Should the PWC's circumstances be taken into account? - DEBATE
John Ward
generated the odd flame!) but I lost track of whether there was a consensus on
the topic "Should the PWC's circumstances be taken into account?" (I don't
think there was). It may be the single most contentious issue.
The formula looks at the NRP's income, not the PWC's. This has advantages and
disadvantages all round.
Below I talk about the pros & cons for the parents. I assume that a child
"inherits" the pros & cons of the parent looking after him/her at any time, so
I am not neglecting children.
ADVANTAGES:
For the NRP: simplicity & predictability. Know your net income (eg. from your
tax return) and you know your liability (from leaflets you can pick up
anywhere). Whatever happens to the PWC, you don't get derailed. The PWC may
plunge from being the MD of a major company to being on Income Support, and it
won't make any difference (to you).
For the PWC: low administration cost. No need to supply any details to the CSA.
A financial advantage from allowing the NRP to care for the child for part of
each week.
DISADVANTAGES:
For the NRP: you won't get a reduction even if the PWC is the MD of a major
company.
It won't cater properly for shared care: even caring 3 nights per week leaves
the NRP significantly down compared with a PWC on 4 nights per week. (In other
words, there is a step at 182/183 - the Mike, or Michele, Farr effect).
For the PWC: no ability to predict and plan on the basis of a certain amount of
maintenance, because it is totally out of the control and knowledge of the PWC.
Views?
John Ward
Mike Farr
John Ward wrote in message <01bdb290$3ac27860$e12b...@iclweb.com>...
snip
>For the NRP: you won't get a reduction even if the PWC is the MD of a major
>company.
>It won't cater properly for shared care: even caring 3 nights per week
leaves
>the NRP significantly down compared with a PWC on 4 nights per week. (In
other
>words, there is a step at 182/183 - the Mike, or Michele, Farr effect).
Mike actually, just Michele when trying to point out Joy Hilbert's totally
biassed attitude toward blokes.
snip
>John Ward
>
Pat Winstanley
<john...@iclweb.com> writes
>The posts since the green paper was released have discussed various issues (and
>generated the odd flame!) but I lost track of whether there was a consensus on
>the topic "Should the PWC's circumstances be taken into account?" (I don't
>think there was). It may be the single most contentious issue.
>
>The formula looks at the NRP's income, not the PWC's. This has advantages and
>disadvantages all round.
>
>Below I talk about the pros & cons for the parents. I assume that a child
>"inherits" the pros & cons of the parent looking after him/her at any time, so
>I am not neglecting children.
Let's assume both parents set aside the same proportion of their net
income for the child (whether forced to or not):
Parents A B total needs A p/l B p/l child p/l
net pay 200 200
1 child contr 30 30 60 60 - - -
net pay 500 200
1 child contr 75 30 105 60 (45) 45 -
net pay 100 100
1 child contr 5 5 10 60 25 25 (50)
net pay 100 200
1 child contr 5 30 35 60 25 - (25)
(note that A and B above may be PWC *or* NRP and still give valid
figures)
Where does the money come from to make up the shortfalls of the PWC or
NRP?
Where does the money get spent when the PWC or NRP is in a gain
situation?
The child's basic needs don't change whether or not it's mother and/or
father are earning or how much money they happen to have spare at the
time!
I have ignored the impact of shared parenting time for the moment as the
GP suggests that the amount passed from the NRP to the PWC for the child
should be reduced by one seventh of the amount that would be due if
there were no overnights for each night the child spends with the NRP...
and I hope this will not be rigidly interpreted as "nights" as opposed
to time when the parent who happens to have care at the time is
providing the everyday living expenses at least. Similarly I hope
account will be taken of the situations where the NRP has the child only
in everyday situations at, say, weekends, and those expenses paid direct
don't contribute towards annual fees for the child or periodic fees like
childcare during the working week. This is something the parents really
have to sort out between themselves and present as a united statement to
be used as modification as it could in the raw benefit either parent
equally unduly.
--
Pat Winstanley
Pat Winstanley
>the NRP significantly down compared with a PWC on 4 nights per week. (In other
>words, there is a step at 182/183 - the Mike, or Michele, Farr effect).
How?
The GP proposal is that the NRP's passed contribution will be reduced by
one seventh for each night the child (on average) spends with them (and
presumably the financial contribution not passed spent directly on the
child instead). So simultaneously the PWC's need to spend on that child
is reduced by the amount not being passed to them. Sounds fairly
reasonable to me as long as period costs rather than just food for the
day/night are taken into account, and as long as days are counted even
when there isn't an overnight... for instance my ex tended to have the
kids saturday morning through to Sunday teatime, so only one night but
two days of paying for (most) meals for them per week. It cost him
nothing for them to sleep there, but it did cost him for the food to
feed them during their waking hours (one breakfast, two lunches, one
supper, one/two tea each), plus toiletries, fares etc during their
waking hours.
Would be much easier to ignore nights and just go on proportion of
waking hours children spend with the NRP when nobody else is providing
their everyday needs (food/heat/light/fares/childcare) for that time.
--
Pat Winstanley
John Ward
<pKJk+WAX...@pierless.demon.co.uk>...
> In article <01bdb290$3ac27860$e12b...@iclweb.com>, John Ward
> <john...@iclweb.com> writes
> >It won't cater properly for shared care: even caring 3 nights per week
leaves
> >the NRP significantly down compared with a PWC on 4 nights per week. (In
other
> >words, there is a step at 182/183 - the Mike, or Michele, Farr effect).
>
> How?
>
> The GP proposal is that the NRP's passed contribution will be reduced by
> one seventh for each night the child (on average) spends with them (and
> presumably the financial contribution not passed spent directly on the
> child instead). So simultaneously the PWC's need to spend on that child
> is reduced by the amount not being passed to them. Sounds fairly
> reasonable to me
Rather late, I've spotted the flaw in the green paper formula. I should have
done this on logical grounds rather than after wading through lots of data
showing strange results.
Suppose the formula were symmetrical, at least for shared care. Then for each
night PWC cared, NRP pays a 7th (based on NRP income), and for each night NRP
cared, PWC pays a 7th (based on PWC income). If the PWC and NRP have
approximately the same income, at the 3 / 4 night stage, NRP would pay (net)
for 1 night not 4. This avoids the anomaly.
Example: both parents earn £465 net income, and have 1 child, with no other
children to complicate this example.
Look at the different amounts (rounded) as Parent P cares for 0, 1 ... 7
nights. A positive amount means that Parent P pays (net), a negative amount
means that Parent P receives (net). The 1st amount on each line uses the green
paper formula, the 2nd amount uses this revised formula:
0: £70 £70
1: £60 £50
2: £50 £30
3: £40 £10
4: -£40 -£10
5: -£50 -£30
6: -£60 -£50
7: -£70 -£70
The green paper formula has a net switch of £80 per week for Parent P at the
switch from 3 to 4 nights. The revised formula avoids this polarisation. The
green paper difference in this example between Parent P being PWC or NRP is
about £4000 per year for nearly equal amounts of caring.
The simplest revision to the green paper formula would be to reduce the
maintenance liability by 2 7ths for each night of care by the NRP rather than 1
7th. Unfortunately, this is less satisfactory where the incomes differ
significantly - it tends to favour the better-off parent compared with true
symmetry. (If NRP is better off, the liability falls more rapidly with sharing,
while if PWC is better off PWC makes inadequate contribution for NRP's caring).
John Ward
John Ward
[snip]
> The child's basic needs don't change whether or not it's mother and/or
> father are earning or how much money they happen to have spare at the
> time!
True, but the green paper doesn't pretend that it is purely concerned with
basic needs. It points out "spending on children increases with their parents'
income". Other similar schemes in the world make the same observation.
When I do sums based on a basic fixed cost of a child, the green paper formula
goes out of bounds (eg. liability outstrips the cost of the child) fairly
quickly. But if the "target spend on a child" (whatever that means) contains an
element of parents' income (ŁA + B * income), the formula stays in bounds
longer.
There are at least 2 separate questions here:
1: What IS a typical pattern of spending on children, taking into account
parents' income and other key factors?
(We could fling formulae around for ever without achieving consensus).
2: To what extent SHOULD the formula for separated parents attempt to take "1"
into account?
(The green paper uses a slick sentence: "Parents may divorce each other, but
they should never divorce their children". Whatever the parents' views, the
children may like as much continuity of finances - and other things of course -
when the parents separate as possible).
John Ward
Norman Bush
john...@iclweb.com (John Ward) wrote:
-----snip-----
> For the PWC: low administration cost. No need to
supply any details to the CSA.
> *A financial advantage from allowing the NRP to care
for the child for part of each week.*
-----snip-----
I do not understand how the PWC will benefit from
allowing the NRP to care for the child for part of each
week.
My ex has completely obstructed contact with my kids.
Will this mean that she will be better off if she allows
some contact?
Norman
Pat Winstanley
<john...@iclweb.com> writes
>> In article <01bdb290$3ac27860$e12b...@iclweb.com>, John Ward
>> <john...@iclweb.com> writes
>> >It won't cater properly for shared care: even caring 3 nights per week
>leaves
>> >the NRP significantly down compared with a PWC on 4 nights per week. (In
>other
>> >words, there is a step at 182/183 - the Mike, or Michele, Farr effect).
>>
>> How?
>>
>> The GP proposal is that the NRP's passed contribution will be reduced by
>> one seventh for each night the child (on average) spends with them (and
>> presumably the financial contribution not passed spent directly on the
>> child instead). So simultaneously the PWC's need to spend on that child
>> is reduced by the amount not being passed to them. Sounds fairly
>> reasonable to me
>[snip]
>
>Rather late, I've spotted the flaw in the green paper formula. I should have
>done this on logical grounds rather than after wading through lots of data
>showing strange results.
>
more than half the time then they become the PWC and hence they begin to
recieve from the now ex PWC to add to what they are spending directly on
the child... ;-))
Something to be made clear in the contributions of opinions.
However it is already clear that the PWC is *also* contributing from
their income in addition to the amount passed across by the NRP, since
the average sort of amounts shown for the NRP to pay work out to about
half the £60 the GP suggests as a fair total maintenance figure for the
child.
--
Pat Winstanley
Pat Winstanley
<sh...@cix.co.uk> writes
No. Because under the proposals you will be directly spending part of
what would have been passed over for her to spend if you didn't have the
kids with you. But at the same time while you have the kids she doesn't
need to spend that part (she now doesn't have from you) on them as you
are spending it directly rather than indirectly via her.
The kids need cash spending on them whichever parent they happen to be
with.
--
Pat Winstanley
John Ward
<memo.19980719...@peaton.cix.co.uk>...[snip]
> > *A financial advantage from allowing the NRP to care
> for the child for part of each week.*
> I do not understand how the PWC will benefit from
> allowing the NRP to care for the child for part of each
> week.
> My ex has completely obstructed contact with my kids.
> Will this mean that she will be better off if she allows
> some contact?
Remember that this is the new formula, which may get implemented about 2001.
Yes, if they implement the current green paper proposal, the PWC tends to be
better off if the NRP shares care. (And the NRP tends to be worse off). But
whether you could ever convince the PWC of this is another matter - this may be
too subtle for rational thought.
The reason is that there is a peculiarity in the proposal. The maintenance
liability reduces at the rate of 1 7th for each night per week shared. But the
advantage to the PWC increases faster than this - it is closer to 2 7ths per
night of care. (I've posted an explanation of this).
John Ward
Pat Winstanley
>maintenance liability by 2 7ths for each night of care by the NRP rather than 1
>7th.
On second thoughts... I see what you mean! ;-))
One seventh of the total spend on the child onj the child for a day,
rather than just of the NRP's contribution share that would otherwise be
passed over to the PWC and added to their pool for direct spend on the
child. If x is deemed to be spent on the child per day, amde up of a
from Dad and b from Mum then if Mum normally has the kids and receives a
from Dad to add to her b for that day then if Dad has the child that day
not only should Dad retain his a for that day in order to spend it
directly, he should also receive the b from Mum to spend on the child.
Because Mum doesn't need to spend either a or b while child is with Dad.
(Assumes day to day expenses that do vary depending upon where the child
is. Some things like annual subscriptions, childcare retainers, clothing
bought periodically, school fees and trips and uniform, perhaps cost of
an extra bedroom for the child etc will not change depending upon the
temporrary location of the child and would need to be allowed for).
The GP mentions that it would be difficult to assess the difference
between daytime contact and daytime care... I agree. Any suggestions as
to how a simple system based on nights *or* days could be introduced?
But you will still get a big jump if one or the other parent earns a
good deal more than the other if a switch is made from 3 days to 4 days
care. For instance if Dad is on low earnings and Mum earning two or
three times as much then if custody effectively swaps from Mum to Dad on
the 3/4 night threshold dad will receive a good deal more for the
child's needs after the switch than he was providing before the switch.
And vice versa.
Anyone considered what will happen regarding the cost of weektime
childcare to allow both parents to earn? This can be a substantial
expense for pre-school children, and pretty high even for older ones
when you take school holidays into account. Let's face it - the cost of
childcare alone for a seven year old can come easily to more than the CS
suggested for a typical wage earner... childminders costing about £2-5
per child per hour and an ordinary full-time job probably requiring
about 20 - 25 hrs per week on average across the year for a single
school aged child.
--
Pat Winstanley
Machman
<pee...@NOSPAMpierless.demon.co.uk> wrote:
>In article <memo.19980719...@peaton.cix.co.uk>, Norman Bush
><sh...@cix.co.uk> writes
>>In article <01bdb290$3ac27860$e12b...@iclweb.com>,
>>john...@iclweb.com (John Ward) wrote:
>>
>> -----snip-----
>>> For the PWC: low administration cost. No need to
>>supply any details to the CSA.
>>> *A financial advantage from allowing the NRP to care
>>for the child for part of each week.*
>> -----snip-----
>>
>> I do not understand how the PWC will benefit from
>>allowing the NRP to care for the child for part of each
>>week.
>>My ex has completely obstructed contact with my kids.
>>Will this mean that she will be better off if she allows
>>some contact?
>
>No. Because under the proposals you will be directly spending part of
>what would have been passed over for her to spend if you didn't have the
>kids with you. But at the same time while you have the kids she doesn't
>need to spend that part (she now doesn't have from you) on them as you
>are spending it directly rather than indirectly via her.
>
>The kids need cash spending on them whichever parent they happen to be
>with.
>
Hmmm...interesting line of reasoning from you Pat, considering a
previous posting of yours in reply to 'H' which I re-quote thus:
>
>You *have* to pay for clothes, swimming, toys, cinema and funpark? Why
>do you *have* to do that? Why do they need those things?
>
>Can't you think of anything to do with your child(ren) that DOESN'T cost
>money? Or costs no more than a bus fare to the nearest public park or
>nature reserve? Or sitting together and reading stories to each other?
>Or wandering rounf ther shopping centre window-shopping and discussing
>what the kids would like if they could afford it, or spending time with
>your neighbors and friends with the child(ren)?
>
>Yes, you need the money to buy food for while they are with you, but
>what else do you NEED to spend?
Inconsistencies abound in your responses methinks. One the one hand
you suggest that NRPs have no need to spend money on their kids when
they are with them and here you suggest they do.
If, as you suggest, "kids need cash spending on them", what expenses
other than food had you in mind?
Please clarify.
Yours, Robert Nye.
--------------------------------------------
Life....don't talk to me about life.
--------------------------------------------
Norman Bush
> I do not understand how the PWC will benefit from
>allowing the NRP to care for the child for part of each week.
>My ex has completely obstructed contact with my kids.
> Will this mean that she will be better off if she allows some contact?
In article <rkuEFnAK...@pierless.demon.co.uk>,
pee...@NOSPAMpierless.demon.co.uk (Pat Winstanley) wrote:
>No. Because under the proposals you will be directly spending part of
>what would have been passed over for her to spend if you didn't have the
>kids with you. But at the same time while you have the kids she doesn't
>need to spend that part (she now doesn't have from you) on them as you
>are spending it directly rather than indirectly via her.
>The kids need cash spending on them whichever parent they happen to be
>with.
>
In article <01bdb34e$9d2f84c0$e12b...@iclweb.com>, john...@iclweb.com
(John Ward) wrote:
> Remember that this is the new formula, which may get implemented about
> 2001.
>
> Yes, if they implement the current green paper proposal, the PWC tends
> to be
> better off if the NRP shares care. (And the NRP tends to be worse off).
> But
> whether you could ever convince the PWC of this is another matter -
> this may be
> too subtle for rational thought.
>
> The reason is that there is a peculiarity in the proposal. The
> maintenance
> liability reduces at the rate of 1 7th for each night per week shared.
> But the
> advantage to the PWC increases faster than this - it is closer to 2
> 7ths per
> night of care. (I've posted an explanation of this).
>
Thank you both for the replies but now I am even more confused. Pat says
no and John says yes.
My ex is on IS and, as I understand it, the PWC will be rewarded at 10
pounds per week for "co-operating" with the CSA. That is fair enough. It
would be nice to see at least some of my money going direct to the
children although under the proposals it will be possible for the PWC to
get the 10 pounds and still not allow contact.
This seems grossly unfair.
The 52 night rule will also provide motive for contact to be obstructed.
It would be nice if there was some incentive (financial or otherwise) to
encourage recalcitrant PWC's to allow contact with the other parent. If
there is some financial advantage to the PWC to increase contact then it
might just tip the balance. Mind you as John says trying to convince the
ex might not be so easy. Time to get the slide rule out I think.
Could you give me a pointer to your article about this please John? Date
or header? I can't seem to find it on my newsreader.
thanks
Norman
John Ward
> I wrote:
> > I do not understand how the PWC will benefit from
> >allowing the NRP to care for the child for part of each week.
> >My ex has completely obstructed contact with my kids.
> > Will this mean that she will be better off if she allows some contact?
> In article <rkuEFnAK...@pierless.demon.co.uk>,
> pee...@NOSPAMpierless.demon.co.uk (Pat Winstanley) wrote:
> >No.
[snip]
> In article <01bdb34e$9d2f84c0$e12b...@iclweb.com>, john...@iclweb.com
> (John Ward) wrote:
[snip]
> > Yes, ...
[snip]
> Thank you both for the replies but now I am even more confused.
[snip]
> Could you give me a pointer to your article about this please John? Date
> or header? I can't seem to find it on my newsreader.
[snip]
(Extract from it at the end of this post).
First, let's demonstrate with an example. Figures chosen for convenience, but
lots of others will also work.
PWC & NRP both have net income of £200. Each spends £10.20 per night on their
child when it is with that parent. PWC gets Child Benefit. No other benefits,
income, children, complications.
If the PWC cares 7 nights and the NRP cares 0 nights, then the spend on the
child is CB 16%, PWC (from income) 42%, NRP (via maintenance) 42%. Completely
balanced.
Each line below shows the effect of caring by the NRP. 1st figure is nights
cared. 2nd figure is NRP's retained income (what is left of income after paying
for the child by maintenance + direct spend). 3rd figure is PWC's retained
income (what is left of income + CB + maintenance after direct spend on the
child).
Nights: NRP: PWC:
0: £170.00 £170.05
1: £163.80 £176.25
2: £158.60 £181.45
3: £152.40 £187.65
Why? Think of it like this.
For the nights when the PWC is caring, the maintenance scheme operates. NRP
transfers money to PWC for those nights (and only those nights).
For the nights when NRP is caring, the PWC is not part of the scheme. S/he
neither pays nor receives. It is as if the NRP is a true lone parent with
no-one to assist.
John Ward
----------
Extract from an explanatory post:
Rather late, I've spotted the flaw in the green paper formula. I should have
done this on logical grounds rather than after wading through lots of data
showing strange results.
Suppose the formula were symmetrical, at least for shared care. Then for each
night PWC cared, NRP pays a 7th (based on NRP income), and for each night NRP
cared, PWC pays a 7th (based on PWC income). If the PWC and NRP have
approximately the same income, at the 3 / 4 night stage, NRP would pay (net)
for 1 night not 4. This avoids the anomaly.
Example: both parents earn £465 net income, and have 1 child, with no other
children to complicate this example.
Look at the different amounts (rounded) as Parent P cares for 0, 1 ... 7
nights. A positive amount means that Parent P pays (net), a negative amount
means that Parent P receives (net). The 1st amount on each line uses the green
paper formula, the 2nd amount uses this revised formula:
0: £70 £70
1: £60 £50
2: £50 £30
3: £40 £10
4: -£40 -£10
5: -£50 -£30
6: -£60 -£50
7: -£70 -£70
The green paper formula has a net switch of £80 per week for Parent P at the
switch from 3 to 4 nights. The revised formula avoids this polarisation. The
green paper difference in this example between Parent P being PWC or NRP is
about £4000 per year for nearly equal amounts of caring.
The simplest revision to the green paper formula would be to reduce the
maintenance liability by 2 7ths for each night of care by the NRP rather than 1
Mike Farr
Pat Winstanley wrote in message ...
>In article <01bdb290$3ac27860$e12b...@iclweb.com>, John Ward
><john...@iclweb.com> writes
>>It won't cater properly for shared care: even caring 3 nights per week
leaves
>>the NRP significantly down compared with a PWC on 4 nights per week. (In
other
>>words, there is a step at 182/183 - the Mike, or Michele, Farr effect).
>
>How?
>
>The GP proposal is that the NRP's passed contribution will be reduced by
>one seventh for each night the child (on average) spends with them (and
>presumably the financial contribution not passed spent directly on the
>child instead). So simultaneously the PWC's need to spend on that child
>is reduced by the amount not being passed to them. Sounds fairly
>reasonable to me
NO!, only by reducing maintenance at a rate of 2/7ths per night, NOT 1/7th
per night will this work, else the 182 / 183 step will always exist - the
money should phase down to zero at the 182.5 night (3.5/7ths point). This
summarises the total misery brought about by the present system - a bloody
fight over the last night!
Mike (not Michele) Farr
snip
>Pat Winstanley
Pat Winstanley
<mike...@btinternet.com> writes
See my follow-up message where I "got the point"!
--
Pat Winstanley
John Ward
unsatisfactory:
1: It has a major step at 3/4 nights, or PWC/NRP status, which will lead to
lots of disputes and injustices.
2: It reduces the maintenance liability too slowly & unfairly for the case
where PWC & NRP have similar incomes.
(I've posted on both of these topics).
NOW I've tried looking at it from the Government's point of view. It is flawed
there too. It makes it too easy for separated parents to "play the system".
Imagine Parent X, on Income Support, who actually cares for the children
most/all of the time. And Parent Y, earning a useful amount, who cares little
or no time. Then under the formula Parent Y pays Parent X 15/20/25% of this
useful amount, which reduces Parent X's Income Support, while leaving Parent X
only £10 better off than basic Income Support levels.
(But the loss to the taxpayer is minimised, so it isn't all wrong!)
Now imagine that they do a deal, in which Parent Y (the original and logical
NRP) becomes the PWC and hence pays nothing, and Parent X becomes the NRP and
pays only £5. Perhaps Parent Y cares for 4 nights, while Parent X cares for 3.
(There is a problem of ensuring that Parent X remains eligible for IS, and
doesn't become an entrant to JSA & New Deal. There may be ways of doing this).
Depending on the detailed rules for who can claim to be looking after children
as far as IS is concerned, etc, much or all of the original maintenance
liability is retained by these people and is now available for the separated
parents to share out between them (eg. as back-handers which would be difficult
to detect as benefit fraud). Even if Parent X (the actual, and original,
most-time carer) claims to look after the children for 3 days, maintenance has
switched off, and Income Support is maximal. Post-separation, they have
maximised, rather than minimised, their increase in means-tested benefits,
contrary to any pro-family principles.
The problem for the Government (and taxpayers) is the step where maintenance
switches off (when an NRP becomes a PWC) - the 3/4 night boundary (perhaps
183/182 in practice).
Quite simply, steps like this are wrong. Why SHOULD maintenance switch off? ANY
step will be an inducement to "play the system" and behave badly.
3: It encourages the separated parents to lie, play the system, and attempt to
reduce the liability and maximise the money obtained from the taxpayer.
The real question is: why should the formula treat the 2 parents differently? I
believe that both parents should be handled symmetrically with the same
formula. I'll post separately about this.
John Ward