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Child benefit - facts and figures

Published on 5 Oct 2010 17:00 : 0 comments : 1371 views

I'm Estelle and I am the product assistant for Genes Reunited. I am a mother of two and work full-time here at Genes. I was very interested to read in the news this week that the chancellor George Osborne will be axing child benefit in 2013 for any families where one of the parents pays the higher tax rate of 40%. In other words, anyone earning over roughly £43,875 will no longer receive it. Rather controversially, if both parents work but neither is a higher rate tax payer they will still be entitled to the money. So, you could have two parents with a joint income of £80,000 who'll still be receiving their child benefit.

Being interested in history and family history, this got me wondering when it all began so I did some digging. Child benefit was originally known as the Family Allowance and was introduced just after the Second World War when the average salary for a family was £380.99. It was introduced in 1946 to encourage families to grow after so many people lost their lives during the War. Mothers were given a book and they claimed 5 shillings a week for their second children and any children after that. In today's money 5 shillings is worth about £6.90. The payment was made regardless of the income of the family. You can imagine what a big difference that money must have made to families back then. The Family Allowance for one child alone could almost double the income for a family earning around £380 a year.

The Family Allowance continued for about 30 years in conjunction with the child tax allowance until the economic downturn in the 1970's when it was then re-structured. The Family Allowance and the child tax allowance were combined and re-named Child Benefit in the late 1970's. These payments were now tax-free and were also given to the first born child.

In the 1990's further changes were made due to the recession. The first child now received a higher payment, but the payments for any subsequent children were frozen.

Today families receive £20.30 for the first child and £13.40 for each child after that every week. The Chancellor already froze the child benefit payments in his June budget this year for the next three years, but now he has decided to stop them altogether.

How will these cuts affect you? It will affect my family and I know I'm not alone. These cuts will affect an estimated 1.2 million families in the UK. We'd be interested to read your comments.