Creditable proposals

Neil
Bateman explains a range of changes to children’s benefits the government is
likely to make.

The
government is serious about its pledge to end child poverty, whatever the
policy contradictions that undermine it – such as social fund loans – and this
pledge is driving social policy generally, not just social security policy.

Dealing
with the cycle of low pay, low skills and insecure work that leads to frequent
spells of unemployment is key to tackling child poverty. In addition, absolute
levels of benefits for children have to be increased further.

The
latest ideas on addressing child poverty are in a consultation paper on new tax
credits. Interestingly, this has been published by the Inland Revenue, showing
not only the direct influence of chancellor Gordon Brown on the poverty agenda
but the growing role of the Inland Revenue as an agent of social change. There
was also the recently announced transfer of the child benefit centre from the
Department for Work and Pensions to the Inland Revenue.

The
proposals on tax credits mean that from 2003 the current system of benefits for
children will be swept away and replaced by a unified system of children’s tax
credits, paid on an annual assessment of income, stripping down the multitudinous
ways of getting money to children (though child benefit is to remain as now).
There will be no work-related rules for payment (meaning, for example, students
with children will gain) and different amounts payable depending on family size
and child disability. It is also proposed to lengthen the time that children
can be absent from home before the tax credit is affected – a huge
simplification in bureaucracy and if applied to looked-after children, a real
help to child care practitioners and parents alike – although the consultation
paper does not specifically address this issue. There also appears to be no
move on the possibility of splitting benefits for children when couples have
shared care as payment would go to the "main carer". The inability to
split benefits does not fit with the Children Act 1989 and is a common cause of
friction between separated parents.

Critical
success factors will include the actual amount payable, the effect of drawing
more people into means testing and the undermining effect of the housing
benefit taper.

For
those in poorly paid work, a new scheme of employment tax credits is proposed,
also paid on a more stable basis by annual assessment and paid via the employer
as now. The most interesting element of these proposals is that they should
extend to single people without children and combine the existing working
families and disabled persons tax credits. For those with child care costs, a
new child care tax credit would be payable on pretty much the same grounds as
now but with greater flexibility around changes in child care costs. The
problem caused by Ofsted’s interpretation of child care by relatives (Welfare
Rights, 9 August) is not addressed so the consultation paper gives an
opportunity to raise this point formally.

Overall,
the new tax credits could be yet another improvement in the lives of people on
low incomes. You can get the consultation paper at www.inlandrevenue.gov.uk/consult_new   The deadline for responses is 12 October so
make sure the needs of social work consumers are made known.

Neil
Bateman manages Suffolk Council and Suffolk Health Authority’s welfare rights
service. If you have a question to be answered in Welfare Rights please write
to him c/o Community Care.