Child benefit

Child benefit (children's allowance) is a social security payment which is distributed to the parents or guardians of children, teenagers and in some cases, young adults.

Conditions for payment

In the majority of countries child benefit is means-tested and the amount of child benefit paid is usually dependent on the number of children you have.

A number of conditional cash transfer programs in Latin America and Africa link payment to the receivers' actions, such as enrolling children into schools, and health check-ups and vaccinations.^[1] In the UK, in 2011 CentreForum proposed an additional child benefit dependent on parenting activities.^[2]

Australia

In Australia, Child benefit payments are currently called Family Tax Benefit. Family Tax Benefit is income tested and is linked to the Australian Income tax system. It can be claimed as fortnightly payments or as an annual lump sum. It may be payable for dependant children from birth up to the age of 24. Children 16 years or older may alternatively be eligible for Youth Allowance. Parents of dependant children under the age of 16 may also be eligible for Income Support Payments including Parenting Payment and Newstart Allowance for Primary Carers of Children.

On 1 July 2000 the Australian government introduced major changes to the tax system including the introduction of a broad-based Goods and Service Tax (a VAT), substantial income tax cuts, as well as major changes to assistance for families.

These changes to family assistance simplified payments, by amalgamating a number of different forms of assistance, and also provided higher levels of assistance, with reductions in income test withdrawal rates. The new structure combined twelve of the pre-existing types of assistance into three new programs of assistance. The two most important of these are Family Tax Benefit Part A, which assists with the general costs of raising children, and Family Tax Benefit Part B, which is directed to single income and sole parent families. The third programme is Child Care Benefit.

The Family Tax Benefit Part A is paid for dependent children up to 20 years of age, and for dependent full-time students up to the age of 24 (who are not getting Youth Allowance or similar payments such as ABSTUDY and Veterans' Children Education Supplement). It is essentially a two-tier but integrated payment directed to most families with children, with a higher rate for lower income families, including both those in work and receiving income support.

The maximum rate is paid up to a family income of $28,200, and is then reduced by 30 cents for every extra dollar of income, until the minimum rate is reached. Part-payment at the minimum rate is available up to a family income of $73,000 (plus an additional $3,000 for each dependent child after the first). Payments are then reduced by 30 cents in every dollar over that amount until the payment reaches nil.

To receive some Family Tax Benefit Part A, the maximum income levels are $76,256 a year for a family with one dependent child under 18 and $77,355 a year for a family with one dependent 18- to 24-year-old. These thresholds are lifted by $6,257 for each additional dependent child under 18 and $7,356 for each additional dependent 18- to 24-year-old.

Families receiving Family Tax Benefit Part A may also be eligible for extra payments, such as Rent Assistance if renting privately, the Large Family Supplement for four or more children, and Multiple Birth Allowance for three or more children born during the same birth.

Family Tax Benefit Part B provides extra assistance to single income families including sole parents - particularly families with children under 5 years of age. In a couple, if the secondary earner's income is above $1,616 a year, payments are reduced by 30 cents for every extra dollar of income. Parents receive therefore some Family Tax Benefit Part B if the secondary earner's income is below $10,416 a year if the youngest child is under 5 years of age, or $7,786 a year if the youngest child is between 5 and 18 years of age. There is no income test on the primary earner's income, so in the case of sole parents the payment is universal.

The previous entry referred to Youth allowance and Parenting Payment. These are income support payments for young people and for parents who are not employed and looking after children respectively.^[3]

Ireland

Child Benefit (Sochar Leanaí) is payable to parents of children under 16 years of age, or under 18 years of age if they are in full-time education, Youthreach training or has a disability. The payment is paid by the Department of Social Protection. The monthly payments are as follows:^[4]http://www.welfare.ie/en/Pages/273_Child-Benefit.aspx

Multiple births are a special case. In the event of twins, 150% of the monthly payment is paid for each child. Triplets, or more, are paid the double (200%) rate each; provided that all of them remain qualified (i.e. stay in further education until 19). In addition, a special 'once-off' grant of €635 is paid on all multiple births. Further 'once-off' grants of €635 are paid when the children are 4 and 12 years old respectively.^[4]

Fraudulent claims of Child Benefit are treated very seriously, and can result in large fines or prison for up to 3 years. ^[5]

Japan

See Kodomo Teate law

Sweden

After World War I, many countries were left with dwindling populations. In an attempt to solve this problem, Sweden began a program called "family allowance". These were government funds given to families with children to encourage them to bear more children and increase the birthrate.

Today, the guardians of all children aged 16 or younger, are awarded child benefits of 1050 Swedish kronor per month.^[6]

The couple Alva and Gunnar Myrdal have played a very influential role in the Swedish society. Alva received the Nobel Peace Prize in 1982 and Gunnar received the Nobel Prize in Economics in 1974.^[7] Their book "Kris i befolkningsfrågan" (Crisis in the Population Development") was published in 1934. It painted a very dark picture of Sweden. The growth of the population would turn negative and Sweden be filled with mostly elderly people. This book had an important influence and in 1937 child allowance was introduced for poor mothers.

In 1948 child allowance was extended to all families and was then SEK 260 per year or SEK 22 per child and month. The price of milk was then SEK 0.30 per litre so the value of the monthly allowance was 72 litres of milk per month. – Quite a significant contribution. Using the consumer price index, in 2010 the value would have been SEK 383 per month and child.

In 2001 the child allowance increases as the number of children increases. The number of children born per mother has decreased as well as the death rates in Sweden as can be seen from the figure below. Regarding the 1948 decision one woman was interviewed by the Swedish Radio, Mrs. Persson. She had 13 children and one had died. The journalist asked her what she would do with the money. Three of her children went to school and they needed clothes. Perhaps she would save some of the child allowance in case the children would study further. She would not use the money on luxury such as bicycles. She did not plan to spend any money on herself. One of the heads of the child allowance system was born in 1948 and he believes that there was very little corruption in the system.

Finland

Child benefit scheme was introduced to Finland in 1948 by law. Since the 1920s there was a child benefit allowance that covered state workes with children. In 1948 this benefit became universal following the example of other Nordic countries. Benefit is paid for children until they turn 17, and it is only paid for children that live in Finland. There is also a supplement for single parents. Benefit is paid through national Finnish Social Insurance institution (KELA). The Åland Islands have a different scheme.

United Kingdom

In the UK, child benefit is administered by Her Majesty's Revenue and Customs (HMRC). As of April 2015 this is £20.70 per week for the first child (including the eldest of a multiple birth) and £13.70 per week for each additional child.^[8]

The system was first implemented in August 1946 as "family allowances" under the Family Allowances Act 1945, at a rate of 5s (= £0.25) per week per child in a family, except for the eldest. This was raised from September 1952, by the Family Allowances and National Insurance Act 1952, to 8s (= £0.40), and from October 1956, by the Family Allowances Act and National Insurance Act 1956, to 8s for the second child with 10s (= £0.50) for the third and subsequent children.

By 1955, some 5,000,000 allowances were being paid, to about 3,250,000 families.^[9]

It was modified in 1977, with the payments being termed "child benefit" and given for the eldest child as well as the younger ones; by 1979 it was worth £4 per child per week. In 1991, the system was further altered, with a higher payment now given for the first child than for their younger siblings. In October 2010, the Conservative-Liberal Democrat coalition government announced that Child Benefit would be withdrawn from households containing a higher-rate taxpayer from January 2013.

^[10] After some controversy this was amended so that any householder with a least one person with prescribed income over £50,000 would lose Child Benefit by a taper which removed it altogether when the income reached £60,000. This came into force on 7 January 2013.^[11]

New Zealand

New Zealand has a tax rebate system known as Working For Families, which are allocated to families based on income and the number of children. A report in 2012 by the children's commissioner Dr Russell Wills recommended New Zealand adopt a universal child benefit, which the Government rejected.^[12]

Comparison in Europe

(*) The following numbers cannot be compared directly because of different preconditions and taxation systems.

(**) The purpose of child benefits in Germany is to ensure that the subsistence level for a child is not taxed as required by the constitution. Therefore, child benefits are comparably high. When the taxes on the subsistence levels are deducted, an average of 50 euros per child remains, depending on the parent's income and taxation level. For low-level incomes, savings are highest; the level out around a taxable income of around 70,000 euros when there are 3 children.

(***) Belgium has supplements depending on the social status of a parent (retired, unemployed, invalid). Parents receive benefits until the child reaches the age of 25, as long as the child is enrolled in higher education.

	Belgium***			Denmark*			Germany**
No. of children	Child Benefit		Age of child	Child Benefit		No. of children	Child Benefit
1 Child	77.05 €		every child age 0 - 3	145 €		1 Child	184 €
2 Children	219.63 €		every child age 3 - 7	131 €		2 Children	368 €
3 Children	432.50 €		every child age 7 - 18	103 €		3 Children	558 €
additional child	212.87 €					additional child	215 €
	Greece*			France*			Ireland*
No. of children	Child Benefit		No. of children	Child Benefit		No. of children	Child Benefit
1 Child	5.87 €		1 Child	--- €		1 Child	135 €
2 Children	18 €		2 Children	120.32 €		2 Children	270 €
3 Children	40 €		3 Children	274.47 €		3 Children	405 €
4 Children	48 €		4 Children	428.62 €		Twins:	Child Benefit X 1.5
Additional Child	8.07 €		5 Children	582.77 €		Triplets and Quadruplets	Child Benefit x 2
			Additional Child	154.15 €
	Iceland***			Italy*			Luxemburg*
No. of children	Child Benefit		No. of children	Child Benefit		No. of children	Child Benefit
1 Child	115.25 € married parents		Annual income of parents up to 11,422.98 €	250.48 €		1 Child	185.60 €
2 Children and more	137.17 € married parents		Annual income between 27,693.04 and 30,403.39 €	38.73 €		2 Children	440.72 €
Single Parent:	191.92 € bzw. 196.83 €		Annual income from 43,962.05 €	no more payments		3 Children	802.74 €
						4 Children and more	361.82 €
	Netherlands*			Norway*			Austria*
Age of Child	Child Benefit		No. of children	Amount paid Birth after 1. Jan. 1995		No. of children	Family supplement
Children under 6 years	58.11 €		for every child	NOK 972 (129 €)		1 Child	105.40 €
Children age 6–11	70.57 €		in the northernmost areas of the country	additionally NOK 316 (42 €)		age 3	112.70 €
Children age 12–17	82.02 €					age 10	130.90 €
						Age 19	152.70 €
						2 Children: 3 Children:	+ 12.80 € + 25.50 € per child
	Finland*			Sweden*			United Kingdom(UK)*
No. of children	Child Benefit		No. of children	Child Benefit[13]		No. of children	Amount for children under10
First Child	100 €		1 Child	SEK 1050 (120 €)		First Child	£82 (105 €)
Second Child	110,50 €		2 Children	SEK 2250 (251 €)		Other Children	£54.20 (70 €)
Third Child	131 €		3 Children	SEK 3754 (411 €)
Fourth Child	151,50 €		4 Children	SEK 5814 (615 €)
additional children	151,50 €		5 Children	SEK 8114 (858 €)
			6 Children	SEK 10414 (1101 €)
	Liechtenstein*			Spain*			Switzerland*
No. of children	Child Benefit		Age of Child	Child Benefit		Age of Child	Family supplement per child
1 Child	CHF 260 (215 €)		Children under 18	24.25 € not-disabled 48.47 € disabled		Child supplement to age 16 (depending on Canton and no. of children)	CHF 200 to CHF 400 (165 € to 330 €)
Twins or over 3 Children	CHF 310 (260 €)		Children under 18	Disability >65 %: 260.79 € Disability >75 %: 381.19 €		Education supplement age 16 - 25 (depending on Canton an no. of children)	CHF 250 - CHF 525 (210 € - 440 €)
age 10 and more	CHF 310 each (260 €)

See also

• Baby Bonus
• Decreţei
• Human overpopulation
• Parental Leave
• Tax on childlessness
• Taxation in the United Kingdom
• UK labour law
• Cost of raising a child
• Elterngeld

Notes

References

External links

• UK HMRC child benefit page
• Child Benefit
• EntitledTo.co.uk
• The economics of birth control
• A comparison of Child Benefits in 22 countries in 2001

State benefits in the United Kingdom Current Income assistance Working age Working Tax Credit Jobseeker's Allowance (JSA) Income Support Carer's Allowance Employment and Support Allowance Flexible Support Fund (FSF) Old age State Pension Pension Credit Disability relief Disability Living Allowance Personal Independence Payment Attendance Allowance Child support Child Benefit Child Maintenance Child Tax Credit Combination Universal Credit Other Bereavement Benefit Housing Benefit Ambiguous Education Maintenance Allowance (abolished in England only) Former Council Tax Benefit Incapacity Benefit Severe Disablement Allowance Supplementary Benefit Invalidity Benefit Sickness Benefit