Catch-up or patch-up?

In mid-January we heard in the press about the report on the Child Support Agency by its new chief executive. At the time of writing the report has not been made public but some of the main proposals for reform are clear. It may be useful to look at the history of the Agency to see how it got into its present mess.

No one would pretend that the system of administering aliment pre-1993 was perfect. The levels of aliment awarded were tiny, and in cases where the pursuer was in receipt of state benefit it was usually not granted at all. Thus the lone parent (usually the mother) received either nothing or very little from the other parent for the maintenance of the child and the taxpayer had to fund this failure through income support. There is no doubt that it was this last point which was the driver for the 1991 Child Support Act – witness the fact that lone parents on income support either had to co-operate with the Agency or risk losing the benefit on which they absolutely depended.

It must have seemed to government in the early 90s that a system of child support, modelled on the Australian CSA was the answer. The Child Support Agency had a bad beginning, partly because of the complexity of the assessment calculations. The average citizen could not be expected to calculate accurately the correct amount of child support maintenance. What was worse was that the Agency itself had great difficulty in carrying out the calculations. More than 50% of its calculations were wrong in some respect and the inefficiency in recovering the assessments pushed the organisation further into public and political contempt.

The reform brought in with the Child Support, Pensions and Social Security Act 2000 was a brave but doomed attempt to address the main problems. The formula was greatly simplified, taking the calculation from Byzantine complexity to brutal simplicity, bypassing fairness on the way. For example the traditional principle that both parents’ resources would be relevant to the amount payable by the non-resident parent was abandoned. The resources of the person with care of the child were to be left out of account, regardless of how much wealthier she may have been than the other parent.

A new IT system costing £456m should have allowed the CSA staff to calculate and enforce child support maintenance much more quickly and accurately. It should also have eased the difficult communications between the Agency and the public (and their long-suffering advisers). Significantly it should have provided government with accurate data on the performance of the agency itself and given guidance on the steps which the Agency should take to improve that performance. The computer system has been an abysmal failure on each of these counts.

Even now, three years after the new IT system went live, the CSA is unable to give statistics on the non-resident parents for whom it has no address. It provides government with only a fraction of the information provided by the old system, which was so poor that it had to be replaced. The current backlog of uncollected maintenance tops £3bn and is increasing at the rate of £30m per month. In mid-January there were 334,000 applications from lone parents awaiting any sort of assessment. During the previous year the average clearance rate was only 3,000 per month and that leaves out of account the assessed cases in which there was no enforcement. Add to that the large number of cases in which the Agency’s calculation was simply wrong because of a misreading of evidence or a misunderstanding of the law and the scale of the problem becomes clear.

The first headline feature of the new proposals is that much of the calculation of child support maintenance will be carried out not by the CSA but by a section of the Inland Revenue. This has the attraction of bringing the functions of investigation and calculation under the same roof. The Inland Revenue will already hold a great deal of information on non-resident parents and will have the ability to check that information against evidence. The second main feature of the proposed regime is that the huge debt representing arrears of child support maintenance will be sold to firms of debt collectors who then will have a commercial imperative to recover the sums due and may adopt a more commercial attitude towards enforcement.

The manner and results of the new enforcement and the quality of the new calculations will be the test of the proposals. If they can bring the interests of the children concerned to the forefront of child support then we will welcome them. If they represent yet another patch-up job then the calls for the abolition of the Agency will become irresistible.

John Fotheringham is a partner in Ross & Connel, Dunfermline and an accredited family law specialist