Select Committee on Social Security Minutes of Evidence

Case Study 4


  Both parents work for at least 30 hours for £100 net income per week. The mother receives Child Benefit.

  They shared care exactly equally, with their daughter spending one week with one parent, one week with the other. During weekdays, whoever has the daughter has to spend £10 per day on childcare.


  The parent who claims Child Benefit ends up with much more money than she earns, because of all the money that the government supports her with—Child Benefit, Working Families Tax Credit, and childcare tax credit.

  The parent who doesn't claim Child Benefit, in spite of earning exactly the same, and caring for their daughter exactly the same, ends up with about half the money he earns.


  Suppose they decide that they need more money to be provided by the government. So they decide that the mother should look after the child full time.


  The mother retains just a little bit (£6.05) less per week as a result of caring for the children full time (while still working and using childcare each working day).

  The father now retains £95 per week. So by giving up care of the children, he has become £43 better off. (He may privately subsidise the mother).

  Taxpayers pay £36.95 per week to enable the father to be £43 better off by never seeing his child. Taxpayers are subsidising him by a large amount to abandon his children, at the expense of the mother.

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Prepared 19 October 1999