Time to Scrap the UK’s Child Benefit Payment

20 Jan

On the 04 October 2010, the BBC reported changes to the UK benefits/ Social Security system regarding payment of Child Benefit. At present, Child Benefit is a universal, weekly payment to all British families with children up to the age of 16. However, as reported by the BBC, Chancellor George Osborne, announced that payment would be axed for all higher rate taxpayers by 2013.

Changes to the payment are expected to save approximately £1bn, and will affect over 1 million families. The cost of implementing and axing payments is not exactly clear, but the actual saving could reasonably be estimated to be equal to half that of the cost of the intended saving, due to the costs of staffing, office, and admin incurred in order to review household incomes in receipt of the payment. We might ask then, is it really worth it? Is a saving, even if half the amount suggested, not a saving?

Another concern is that of the inequality that will arise in the way decisions to axe payment discriminate against certain households. It has been suggested that some households, despite earning less, will be worse off than those earning more. For example, a single parent household earning £44K will lose all Child Benefit payments; but a two-parent household, earning a joint or single income up to £80K, will not lose any of their Benefit.

This will result in a single parent, and his or her child(ren), being worse off by more than £1,000 per year, despite earning almost 50% less than a two-parent household. Yes, in a worsening economic climate, savings do have to be made to the public purse. But should this be at the expense of creating further inequality within society and, at greater hardship to lone parents, when the cost of living continues to go on rising?

Christine Odone in her blog for the Telegraph, suggests David Cameron is a man who believes in marriage. Well, as well as cost-cutting, a real skeptic then, might also consider this an exercise in promoting Christian and Tory family values, damning those who bring up children outside of marriage, or through divorce, to a life of continued, and ever worsening poverty.

Surely a better and fairer system, would be to scrap the universality of Child Benefit altogether, and make it a benefit that parents have to apply for, and is based on a fairer measure of household income, as with the number of children in the household? Why? Because at present, Child Benefit costs the UK taxpayer approximately £12bn a year. If it were means tested, and the system did not discriminate against the earnings of a single parent; in comparison to the earnings of a two-parent household, then critics would have little to criticize other than the cost of administering the changes, which would surely result in greater savings than just half that of the expected £1bn?

In the end, as well as the financial savings we need to make, as a society, it all comes back to what kind of society we wish to live in, and how fair society should aspire to be. Unless equality is integral to all decisions of this kind, then what are we doing, and what can we hope to achieve.

Author: Jason Schumann

Tags: Cultural Analysis, Debating Culture,British Society, Child Benefit, Social Welfare, British families, British Economy, UK Politics, Family Values, Conservative values, Chancellor George Osborne, UK Taxpayer

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