Showing posts with label finance. Show all posts
Showing posts with label finance. Show all posts

09 November 2012

Child support

Our future as a nation depends on the well-being of our children. They will be the leaders, politicians and educators of the next generation. Where children are not getting the support they need it's essential that the government steps in to help.

Roman sculpture of children playingChildren are precious. They are, in a very real sense, our future. How the next generation is supported, educated and encouraged will have more effect on the future of a nation than almost anything else.

Today's children are tomorrow's policy makers, employers and employees, teachers, police etc. They will shape the societies of the next generation.

To a considerable degree, therefore, the future also depends on today's parents and educators. But underlying all of this is the means by which our children's practical needs are met. In an ideal world this would be through the love and care of two parents in a stable and safe home environment with an adequate income. But we don't live in an ideal world.

What happens when marriages break down or a child is born to a single mother? Single fathers are less common, but death of a Mum or marriage breakdown can lead to situations where single dads face the same issues as single mums. One of these issues, perhaps the simplest to fix, is adequate income. It's usually difficult for a single parent to sustain full-time work. When children are small it may be all but impossible, when they are older the situation may ease to merely very difficult.

In this post we're going to focus on the role of the Child Support Agency (CSA) in securing an income where a marriage has failed. Earlier today my wife and I were chatting with a friend who is a single Mum. It turns out that this month there is a difficulty, the father's bank account has failed to fund the monthly payment to the CSA and they, in turn, are unable to pay our friend until the problem is resolved. Meanwhile there are bills to pay, not least for food. (Of course we and/or other friends will help out, but that is not the point.)

This is a very common situation. Sometimes the days turn into weeks and the weeks into months and  the children suffer. It's not the CSA's fault as far as I can see. They are following the rules and guidelines under which they were formed by the British government in 1993.

The way it works is that the CSA acts as a clearing-house or go-between for funds. The CSA will typically rule on the level of monthly funding that is appropriate. They can either take the money direct from a salaried income and pay it to the partner caring for the child, or they can agree to take a monthly payment from a bank account and pay that to the caring partner.

So far, so good. However, when the payment to the CSA fails for any reason, no payment is made to the caring partner and the children suffer.

It seems to me that the rules of operation need to be changed. The CSA should have a legal obligation to provide the agreed level of support to the caring partner (technically, the person/parent with care) and would become responsible for collecting funding from the funding partner (technically, the non-resident parent). In this case the children would be properly supported whether or not the funding partner paid up. In cases of non-payment it would be up to the CSA to pursue recompense, if necessary through the courts.

This would improve security for caring partners and children and make it far harder for individuals to avoid their obligations.

I urge the British government to examine the issue and modify the legislation if necessary. As a nation we cannot afford for any of our children to suffer like this during their formative years. The future of the country will one day be in their hands.

Legislation is no replacement for love and provision by willing parents living in harmony. But where this fails the children deserve much better from us.

Questions:

  • Are you a single parent? If so, do you feel the CSA is doing a good job?
  • If you could change one thing about the CSA, what would it be?
  • If you're a single parent, how important is the support you get from friends and family?
  • Do you know any single parents? What informal opportunities have you found to support them?

See also:

06 August 2011

SOCIETY: Between a rock and a hard place

The USA's credit rating has dropped from AAA to AA+ and people are upset. Like most economies, our friends in the USA are between a rock and a hard place. Most nations have over-borrowed, financing current expenditure by selling government bonds and securities.

Euro notes and coinsThe only ways out are to cut spending or increase taxation (or some combination of the two). Neither is palatable.

So what will happen next? Nobody knows! The BBC's Mark Mardell writes on the political aspects and Robert Peston covers the financial situation.

Here are some extracts that strike me as particularly interesting.

From Mark Mardell
  • The decision by Standard & Poor's ... puts the USA below the UK, Germany, France, Singapore, Finland and 14 other countries.
  • All America has been saying: Washington doesn't work.
  • America's debt will continue to balloon and [S&P] have little hope of the politicians fixing it.
  • They single out Republicans for ruling out tax rises.
  • Americans are likely to bemoan the failure of politicians to bridge an apparently unbridgeable gap between two different world views. They may put their faith in Washington politicians, in an outburst of patriotism and goodwill, stumbling on a synthesis that suits all sides. But I wonder whether any of them will muse that the system itself may not be fit for purpose.
From Robert Peston
  • Almost everything in the world - loans, goods, services - is priced in or priced off the dollar ... the dollar has a status in the financial system once occupied by gold.
  • Whenever investors believe that the world is becoming a riskier place, their instinct is to buy US Treasury Bonds, to lend to the US government.
  • When the price of US government debt rises and the yield on that debt falls, that typically means investors believe prospects for the global economy have deteriorated.
  • Last week ... global share prices fell on the back of concerns that the eurozone isn't gripping the problem of investors declining confidence in the ability of Spain and Italy to repay their debts.
  • The US losing its AAA rating ... is a very loud statement that there has been an appreciable increase in the risk ... that the US might one day struggle to pay back all it owes.
  • The fiscal and economic challenges are conspicuous: a substantial and intractable gap between public spending and tax revenues in the US at a time of anaemic economic growth.
  • Chinese news agency Xinhua said: "China, the largest creditor of the world's sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China's dollar assets."
  • Probably the only thing to be said with any confidence is that the downgrade could hardly have come at a worse time, in that conditions in global markets are febrile.
In other words the world is at an economic crossroads and we have no idea where we will find ourselves in the future - but none of the options look very promising.

Meanwhile Europe and the USA are both struggling with debt issues while China, the major creditor, is anxious about losing its savings.

The future doesn't look good, does it. Things could easily get much worse.

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