I think the system on CSA needs changing - they take the disability element of TC's into account too - so if you have a disabled child, and you get with someone who has a previous child - they can take money paid for YOUR disabled child, and pay it to an able-bodied child - which just makes absolutely NO sense.
But then, how does it work if the NRP decides to become a SAHD, for example - and thus has no income to pay maintenance to the RP? Then it becomes a deprivation of income variation, and that's where it becomes more of a 'grey' area, because it may suit the NRP's new family for him to be a SAHD, but it leaves the children from his first relationship with less money.
NONE of the systems work properly, I agree, but if the money isn't there to pay for the new computer systems that would be needed to take EVERY situation into account - then what can, in all honesty, be done? It would cost MILLIONS to design these programs.
And yes, for TC's - BOTH household's income would need to be taken into account - so you could get a situation where :
RP - works, for min wage, is entitled to FULL WTC and CTC, plus the childcare element.
NRP - remarried, both him and partner work, not entitled to WTC or CTC, but only just scraping by with their wages, need 'their' share of TC's to cope with costs of access.
What happens then? Does the RP lose some of her TC's even though the NRP's family wouldn't be eligible - anyone earning over £17K PA gets NO WTC any more - my Ex-p was earning £16.8K pa before we split up, and we got £4.28 a week WTC. And after that level, even CTC drops sharply, so if the NRP's household income (because TC's are based on HOUSEHOLD income - which would mean the NRP's partner's income too) was over about £24K pa - they wouldn't GET any CTC either.
Which is where the complexities are preventing the Government from rectifying this problem - it's impossible to 'penalise' the RP's household income on the basis of the NRP's household income.
But surely, in the case you mention, the loss of the TC's from dc that may not even be the NRP's, is offset by the maintenance paid by THOSE dc's father? That was the idea behind that - to get ALL NRP's paying. Not that that works, for a minute...says the person who had to wait 13 years for maintenance from one NRP...