I keep reading articles about how tax credits won’t apply to third or subsequent children born after a particular date (April 2017).
It follows this part of George Osborne’s emergency budget speech.
Families who have a third or subsequent child after April 2017 will not receive additional Tax Credit or UC support for this child.
The idea is that parents should be planning to only have children when they can afford to support them.
What people seem to be missing though, is that this applies to families who already *have* 3 or more children, *if* they are not currently on tax credits and start a new claim after April 2017. It will also apply if you are on tax credits now, but come off for 6 months. So if you get a better job, then lose it, or if your self employment income fluctuates above the cut off point for a year, you’re going to be caught by this too.
Support provided to families who make a new claim to Universal Credit after this date will also be limited to two children.
And we will make similar changes in Housing Benefit too.
Now, I understand this idea of changing people’s behaviour in terms of family planning. (I’m not saying that I agree or disagree, but I see how the principle is supposed to work.) What I don’t understand is what people who suddenly start needing help – redundancy? death of a spouse? sickness? – are supposed to do with their existing children? Anyone?
I’ve also read articles saying this acts as a disincentive for existing large families to get off tax credits in the first place. Which sounds like a backwards policy. And it appears the official opposition is completely on board with it all. (Harriet Harman quoted in the Mirror.)
Now, Child Tax Credits is the element of the Tax credit system that can be paid to someone outside work. It’s also paid to those in low paid work – and how come all the ire is directed at those in receipt of wage top ups, and not the employers paying the low wages in the first place? We’ve had these top ups to family income under a variety of names since they were first introduced by Ted Heath in 1971. That’s over 40 years of supplements for something that was intended to be a temporary measure. Not looking terribly temporary is it?
I’m not offering any alternative solutions here. Regular readers will know that I’m a proponent of basic income as an alternative to mini tweaks to welfare reform, but really what I think is important right now is that people look at the facts instead of the hype. And the fact behind these headlines is that this is going to affect families who already have 3 or more children. What do people expect them to do?