The Centre for Social Justice (CSJ) has given its verdict on the Budget, and comments that whilst it welcomes the removal of the ‘cliff edge’ from the proposed child benefit reforms, there remains a fundamental flaw within the Government’s plans that could threaten a new wave of family instability and breakdown.
The introduction of a gradual withdrawal of child benefit from households with one individual or more earning above £50,000 a year fails to deal with the significant danger in the Government’s child benefit reform proposals: the financial disincentive against couple formation and commitment.
According to the CSJ, despite amending their proposals, the Coalition has done nothing to address the one earner / two earner anomaly. Ministers will still, therefore, introduce a bizarre new couple penalty into the tax system for higher earners which flies in the face of their commitment to ‘shared parenting’.
The CSJ also believes that this new model could also lead to greater benefit fraud, as those who live together but are not married face a difficult decision. Either they will have voluntarily to inform the tax authorities of their personal arrangements or elect to commit fraud by denying the cohabiting status of their relationship and continuing to claim the benefit. Married couples will not have that ‘invisibility option’.
