Arch Dis Child: first published as 10.1136/adc.63.5.471 on 1 May 1988. Downloaded from

Archives of Disease in Childhood, 1988, 63, 471-472

The future of child benefits in the United Kingdom

The implementation of the 1986 Social Security Act primarily at those not in full time employment, was in April 1988 marked an important milestone in the replaced by a combination of income support and development of financial support for children. interest free loans (payable under the new social Confronted by a substantial body of evidence which fund) which take the place of the cash grants (single showed that poverty is most extreme among families payments) that used to be available to meet excep- with children,' 2 the government has chosen to shift tional needs. Family income supplement-for the balance of support away from pensioners, single working families-was replaced by family credit people, and higher income families towards families while housing benefit, available to all low income with children on very low incomes. In the context of householders regardless of employment status, was social security spending as a whole, the size of the restructured but retains the same name. transfer which has been achieved is miniscule. Reflecting the aim of simplification and the desire Nevertheless, the move was a bold one in political to enhance work incentives, all three schemes share terms as pensioners have long been regarded as one a related means test. A family is entitled to income of the natural constituencies of the Tory party, while support (and housing benefit) if their income is less the history of child benefit is littered with political than their requirements. Requirements are calcu- casualties.3 lated as the sum of a personal allowance for the claimant (and his or her partner), an age related allowance for each child and a fixed family premium. The aims of reform The maximum family credit is payable to working

families with net incomes at or below the personal copyright. The 1986 Act followed a series of ministerial allowance for a couple on income support and is reviews, a green and a white paper. The govern- on higher incomes. ment's intention in reviewing social security pro- progressively reduced for families visions was to arrive at a system that was: (a) capable of meeting genuine need; (b) consistent Impact of the reforms with its economic objectives; and (c) simpler to understand and easier to administer.4 No new Family credit is more generous than family income http://adc.bmj.com/ money was to be made available. supplement used to be and the government expects The government, in its green paper,5 articulated twice as many families (400 000 in total) to be 'two clear and distinct aims in helping families with eligible.6 At face value children also gain under the the cost of bringing up children': (1) 'to provide help new income support and housing benefit schemes, for families generally'; and (2) 'to provide extra help although entitlement to housing benefit stops at for low-income families.' much lower income levels than before. Official figures indicate that 71% of two parent families A new benefit structure entitled to means tested benefits are made better off on September 25, 2021 by guest. Protected as a result of the structural reforms, a fifth of them Child benefit, payable for all children under 16, has by over £5 per week, and only 23% most of them been the principal mechanism for providing general- working families facing cuts in their housing benefit ised financial assistance to families since its intro- -lose out.7 The picture is very different for other duction in 1977. Although the government con- types of claimant. Fifty per cent of young single sidered both means testing or taxing child benefit claimants, 59% of pensioner couples, and 82% of and 'fine tuning' it on particular types of family, all other childless couples stand to lose benefit, although these strategies were rejected on practical grounds some current claimants are covered by special rather than for reasons of principle.5 While child transitional protection. benefit came out of the reviews unscathed (though Lone parents fared less well than other families, see below), maternity grant has been made means although there is no evidence that their needs are tested and maternity allowance made taxable. any less, indeed quite the contrary.8 Only 50% of The most radical changes affected means tested lone parents claiming benefit gained from the benefits which are designed to provide extra help for reform while 39%, few of whom had their benefit low income families. Supplementary benefit, aimed protected, lost an average of £2 90 per week. 471 Arch Dis Child: first published as 10.1136/adc.63.5.471 on 1 May 1988. Downloaded from

472 Walker Forebodings away from other claimants. Additional moves in this direction, which seem likely to involve further On paper, the reforms mean that in a full year reductions in the value of child benefit, will mean £191 million of means tested benefit will be redirected that the needs of the most deprived will be paid for to families with children and, notably, to traditionally by families who are themselves at the most financially two parent units. The official figures, however, vulnerable stage of the life cycle.'4 ignore the abolition of single payments, one off lump sum payments made to supplementary benefit All the official statistics quoted in this annotation are for Great claimants in order to meet exceptional needs, and Britain. their replacement by loans under the social fund. For most families on income support the loss of single payments will be more than the increase in References 1( weekly benefit.9 Reformn of social security. Volutne 3. Backgroun1d papers. Also, while the structure of child benefit remained London: HMSO, 1985. (Cmnid 9519.) intact the government chose not to increase the rate 2 Bcrthoud R. The reformn of supplemeneitaryv betiefit. London: of benefit in line with inflation. This resulted in an Policy Studics Institutc 1984. McCarthy M. Camtnpaignin1g for the poor. London: Croom Helm, annual saving of £120 million. Child benefit (£7.25 1986. per week) now equates with less than half the Reform of social security. Volumne 1. London: HMSO, 1985. allowance payable for a 10 year old on income (Cmnd 9517.) support (including the family premium) and repre- 5 Reformn of soc-ial security. Volumne 2. Progrtatnme for chlanige. London: HMSO, 1985:47. (Cmnd 9518.) sents less than a third of the direct costs attributable Timmins N. Low-pay workers to reccivc more help. Time to a child of that age." However, the government Inidependenit 1987. 28 Oct, 329:6. gives greater priority to reducing the risk of poverty 7 Dcpartmcnt of Hcalth and Social Sccurity. Imnpac t oJ the among families than to making a general refortned structure of imic-omne-related benefits. London: DHISS, contribu- 1987. tion to the costs of bringing up children. The Millar J, Bradshaw J. The living standairds of lonc-paircnt deindexing of child benefit had no effect on families familics. Quarterly Jourtial of Social Affairs 1987:3.4. copyright. in receipt of means tested benefits although it Berthoud R. (Quoted in Timmins N.) Biggest loscrs will hc reduced the real incomes of seven million other worst off. 7he Indepenidenit 1987. 28 Oct, 329:6. Bcrthoud R. Selected social security. London: Policy Studics families with children. Institutc, 1986. The social security green paper defended child Mitchell D, Cookc K. The costs of childrcaring. In: Wailkcr R, benefit, which it described as 'simple, straight- Pairker G, cds. Montey matters. London: Saigc. 1988:27-45. forward well understood.'5 But, current 12 Timmins N. Child bencfit to hc frozcn in widc-ranging rcforms. [and] The Independent 1987. 28 Oct, 329:6. ministers believe that it is 'ill-targeted' and that it is 13 Child Povcrty Action Group. Child bentefit unider thtreat. http://adc.bmj.com/ consequently not meeting genuine need.'2 If child London: Child Povcrty Action Group, 1985. benefit is phased out, or in other ways reduced in 4 O'Higgins M, Bradshaw J, Walker R. Incomc distrihution ovcr value, it will erode still further society's contribution the life cyclc. In: Wailkcr R, Parkcr G, cds. MotneY natters. to meeting the very real costs of children, a London: Saigc, 1988:227-54. contribution which in the 1950s was higher than it is ROBERT WAILKER today. 13 Institute for Research in the Social Sciences In sum, the government has funded improved and the Social Policy Research Unit, benefits for the poorest children by taking benefit University of York YOJ 5DD on September 25, 2021 by guest. Protected