From 624b3a433ccaf9aaf7a4083916c24aaaa70ecbd2 Mon Sep 17 00:00:00 2001 From: Vahid Ahmadi Date: Wed, 27 May 2026 11:12:45 +0200 Subject: [PATCH] Add child maintenance planning docs page (#669) #669 is filed as a planning issue. Persist the scope in-repo as a "planned: not yet modelled" docs page mirroring the BiK / firm-VAT pattern. The page covers: - the current state: maintenance_income / maintenance_expenses exist as generic inputs deducted from market_income, but do not distinguish child maintenance from spousal and do not encode the UC asymmetry, - the CSJ-identified Universal Credit asymmetry (recipient: full disregard; payer: no deduction) and why that produces a poverty trap for paying parents on UC, - Phase 1: disambiguate inputs into child_maintenance_received and child_maintenance_paid (plus the FRS routing needed in policyengine-uk-data), - Phase 2: fix the UC asymmetry in uc_applicable_income, - Phase 3 (optional): derive the CMS formula itself for reform analysis, with the gross-income-band rate table from SI 2012/2677, - data needs (FRS for inputs, CMS statistics for calibration) and primary references (Child Support Act 1991, the CMS Maintenance Calculation Regulations 2012, the gov.uk how-we-work-out PDF, and the CSJ paper). --- changelog.d/669.md | 1 + .../programs/gov/cms/child-maintenance.md | 133 ++++++++++++++++++ 2 files changed, 134 insertions(+) create mode 100644 changelog.d/669.md create mode 100644 docs/book/programs/gov/cms/child-maintenance.md diff --git a/changelog.d/669.md b/changelog.d/669.md new file mode 100644 index 000000000..b03f6c47d --- /dev/null +++ b/changelog.d/669.md @@ -0,0 +1 @@ +- Add a planning docs page for child maintenance modelling under `docs/book/programs/gov/cms/child-maintenance.md`, flagging that the current generic `maintenance_income`/`maintenance_expenses` inputs miss the Universal Credit asymmetry highlighted by the CSJ "Hidden Parent Poverty Trap" paper, and outlining a three-phase implementation route (disambiguate inputs, fix the UC asymmetry, model the CMS formula). diff --git a/docs/book/programs/gov/cms/child-maintenance.md b/docs/book/programs/gov/cms/child-maintenance.md new file mode 100644 index 000000000..200015781 --- /dev/null +++ b/docs/book/programs/gov/cms/child-maintenance.md @@ -0,0 +1,133 @@ +# Child maintenance (planned) + +```{warning} +**Not yet modelled in detail.** PolicyEngine UK currently has two generic +input variables — `maintenance_income` and `maintenance_expenses` — that +flow through HBAI but do **not** distinguish child maintenance from +other maintenance and do **not** apply the Universal Credit asymmetry +described below. This page captures the agreed scope for adding a +properly-modelled Child Maintenance Service (CMS) calculation, tracked +under [#669](https://github.com/PolicyEngine/policyengine-uk/issues/669). +``` + +## Why model child maintenance separately + +The Centre for Social Justice paper [*The Hidden Parent Poverty Trap: +Child Maintenance and Universal Credit*][csj] shows that the +**asymmetric** UC treatment of child maintenance produces a meaningful +work-incentive cliff for paying parents: + +- **Receiving parent**: child maintenance income is **fully disregarded** + in the UC means test. That's good for the receiving household and + matches the policy intent of CMS. +- **Paying parent**: child maintenance paid out is **not** deducted from + earnings in the UC means test. The paying parent is means-tested on + gross earnings as if the maintenance had never left their pocket. + +The current PolicyEngine treatment uses a single `market_income` +deduction `income - maintenance_expenses` (`variables/household/income/ +market_income.py`). That is fine for HBAI net income but is **too +generous** to the paying parent in UC — they would currently see +maintenance reduce their UC-applicable income too, producing higher UC +than they actually get. + +## Scope + +### Phase 1 — disambiguate the inputs + +- New input variable `child_maintenance_received` (Person, GBP, annual) + — the amount of CMS / private child maintenance the person receives. +- New input variable `child_maintenance_paid` (Person, GBP, annual) — + the amount the person pays out. +- Keep `maintenance_income` / `maintenance_expenses` for spousal and + other maintenance flows; document the distinction explicitly. +- In `policyengine-uk-data`, route the FRS child-maintenance items into + the new variables and the FRS spousal-maintenance items into the + existing ones. + +### Phase 2 — fix the UC asymmetry + +- New variable `uc_applicable_child_maintenance` (BenUnit) that returns + **`child_maintenance_received` only**, with `child_maintenance_paid` + set to **zero** — i.e. the UC-side asymmetry. +- Subtract `uc_applicable_child_maintenance` from + `uc_applicable_income` so it's fully disregarded for the receiver. +- Crucially **do not** subtract `child_maintenance_paid` from + `uc_applicable_income`; this reproduces the CSJ-identified poverty + trap. + +### Phase 3 — model the CMS formula itself + +Currently both `maintenance_income` and the proposed `child_maintenance_*` +variables are pure inputs. Phase 3 would derive the CMS award when the +required inputs are present, using the gross-income basis the CMS +applies: + +| Paying-parent gross weekly income | Rule | +|------------------------------------|------| +| Less than £7 | No payment ("nil rate") | +| £7 – £100 | Flat-rate £7 | +| £100 – £200 | Reduced rate (formula-based) | +| £200 – £3,000 | Basic rate: 12% / 16% / 19% of gross income for 1 / 2 / 3+ children, with a tapered top slice between £800 and £3,000 | +| Over £3,000 | Capped at the £3,000 figure (statutory upper limit) | + +Plus the **shared-care reduction** (one-seventh per night of shared +care up to 174 nights/year) and the **other-children adjustment** for +non-qualifying children living with the paying parent. + +Phase 3 is optional for headline UC analysis (where the asymmetry in +Phase 2 is what matters) but unlocks reform scenarios that change the +CMS rate or threshold. + +## Implementation outline + +### New parameters under `gov/cms/` + +- `gross_income_band/{lower,upper}_threshold.yaml` (£7 and £3,000 weekly + in 2025 terms) +- `rate/basic/{1,2,3_or_more}_child.yaml` (12 / 16 / 19%) +- `rate/reduced/{base,marginal}.yaml` +- `shared_care/reduction_per_night.yaml` +- `take_up/cms_collect_share.yaml` (HMRC published share of CMS-vs- + family-arrangement maintenance) + +### New variables under `variables/gov/cms/` + +- `child_maintenance_gross_weekly_income` (Person) +- `child_maintenance_obligation_pre_shared_care` (Person) +- `child_maintenance_shared_care_reduction` (Person) +- `child_maintenance_paid_cms_basis` (Person, derived award) + +### UC integration + +- `variables/gov/dwp/universal_credit/uc_applicable_income.py` adds + `child_maintenance_received` as a deduction (full disregard) and + **does not** deduct `child_maintenance_paid` — matching the policy. +- HBAI keeps the current symmetric treatment; the CSJ asymmetry is a + UC-side specific. + +## Data needs + +- **FRS** records both receipt and payment of maintenance and identifies + the recipient/payer at person level. Phase 1 imputation routes FRS + child-maintenance items into the new variables. +- **CMS / Child Maintenance Statistics** ([gov.uk/government/collections/ + child-maintenance-service-statistics][cms-stats]) give published + CMS-arrangement caseload and total maintenance flowing through the + statutory scheme; useful for calibrating the new variables against + the share of maintenance that goes through CMS vs. private + ("family-based") arrangements. + +## References + +- Centre for Social Justice, [The Hidden Parent Poverty Trap: Child + Maintenance and Universal Credit][csj]. +- DWP, [How we work out child maintenance][how-we-work-out] — official + user-facing CMS methodology guide. +- [Child Support Act 1991](https://www.legislation.gov.uk/ukpga/1991/48/contents) — primary statute. +- [The Child Support Maintenance Calculation Regulations 2012 (SI 2012/2677)](https://www.legislation.gov.uk/uksi/2012/2677/contents) — the operational regulations. +- HMRC/DWP, [Child Maintenance Service statistics][cms-stats] — caseload and expenditure outturns. + +[csj]: https://www.centreforsocialjustice.org.uk/library/the-hidden-parent-poverty-trap-child-maintenance-and-universal-credit +[how-we-work-out]: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/672432/how-we-work-out-child-maintenance.pdf +[cms-stats]: https://www.gov.uk/government/collections/child-maintenance-service-statistics