Oz and the art of maintenance: Britain's Child Support Agency is one year old. Patricia Hewitt looks at lessons it ignored

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The Independent Online
FURIOUS fathers, disillusioned mothers, staff under threat: the first anniversary of the Child Support Agency is unlikely to produce many celebrations. But there is one birthday present the agency's sponsoring minister, Peter Lilley, should give to its embattled chief executive, Ros Hepplewhite: a return ticket to Australia to visit her antipodean counterpart.

Before Australia established its new child support system, only three in 10 lone parents were receiving maintenance - the same proportion as in the United Kingdom. When the courts did award maintenance, the amounts were just as inadequate and just as unlikely to be paid. There, as here, the combination of unreliable maintenance and a rapid growth in the numbers of lone parents was placing a growing strain on the social security budget. In 1988 Australia's new Child Support Agency started work. In 1992, the independent advisory group which has monitored the legislation from the outset (a novelty that the British government would do well to emulate), concluded that Australia was well ahead of most other countries in its child support provision.

The Australian legislation merited a mere four paragraphs in the White Paper that preceded the UK's 1991 Child Support Act and the creation of the agency. Yet if the Government had been more willing to learn from its former colony, some disasters of the past 12 months would have been avoided.

Unlike the British, the Australian government decided not to make its new system retrospective. The agency was given responsibility for collecting maintenance under earlier court settlements ('Stage One' cases). But the new and more generous maintenance formula only applied to parents separating after October 1989 or children born after that date ('Stage Two').

Australia's conservative opposition did try, but without success, to extend the formula to all lone parents receiving social security benefit. And there is concern about the unfairness to Stage One children who receive less money than those dealt with under the new formula. The advisory group has now proposed that Stage One lone parents should be able to opt into the scheme, with a right of appeal for the absent parent. But the Australians succeeded in avoiding the predictable outcry which the British scheme has produced from fathers who thought they had made one-off property settlements and then found themselves hit with a further demand from the agency.

It is not, however, too late to learn from the second crucial difference between the Australian scheme and our own: the treatment of lone mothers on benefit. Disgruntled fathers complain, with justice, that the British scheme is a Treasury and not a child support scheme. Maintenance paid by the father comes straight off the mother's income support. Unless maintenance enables the lone mother to take a job herself, his sacrifice leaves his children no better off. Indeed, it may actually leave them worse off: a lone parent family floated off income support by maintenance will also lose 'passported' benefits, such as free school meals, while the father paying maintenance may no longer be able to afford new shoes, clothes, trips or other 'extras'.

The pressure group One Parent Families recently called for a small maintenance disregard, to give lone parents an incentive to co-operate with the agency. Australia's custodial parents not only receive a full disregard on the first Ausdollars 16 for the first child's maintenance, but lose only 50 cents in benefit for every additional Ausdollars 1 of maintenance. There are similar arrangements for subsequent children. As a result, of the Ausdollars 450m ( pounds 221.5m) child support maintenance received by social security recipients in 1992-93, about three-quarters was kept by custodial parents. The remaining Ausdollars 108m went back to the Treasury in savings.

The third difference between the two schemes concerns the maintenance formula itself. Both countries allow the absent parent a 'self support' element, equivalent to income support. After that, comparison becomes complicated, as Australia bases the maintenance calculation on gross income, Britain on net income after deducting tax, national insurance and half of pension contributions. But there is an important difference of principle. In Britain, the amount of maintenance to be paid per child is a flat rate based on income support. British fathers pay a hefty 50p in the pound on the balance of their earnings until they have met the total.

In Australia, there is no predetermined formula, and therefore no limit on the amount payable per child. Absent parents pay 18 per cent of their income (after deducting self support elements) for one child, 27 per cent for two, and so on up to 36 per cent for five or more children - proportions based on careful analysis of the relative costs of small and large families. The formula also contains eight variations to cover different circumstances such as high cost of access and shared custody where the children spend a large part of their time with the paying parent. Moreover, the formula can be set aside if both parents agree on an alternative arrangement, and there is also a right of appeal to an independent review office.

Because the Child Support Agency is based in the Australian tax office, maintenance can easily be deducted from absent parents' pay cheques, with arrears offset against tax rebates, helping to push up the collection rate to more than 70 per cent.

The Australian agency is still the subject of attack. It is even investing heavily in counselling and training for its staff, who find themselves acting as lightning conductors for the stress and trauma experienced by warring couples. As one client told the agency's market researchers: 'I always used to fight with my ex-husband over child maintenance. Now it's much better, we get on really well and both shout at the Child Support Agency instead.'

The agency is also clear about its mission to explain. A colour photo- magazine, national telephone hotline and stories on popular radio shows all help to spread the message that there is never a clean break from children.

But perhaps the most important lesson Ros Hepplewhite could bring back from Canberra is that the child support law is only part of a strategy to improve the incomes and life chances of lone parents and their children. Alongside the agency is the Jobs, Education, Training programme, which helps parents back into the labour market and which has been so successful that it has passed its two-year target for placing people in work ahead of schedule.

Last week, Alistair Burt, Mr Lilley's junior minister, expressed his concern about British mothers' disillusionment with the Child Support Agency, saying 'we want to keep them on our side'. The sooner they buy that ticket to Australia, the better.

The writer is deputy director of the Institute for Public Policy Research.