In the UK, child benefit is paid to one parent only. In situations where the parents are separated, it would be reasonable for the parties to agree that the parent with whom the child resides is to receive the child benefit. In any event, unless an application is made for child benefit, the parent who received the child benefit before the separation will continue to receive the payments. In most circumstances, this will be the mother.
If both parents have equal responsibility for the care of the children, in that the children spend half of their time with their mother and half of their time with their father, it would be hoped that the parties would reach agreement on the issue of who should be receive the child benefit. Indeed, given the sums involved it may not appear to be a matter which is worthy of argument especially if the divorce is one which is considered to be high net worth.
There may, however, be a pitfall in regarding the issue of receipt of child benefit as a trivial one. The Child Support Act 1991 defines the "person with care" as the person with whom the child has his home and who usually provides day to day care for the child. Despite the fact that some parents share the care of their children equally, the Child Support Agency ("the CSA") still defines one parent as the "parent with care" and the other as the "non-resident parent."
There are currently no proposals to amend these provisions by the Child Maintenance and Other Payments Act 2008 ("2008 Act"). The current rules state that, where there is equal care, the parent with care is the parent who is in receipt of child benefit. As a result, the parent receiving child benefit can apply to the CSA (whose functions are to be transferred to the Child Maintenance and Enforcement Commission by the 2008 Act) for a maintenance assessment and an order will be made against the non-resident parent. This remains the case even when the non-resident parent is earning substantially less than the parent with care. In situations where parents equally share the care of their children, the assessed amount of maintenance is divided by two and is reduced by a further £7 per child.
This stringent provision does not promote relations between separated parents and as a result does nothing to promote the welfare of the child. Parents often engage in dispute over receipt of child benefit and even care arrangements, rather than co-operating to ensure that care arrangements are working well and are in the child's best interests.
Surrendering the right to receive child benefit should be considered carefully, given the consequences which can arise in respect of child maintenance. Although it is difficult to envisage how agreement could be reached when there is only one child, it is easier to do so where there are more children. For example, separating parents could agree that where there are two children, the mother shall receive the child benefit for the first child and the father shall receive the child benefit for the second child. This would reduce the potential CSA liability as each parent would only be obliged to maintain one of the children through the CSA. It would also be open to each parent to apply to the CSA for a maintenance assessment in respect of the child for whom he or she receives child benefit.
Perhaps in recognition of the inflexible nature of the rules, the Child Support Agency encourages parents to have come to their own financial agreements where the children spend an equal amount of time with each parent. It is, however, unfortunate that the Government did not seize the opportunity to amend the law in this area within the realm of the 2008 Act. This is surprising given that the new Act encourages voluntary arrangements. Co-operation between parents is encouraged on the one hand, yet there remains this stringent, unfair rule on the other hand. The current provisions may encourage care arrangements to be motivated by financial rather than welfare considerations.
The Government received a petition requesting that child support liability be removed where equal shared care arrangements exist. The Government responded by stating that consideration would be given to those cases and the outcome of the considerations will be set out in regulations expected to be made during the course of this year. It will be interesting to see whether the Government and the new Commission will decide that such cases should be dealt with differently.
