Child Benefit and Other Benefits in Respect of Children

Part of Clause 21 – in the House of Commons at 12:00 am on 10 May 1977.

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Photo of Ms Audrey Wise Ms Audrey Wise , Coventry South West 12:00, 10 May 1977

I beg to move Amendment No. 31, in page 13, line 12, leave out from 'deemed' to end of line 15 and insert: 'to exclude any of the payments made in respect of that child as listed in subsection (4)'. The Committee might find the amendment a little cryptic, and it is therefore necessary to explain its purpose and how it arises. Unfortunately, subsections (3) and (4), with which the amendment deals, are themselves cryptic and difficult to follow, so I had better begin by explaining their purpose.

An anomaly was created, through the introduction of the child benefit scheme, for widows and certain other people receiving State allowances. Those people were to lose £1 from their allowances and also the appropriate part of the child tax allowance. This was to be replaced only by the single payment of £1 child benefit. Therefore, whereas other taxpayers would lose the child tax allowance, with the child benefit moving in to balance up the payment in their favour, that was not so in the case of widows, who would actually be worse off. The Government therefore took appropriate action to remedy that anomaly, and I am at one with them in that.

However, in considering subsections (3) and (4) it seemed to me that there was an opportunity for improving the situation of widowed mothers, guardians and those receiving certain other State allowances for children. I believed that it would be a pity to miss that opportunity.

The effect of the amendment is therefore to exclude from the reckoning of the taxable income of the parent concerned not only £52 a year—the equivalent of the child benefit—but the whole of the amount being paid by the State in respect of that child. Therefore, under the amendment the whole of the widowed mother's allowance attributable to the child or children would be excluded from the reckoning. That would, of course, have the effect of improving considerably the tax position of widows and certain other one-parent families and guardians. The people concerned are listed in Clause 31(4). but those who scrutinise the list may not find it crystal clear about those to whom the payments refer.

10.45 p.m.

Perhaps I should explain that, for instance, in Clause 31(4)(a) the child's special allowance under the 1975 Social Security Act relates to the amount that is paid in respect of a child or children to a divorced woman whose ex-husband has died. The guardian's allowance is the amount that is paid to guardians in cases where both parents have died or where one parent has died and the other is missing, or where one parent has died and the other parent is in prison.