Tax Laws and Child Benefits:
Unequal Treatment is International

July 27, 2002

Two lawsuits against the Secretary of State for Work and Pensions in England are demonstrating that fathers and mothers have unequal legal and political status. Divorced fathers Kevin Barber and Eugen Hockenjos both filed petitions for equal treatment in the distribution of the child benefit.

The "child benefit" is similar in effect in higher income cases to a dependent tax credit and in lower income cases to receiving a higher welfare entitlement based on family size. But in Europe and Canada it takes the form of a weekly cash payment made to heads of households regardless of income. The weekly benefit in England is currently £15.50 for the first child and £10.35 for any other children. (Roughly $24/16 USD.)

Even though the concept of "custody" was eliminated by the 1989 UK Children Act government policy still applies a winner-take-all approach to the distribution of the child benefit.

Kevin Barber challenged the government's refusal to split the child benefit between him and his ex-wife even though they have an equal time shared care arrangement. He claimed unlawful discrimination or breach of his rights under the European Convention on Human Rights. On July 17, the Daily Mail reported that a lower court rejected his claim for equal treatment. Mr. Barber accused the Government of "unfairness" in response.

Richard Drabble QC appearing for Mr Barber, described the government's approach as 'all or nothing.' One partner receives child benefit - which is a 'gateway' to many extra benefits, such as income support, family credit and housing benefit - while the other receives nothing. It is usually the mother who is regarded as the 'parent with care' and the knock-on effect is that she receives all the benefits.

Mr Barber's solicitor Conrad Haley, of the human rights pressure group Public Law Project, said: "The judgment was disappointing as the judge failed to grapple with some of the issues which were raised, but these things can be difficult at this level." He said, "It might be that the Court of Appeal will take a different view."

Eugen Hockenjos filed a related claim in 1997, based on a 1978 Trans-European Council Directive "on the progressive implementation of the principle of equal treatment for men and women in matters of social security." Mr. Hockenjos was unemployed and had shared custody. Even though his court order stated that he would care for his children, his application to be paid an additional unemployment benefit for support of his children was rejected.

The problems fathers encounter with the child benefit is reflected in the problems fathers in the United States encounter with tax benefits. In the past, the person whose income provided support was entitled to tax benefits. As part of the wave of federal domestic relations reforms, tax law was changed in 1983 making tax benefits one of the many winnings related to custody.

Unequal tax treatment was cited in a Georgia decision this year in which a superior court declared their guidelines unconstitutional.

The Guidelines do not take into account the large tax-related child cost offsets the custodial parent receives. Custodial parents typically receive $200 to $350 per month in extra after-tax income just for having custody. These child-related tax benefits are head of household status, child exemptions, child tax credits, child care credits, and earned income credits. Both parents have an equal duty of support for the costs attributable to the children. Both parents are equally entitled to the cost offsets attributable to the same children but in proportion to their obligation. Not sharing the child-related tax benefits violates equal protection. Not sharing the tax benefits with both parents is an extraordinary benefit for the custodial parent and an extraordinary burden for the non-custodial parent.

In his decision, Judge C. Dane Perkins noted that in a study conducted in 14 South Georgia counties between 1995 and 1997, it was found that 82.2% of contested custody cases resulted in custody being awarded to the mother and that guideline support had an impermissibly discriminatory affect upon men based upon their gender.

An appeal is expected to be heard by the Georgia Supreme Court later this year.

Copyright © 2002 Roger F. Gay