new Child Support assessments. 26 Absent parents are told they will have to stop seeing their

23 The proportion has been amended to take account of the number of children for whom an absent parent is responsible.

24 Alastair Burr, supra n.3. 25 For example Frank Field M.P. in The Times, 9.10.93, "Right idea but wrong

men to chase for cash"i Solicitors Family Law Association. The Times, 21.10.93.

26 Teeside County Court, 25.10.93 reported in The Times, 26.10.93. The Judge said it was "inappropriate" and commented "it seems to me that an assessment from the Agency is not necessarily in the best interest of the children. It might produce a higher figure but it may be that other


children if that is the only way that they can afford the maintenance payments. 27 An absent parent 's new family is suffering because the appropriate absent parent for his step-children is not meeting his re- sponsibilities. Absent parents are returning to Court to seek to alter orders made before the Act as the formula assessment takes no account of them.

It is interesting that the media is concentrating its attention on the plight of the absent parent who has, probably, not sought to avoid his maintenance obligations in the past and the CSA has been particularly criticised for going for these soft targets. 28 Much concern before the Act was expressed about the possible effects of the reduced benefits direction. Little has been heard of this since. In her evidence to the Social Security Committee the Chief Executive of the CSA said that only 22 reduced benefit directions had been made by the end of September 1993. 29 What is happening is that absent parents have sought to re-open clean break orders made before the Act came into force and an increasing feeling that child support at these levels gives entitlement to contact. In Crozier the High Court in Liverpool decided that an assessment by the CSA on an absent parent was not grounds to re-open a clean break order as this only affected the position of the former spouses and did not affect the liability of the absent parent towards his children. ~°

Conclusion

The evidence is admittedly anecdotal but twelve months into the Act it is clear that the way in which it has been operated has produced considerable anguish and distress for some absent parents with com- mensurate harm to their relationship with their children and former partner. What may once have been harmonious and civilised is now confrontational and acrimonious. Is this a price worth paying? To achieve success the Act and the CSA must command support. What

matters outweigh the purely financial." 27 "Child Agency tells father to cut visits", The Times, 27.10.93. 28 The Social Security Committee decided to investigate the operation of the

Act for this very reason. 29 Supra n.3, at 18-19. 30 The Times, 9.12.93.


the Act seeks to achieve is a change in culture which is broadly sup- ported by all but the method is now in question. 31 Remember what happened to the Poll Tax. At the present public support for the Act is waning. This compares with the position before the Act became op- erational when the idea of chasing the feckless father appealed to those both on the right and left of political opinion. 32

There are a number of possible reasons for this. First, with time, the realism of the formula and principles behind it may command universal respect but certainly not yet. The change though much heralded has been traumatic for many and upset all financial expecta- tions. Second, the formula through its rigidity takes no account of the present reality following separation and divorce. Third, the CSA ap- pears to have targeted those absent parents who are prepared to pay maintenance rather than the absent and absenting parent who has not contributed. Fourth, the relationship between the CSA and the Courts may not have been adequately thought through and there has already been judicial criticism of the stance taken by the CSA which has prompted parents to try and revoke court orders. The formula assessment has caused considerable concern amongst practising lawyers for the effect it may have on divorce settlements, not only those which exist but those to come. The clean break solution is not safe from a child support assessment. Fifth, by not taking into account the reality of many absent parents' actual commitments where many form a new relationship and accept responsibility for new families the battle lines are being drawn between the needs of the first and second families.

What is the solution? Recognising the anger the assessments are causing the ITS President has said that an appeal will be heard on any grounds rather than the limited grounds allowed by the Act. 33 As a palliative for absent parents this is an understandable commitment

31

32 33

This is the theme running throughout the Social Security Committee report, supra n 4. The Independent on Sunday, 7.11.93, "No one listened over child support". Judge Thorpe is quoted in The Times, 21.10.93, "Clearly there are signs that people are unhappy. From what 1 read, I don't think they will be prepared to accept the size of the order. Although people are supposed to show that the assessment officer made a mistake of fact, acted in ignorance or got the law wrong, if people indicate dissatisfaction and say they can't manage or meet the payments, then their appeals will be allowed to run." 36,000 appeals each year are being planned for.


but will offer little more in many cases than a forum in which to voice complaint. Changes to the formula to take account of the reality of an absent parent 's new commitments have been recommended. This would be a sensible short-term measure and take some of the heat out of the current debate but is it acceptable in the long term? The Government has spoken of a new realism but how will this be achieved? Amending the formula now may restore the old reality which was at the heart of the Government 's proposals to change because inevitably like cases will he treated differently as absent parents' circumstances differ.

It is interesting to speculate what the response to the Act would have been if the CSA had concentrated its energies on those parents with care on benefit who refused to co-operate in pursuing the absent father and suffered reduced benefit deductions. By taking on a vocal and articulate group of absent fathers the CSA has brought the Act into the public eye at a very early stage and it is hard now to see how the Act in its present form does fit in to the overall reform of family justice in England and Wales. If a Government wants to change reality overnight there are, it would seem, no easy answers as to the best method of doing so and the ghost of the poll tax is still there as a re- minder of what happened last time.

Stephen Jones"

* Stephen Jones, S e n i o r Lecturer, Liverpool John Mores University.

Documents

The Child Support Act 1991