Select Committee on Social Security Report


Memorandum submitted by One Parent Families Scotland (CB 7)

1. Taxation of Child Benefit

  OPFS disagrees in principle with the taxation of Child Benefit. It should be an acknowledgement of state responsibility to support all parents.

2. Higher rates for children under five or tiered rates at all levels?

  Lone parents with children under 5 will incur higher childcare costs if they are working and not all families will be eligible for help under the Working Families Tax Credit. If they are not working they are likely to be dependent on Income Support. Evidence from "Small Fortunes, Spending on children, childhood poverty and parental sacrifice" (Middleton, Ashworth & Braithwaite, Joseph Rowntree Foundation 1997) shows that parents with children under five spend 43 per cent more on them than is covered by Income Support rates. To alleviate childhood poverty, parents of children under five need higher Child Benefit which is disregarded for Income Support.

3. Higher payments for the first child?

  We support the principle of higher payment for the first child. This is particularly beneficial for lone parent families, fifty per cent of which have only one child.

4. Relationship between CB and IS allowances?

  Evidence from Canada suggests that an integrated child benefit system with much higher levels of child benefit which is withdrawn gradually as income rises would be more effective in promoting social inclusion, alleviating poverty and reducing barriers to work. (Joseph Rowntree Foundation Research Findings. Why special tax credits for low income families are being abandoned in Canada, January 1998).

  In considering any changes, the need for a simpler and better integrated welfare benefits system should be paramount.

5. Role in support for 16-19-year-olds?

  Any move to remove CB from this age group should take into account the possible reduction in the amount of support that lone parents would be able to give to children in continuing education if the parent's entitlement to IS/FC is removed.

6. Changing family structures?

  At present the receipt of CB determines eligibility for means tested benefits and child maintenance. Because CB cannot be split between two parents, there is no mechanism for taking shared care situations into account (in which the non-residential parent undertakes up to half the care of the child). Although splitting of CB in proportion to the amount of caring time might be administratively difficult, it could act as encouragement for more fathers to take a significant role after separation.

7. Higher rates of CB?

  Lone parents face significantly higher costs than two-parent families, because of childcare costs, the need for similar sized accommodation and because of costs relating to one parent trying to cover the work of two. We would therefore support higher rates of CB for one-parent families, with a disregard on Income Support and also increased CB rates for lone parents in further/higher education, who are often not eligible for IS.

8. International comparisons?

  No comment.

10 September 1998

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