UK Child Support in Trouble
No doubt many net users will be aware that the UK CSA was in real trouble in 2003/04. Their failing computer system took the brunt of the blame.
However, there is another very significant reason for their lack of success in collecting child support, which was revealed by Sir Archy Kirkwood, Chair of the UK Works and Pensions Committeeduring during a meeting on 16 September 2004 with Sue Price, a director of Men’s Rights Agency. The UK Works and Pensions Committee visited Australia to investigate the success of the Australian Child Support system.
After hearing an explanation from Sue Price about the operation and difficulties with the Australian child support scheme, Sir Archy expressed his amazement that CSA could garnishee monies directly from a person’s account or pay packet.
In the UK this approach would not at the time have been possibile. without a court order. Hence their collection competency is far less than in Australia, but it begs the question: How can the Australian CSA garnishee without a court order?
The UK CSA is now not nearly as onerous as the Australian version. The previously complicated formula for working out maintenance was replaced in 2001 by a simple percentage of income – 15 per cent of net pay for one child, 20 per cent for two children, or 25 per cent for three or more children. Notice the calculations are made on NET income not GROSS and they are considerably lower percentages than those used in Australia.
WORK & PENSIONS COMMITTEE PRESS RELEASE
‘Select Committee to inquire into the performance of the Child Support Agency’
The House of Commons Work and Pensions Committee today announced an inquiry “to examine the performance of the Child Support Agency (CSA), with particular reference to the Agency’s compliance and enforcement regime.”
After an 11 month delay, on 3 rd March 2003, the Agency began accepting new maintenance claims under the new child support scheme. In the first year of delivery 321,522 new applications for child support were received; 91,429 received maintenance calculations and 31,115 first payments were made through the Agency. In addition, there are currently 829,400 ‘old’ cases (those taken before 3 March 2003) that are still calculated under the old scheme. The Department has said that no cases would be moved over to the new scheme until they are satisfied that the new arrangements are working well for new cases. It is still not clear when this might be.
Under the old scheme, compliance and enforcement have long been problematic for the CSA. Current figures show that 54% of cases are fully compliant, 25% are non-compliant and a further 21% are partially compliant. At previous evidence sessions with the Agency and the Department, the Committee has expressed strong concern about the enforcement regime, drawing particular attention to the Agency’s reluctance to use enforcement powers, including the threat to withdraw driving licences from non-compliant parents.
The CSAs business plan for 2004-05 identifies several priorities for the year including: ensuring that the new arrangements work well; being in a position to migrate and convert existing cases to the new arrangements; improving enforcement; and supporting staff.
Other areas of research include:
– disability/rehabilitation as a possible follow-up to the Committee’s Employment for All and for HSE inquiries, focussing on the issue with regard to the Australian Jobcentre Plus equivalent
– the treatment of people from ethnic minority backgrounds by the Australian Social security systeM.
The visiting Committee members were as follows:
Name Party Constituency
Sir Archy Kirkwood (Chair) Liberal/Democrat Roxburgh and Berwickshire
Miss Anne Begg Labour Aberdeen South
Ms Karen Buck Labour Regent’s Park and Kensington North
Mr Andrew Dismore Labour Hendon
Mr Paul Goodman Conservative Wycombe
Mr David Hamilton Labour Midlothian
Mrs loan Humble Labour Blackpool North and Fleetwood
Rob Marris Labour Wolverhampton South West
Andrew Selous Conservative South West Bedfordshire
Sue Price said, “There was a clear divide between the Committee members – those who were not in the least intersted in the problems caused by the Australian scheme and focused just on the penalty aspect for those who might not be paying their child support and those on the liberal/conservative side who were amazed that CSA could garnish without a court order and the evidence of higher than normal death rates among child support payers”
The British report of the visit reads as follows:
Work and Pensions Committee visit to Australia – 13-17 September 2004
NOTES OF THE VISIT
TUESDAY, 14 SEPTEMBER 2004
Meeting with Elizabeth Wing, ManagerEnquiries and Conciliation at the New South Wales Anti-Discrimination Board
The Board had been established in 1977, was independent, but funded by the State. There was no link with Centrelink. Religious discrimination was not dealt with separately but was included within the Race category.
Private clubs were not included because of religious sensitivities. 60% of cases resulted in conciliation. Tribunals made administrative decisions and do not award costs. Disability discrimination legislation would be in place by about 2014. Age discrimination would also be covered in the future.
Meeting with Sue Price from Men’s Rights Agency
The Men’s Rights Agency (MRA) claims that 6.1% of the CSA client bases dies earlier than the general population. This may be due to stress-related illnesses or suicide. The UK CSA is easier on the wallet than the Australian system, plus Australians are taxed at a higher rate. The MRA argue that the average Australian wage is around $39,000 per annum which would result in child support payments of $7,000. They do not agree with the principle that children should be entitled to have the same standard of life post-parental separation. They do not oppose the principle of child support but they do propose that child support should be based upon the costs of raising a child rather than upon the NRPs income. The MRA also assert that high taxes combined with high child support payments results in fathers giving up work and non-compliance of child support. They also claim that the CSA is the most hated government Agency in Australia.
The MRA report that the CSA has a problem of accountability. The CSA are very poor at answering the customer phonelines and that there are problems with the IT. Australian politicians claim that 30% of their constituency business is child support related. The MRA claim that CSA staff are paid performance bonuses on the amount of child support collected. The CSA used to be part of the Australian Tax Office and the MRA claim that this led to data protection issues as data was illegally shared between government Agencies.
The MRA argue that both parents are important in a child’s life and that fathers are frequently refused contact with their children. The court process is designed to resolve contact issues before they reach the courts.
5% of contact cases are dealt with in the courts. A three tier structure was introduced for breach of contact orders: parenting classes; fines; and jail. The jailing of fathers for non-payment of child support is no longer done. Mothers can be jailed for denying contact, although the courts rarely enforce this.
The MRA claim that the official working papers agreeing the child support formulas have been “lost”. Irwin Garfinkle, from Wisconsin USA, designed the Australian system. He based it upon the Wisconsin system which was designed for those earning less than $20,000 per annum, whereas in Australia the system goes much higher up the income scale. The MRA allege that 2% of the child support formula is meant to be for the mother, although the CSA will not admit this.
Parents opt for private collect as they do not want the Agency to interfere with their arrangement. The MRA believe that contact is important in terms of securing compliance with child support and that they need to be linked together. It is important that compliance is achieved voluntarily.
Lunch and round table discussion with Dr Paul Henman in the Speaker’s Dining Room at Parliament House, Macquarie Street, Sydney and at Sydney Airport
Dr Henman has conducted research into the costs of contact between NRPs and children and to what extent the CSA formula meets the costs of children. This has been published in the UK’s Journal of Social Policy.
Using budget standards methodology to estimate the costs for NRPs exercising regular contact with their children, Dr Henman found that the costs for contact for 20% of the year are 40% of the costs of the child if it was in an intact family. The research suggests that there may be problems with the assumption that the costs of contact are a time-based pro-rata proportion of the costs of raising children full-time.
The recent House of Representatives inquiry (from which the child support taskforce emerged) did look at the costs of children, but did not take into account the government’s contribution in the form of benefits and tax credits. Family benefits start to taper off at an income level of $30,000, in spite of the fact that the average income in Australia is $39,000.
Dr Henman’s research also indicates that the pre-separation living standards of all family members cannot be maintained after separation without either an increase in the government assistance or an increase in the parents’ earnings. Consequently, if child support policy attempts to maintain the pre-separation living standards of children then there is a danger that the level of child support liability may be at the expense of the ability to afford contact or of compliance with child support liabilities.