Child benefits are not simply philanthropic; they should motivate the parenthood society needs, notably a healthy birthrate for a population aging fast and parents bringing up contributors to society. Currently 7.9M households receive child benefits, and there are, or were at the last count, 13.7M children qualifying. That’s about £12.6bn child benefits in total in total, disregarding those earning over £50, 000 who no longer qualify but still have to fill in all the HMRC forms just the same. Of course, you can also get up to £122.50 p.w. for one child, or £210 p.w. for more, to cover some child care costs for the better off. So you get £1,066 for being a parent at home looking after the kid but six times as much if you go out and abandon it. Not much of an incentive for the kind of parenting the country needs.
And if you are really bad parents, which probably also means parents in poverty, the State takes the children away. “Looked after children” is the new term. The numbers of children looked after is about 92,000 in England and growing, probably because of the squeeze, since 2008, on low income households. The cost per looked after child is about £50,000 p.a. It would be cheaper to send them to Eton – about £30,000 p.a. The cost of looked after children does not include their disproportionate poor performance in school, absenteeism, low incomes as adults and likelihood of occupying our criminal justice system.
Most people recognise that this is a vicious circle but not only has no government addressed the problem but it seems to be deteriorating. The system rewards people for poor parenting. In theory, when a child is taken into care, the parents should inform HMRC that, after eight weeks, child benefit should cease. There is no requirement of the care worker or the court making the order to do so. In all the emotion of a child being removed, would you tell HMRC to stop paying you?
On the same basis, child benefits should be withdrawn for parts of the school year for children at boarding school but maybe the fine print covers that.
Child tax credits are a devious means of raising the tax take, from higher earnings, and the government claiming higher employment. At £20 per week for the first child, parenting is a financial drain. Neither financial inducement is incentivising parents in poverty to perform better. Well-off parents do not need them.
Child benefits should be quadrupled, but only be given for the first two children and to parents earning less that £50,000 p.a. The responsible official, court or care worker, should advise HMRC about children taken into care. And child care tax credits should be abolished.