WHY RICH PEOPLE SHOULD HAVE CHILD BENEFIT
The government is doing a U turn on the plan to scrap child benefit for those on higher tax brackets. That’s great. Here’s why:
Child benefit works because it isn’t means tested. You don’t have to prove your income. That is why almost everyone who is entitled to it claims it. It is simple to administer too. All you have to do is prove that you are the main carer for a child so it is harder to fiddle.
- Means tested (income related) benefits don’t work. They are complicated to administer. In extreme cases they cost more to administer than the money paid out. People don’t claim. For example huge numbers of pensions are missing out on pension credit. Nearly all means tests create unfairness – why does a family where one person is the only worker lose benefit even though their income is less, whilst a family with a higher joint income where both work keeps their child benefit?
- When it starts, a means test just affects people on high incomes. But soon the bar is lowered and people on moderate and low incomes start to miss out.
- When everybody gets a service then everyone has an incentive to make sure that it works, when something is just for people on low incomes it becomes, in the words of David Cameron “a poor service for poor people.” People fight for the NHS and for state education because they have an interest in it. So it is with child benefit
- Child benefit paid to people with children and is usually paid to women, so it represents a transfer of income at any level from the child free to those rearing children and from men to women. We should support this.
hen you see people saying that the rich should not get benefits like bus passes and benefits remember that this is one step away from saying that universal services like education and health should only be for the poor.
The answer is, of course, that universal benefits and services should be funded by higher taxation of those who can most afford to pay. The tax system is by no means perfect, but it beats any system of means tested benefits