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The Child Benefit Changes Are Chaotic, Unfair and Perverse

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Two and a half years ago George Osborne announced at the Conservative Party conference that child benefit would no longer be universal and would be taken away from parents on middle incomes.

Today, as the reality of that announcement bites for over a million families, it's clearer than ever that David Cameron and George Osborne failed to think this policy through.

First, it is turning out to be a costly administrative nightmare. HMRC has had to deploy more staff on making the child benefit changes than it employs in its 'offshore co-ordination unit' and 'affluence unit' combined to tackle tax evasion and avoidance by wealthy people.

Treasury minister David Gauke complacently claims everything is going smoothly, but around 300,000 families have still not been notified about the change. And just 200,000 families have opted not to receive child benefit, meaning around one million families may now get a nasty shock when they face having it clawed back through complicated self-assessment tax returns at the end of the year.

New mums who are no longer eligible for child benefit are being advised to continue registering to claim it and then immediately opt-out. If parents aren't aware they still need to register, whether or not they are now eligible, they face losing national insurance pension credits and so being worse off when they retire.

Second, it is perverse and unfair. Single earner families on £50,000 will have their child benefit cut while some couples earning as much as £100,000 keep all of theirs. Meanwhile, those on incomes over £150,000 are actually getting a tax cut - worth an average of £107,000 for 8,000 millionaires.

Of course it's not only families seeing their child benefit taken away who are being hit by this government. Millions of working families on modest and low incomes have already seen their child benefit and tax credits frozen and this week the government will push through plans for real terms cuts in this support over the next three years.

As House of Commons Library research commissioned by the shadow equalities minister Yvette Cooper shows, women are bearing the brunt of these changes. 98% of those hit by today's child benefit change are women, and two thirds of the losers from the overall cuts to tax credits and benefits are also women.

The government can no longer claim we are all in this together when millions of striving families are paying the price for David Cameron and George Osborne's economic failure, while millionaires get a tax cut.

If the government wants the highest earners to pay their fair share, they should cancel the top rate tax cut for people earning over £150,000 this April. And if they really want to get the benefits bill down, they should start getting our economy moving again and help get people who are long-term unemployed back to work.

That's what Labour's compulsory jobs guarantee would do. It's a costed plan to give every adult out of work for two years or more a job, which they will have to take up or lose their benefits.

But instead of welfare reform that is tough, fair and that works, David Cameron and George Osborne are pressing ahead with a chaotic, unfair and perverse policy. And once again it is striving families who are paying the price.

Around the Web

HM Revenue & Customs: Child Benefit: Introduction

Citizens Advice - Benefits for families and children

BBC News - Child-related benefits may be 'capped' at two children

BBC News - Q&A: Child benefit changes

Middle–class moaners over child benefits are nimbies, says minister ...

Two-child benefits policy targets the strivers in low-paid jobs ...

George Osborne revealed he and his wife contacted tax chiefs asking for money ...

£150m in child benefit for families of 5 kids or more

UK PM defends controversial cuts to child benefit payments

Benefit cuts 'will see more children taken into care'

Women are the losers in child benefit cuts, says Labour

What a relief! The madness of child benefit for all ends today