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Child Benefit axe threatens fresh wave of family breakdown

Family stability will suffer a further blow if the Government presses ahead with its current plans to axe child benefit for higher rate taxpayers, a new report by the think-tank Centre for Social Justice (CSJ) has warned.

 

Couples will be deterred from marrying or cohabiting and there will be a greater risk of fraud in the benefits system, which already costs the country £1.8 billion a year, the report says. Single mothers will be particularly hard hit because they will be worse off if they marry or move in with a high-earning man.

The report says that while it supports the principle of ending universal Child Benefit, there are "several fundamental flaws" in the way ministers are going about making the change. "There is a risk of further erosion of the stable foundation two-parent families provide within society," the report declares.

The report proposes an interim system under which Child Benefit would be subsumed into Child Tax Credits, which are calculated on total household income. This would begin to be withdrawn at household incomes above £40,000 per annum, ending entitlement at approximately £43,000. This would solve the unfairness problem and also eliminate the penalties on couple formation. It would also save a further £1 billion which could be ploughed back into additional support for families and children, such as a transferable tax allowance for married couples with young children.

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