Parents of children are currently entitled to claim both tax credits and child benefit. Tax credits are means tested and based on a number of factors including an allowance based on the number of children cared for. Child benefit is not currently means tested.

The tax credit child allowance should be increased by the value of child beneft and child benefit should be cancelled. 

Why is this idea important?

By merging the two benefits, child benefit will automatically become means tested and as income increases the value of the benefit received will decrease. In addition by only having one benefit it makes it easier to claim and reduces HMRC costs in handling two sets of claims.

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