Child benefit freeze 'to cost families £400'

Child benefit has been frozen for all families since April 2011. As such, a family with two children will see the amount they receive in child benefit frozen at £20.30 a week for their first child and £13.40 a week for their second child until 2014.

According to analysis by the TUC, a family with two children suffered a “real-terms cut” in child benefit of £57.20 in 2011/12. Based on these calculations, the same family will lose £153.40 over the course of 2012/13 and £197.60 during 2013/14.

Families where an individual earns between £50,000 and £60,000 will also see additional cuts to their child benefit under the new tapering system, while families where an individual earns more than £60,000 will lose child benefit completely.

The research also warns that plans to introduce a new sliding scale of child benefit payments for people earning between £50,000 and £60,000 will cost taxpayers more than £100m over the next five years in set-up and administration costs.

The TUC argues that this will reduce the savings that the changes generate for the government, while discouraging families directly above and below the threshold for the means test from claiming support.

TUC general secretary Brendan Barber said that millions of families would end up being worse off.

“By ploughing ahead with the introduction of a costly means test the government is only making the problem worse – introducing confusion and uncertainty into a system that used to work well as a way to provide vital support to millions of families,” he said.

“The best way to make the rich pay their share is through the tax system but this government has done the opposite by reducing taxes for the very wealthiest. Cutting the value of benefits for children and introducing complicated new assessments means those in greatest need will get less, with the poorest children suffering the most.”