Thursday, 25 October 2012

Proposed changes to child benefit - a reasonable idea turned nightmarish

Iain Duncan Smith has proposed limiting benefits payable for children in any family to a maximum of two children. If the parent or parents then went on to have more children, they would not receive additional money for the third or higher child.

In some ways, this is quite a reasonable idea. The additional amounts of benefit paid for families with more children can be fairly generous. Each additional child can currently bring in approximately £70pw in tax credits and child benefit. It also entitles the family to rent a larger house and to a higher income disregard in housing and council tax benefit worth about £50pw for each child.

I have thought for some time that some kind of limit to how many children a person can have while claiming benefits, just as someone who wants to claim help for a mortgage cannot usually take out a new mortgage while on benefit.

The extent of additional money for each child has already been somewhat limited by the new, and highly flawed, benefit cap of £500 a week per household. That system will only affect people with 4-6 children, depending on a number of factors such as the amount of rent they pay. If this new change were implemented, then it would make the cap completely obsolete as nobody with under four children would ever be affected by it. But this is where we get into difficulties with what has now been proposed.

The first problem with the new proposal is that Duncan Smith is once again making it into an issue of those in work against those out of work. From his description of things, you would get the impression that 'those with three or more children' and 'those in work' are two separate groups on a Venn diagram that don't overlap. But this is wrong - people in work can obviously have more than two children.

Despite purporting to make this distinction, there is nothing in IDS's announcement that suggests this change will be limited to those out of work. It seems that everyone will be affected. So it's not just something aimed at the unemployed - we need to be clear on that, or a falsehood is spread.

As I said above, I think it would be reasonable to limit people from having more children while on benefits and immediately claiming more money for them. But it would definitely not be fair to say that if a parent with 4 children loses his or her job, then he or she is unable to claim enough money to live on. It's not as though someone who has lost a job can give up children.

And this is the point where fridge horror sets in. Benefits for children include help with higher rent, for the larger family. This proposal means that a parent with 4 children losing his job would almost immediately become both homeless and un-houseable. This completely undermines the idea of safety net. We may see families forced to split up and children being sent to live with other relatives (who will then be able to claim benefits for them - ruining the point of the idea once again.)

This government has no idea what it is doing. It just pushes through seriously flawed ideas without thinking them through, before and again. No-one who looked carefully at the last benefit cap thought it was a good idea, so I am very worried about this new idea.

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