Autume Budget 2024

Opinion: Autumn Budget 2024 – A Mixed Bag for Families and a Setback for Accessible Mediation

The Autumn Budget 2024 rolls out changes impacting families on multiple fronts, but it disappoints in key areas, especially for those needing accessible mediation services. While the budget’s CGT adjustments and NIC increases attempt to streamline revenue, these come with additional strain for both high-net-worth and low-income separating families.

A glaring oversight in this budget is its disregard for the outdated funding model for family mediation. As a service committed to making mediation accessible, we’re under increasing pressure to deliver on a legal aid fee rate that hasn’t seen an increase in over 20 years. While the government calls for efficiency, it’s unrealistic to expect modern mediation to thrive on a framework that values our work at yesterday’s costs. The need for balanced, affordable solutions has never been greater, and the demand for fair pay in mediation is paramount.

Further troubling is the government’s reinforcement of the third-child cap on Universal Credit. This policy penalizes low-income families, already hit by rising living costs, by limiting financial support based on family size. This not only affects day-to-day stability but also the financial landscape of separation cases where child support and family welfare are priorities.

Impacts on High-Income Families and Asset Division

The CGT rate hike for non-residential assets poses unique challenges for high-net-worth families during asset division. Faced with potential tax hits, separating couples might be motivated to negotiate more intensely over high-value assets to minimize tax burdens. This increased pressure may encourage some to retain assets longer, leading to slower settlements or even triggering costly court battles if parties can’t agree on terms. Mediation offers a pathway to navigate these issues calmly, balancing tax and family goals — but only if the service can meet growing demands.

Challenges for Low-Income Families

For low-income families, the budget brings additional strain with rising living costs and restricted welfare support. The freeze on the third-child cap for Universal Credit limits vital income for families already facing economic hardship, intensifying the strain on those with limited financial resources. This policy adds complexity to separation agreements where child support is a key factor, leaving families with fewer resources to secure housing, education, and basic needs post-separation. In many cases, the budget effectively leaves these families with fewer options for accessible mediation services and limited financial flexibility.

The Family Mediation Trust remains committed to helping families navigate these hurdles. However, while we strive to adapt, real accessibility will require serious re-evaluation of support structures and funding. Without this, the family justice landscape risks becoming increasingly inaccessible, leaving vulnerable families with fewer options. The Autumn Budget, while clear in intent, demands a more family-centered approach if it hopes to truly support all.