Under the latest government proposals child benefit could be limited to two children per family. The Government is looking for ways to cut the welfare bill and this is one option currently being discussed. Originally there were discussions of non-working families having child benefit and child tax credit limited if they have more than two children but the most recent proposals go further than this.
The proposals would mean that child benefit would be paid to working and non-working families for the first two children but no more after that. The benefit would only apply in the future, easing fears that it could apply to families who currently rely on the benefit.
There are concerns that people rely on child benefits too heavily and the latest proposal would make people think twice as to whether they can actually afford another child without a helping hand from the government.
There have been recent reforms to the child benefit system which come into force in January 2013. Under those reforms child benefit is reduced for families where one earner is paid more than £50,000 and if one earner is paid over £60,000 the benefit is lost altogether. This has been one of the governments most popular policies, with 82% of people surveyed backing the proposal.
The latest proposal however is likely to be less popular given that it will affect working and non-working families alike. Some have predicted that there will be a backlash against the idea but there is no doubt it would certainly make families more self sufficient going forward.
Any changes in the child benefit system could impact heavily on separated families in that the resident parent will be more inclined to claim maintenance payments against the non-resident parent, given the limited government help available.
There may also be a rise in Schedule 1 claims, which are claims made by one parent against the other to meet the needs of dependent children. Schedule 1 claims are made in addition to the usual maintenance payments and an application can be made for a number of items including, but not limited to, the costs of school fees, housing a child and educational equipment.
For further information on family law matters, please contact Shelley Chesworth in the Private Client team on 0161 475 7682.