Child benefit plan could triple payments in December Budget

Child benefit payments could be tripled in the December Budget, according to the terms of a proposal published by the ESRI today.

But it is understood the organisation will not advance the notion for further consideration on the grounds that it would benefit the wealthy more than the less well-off. Anomalies have also been identified in what is being proposed.

The proposal is central to a paper to be presented to the ESRI pre-Budget conference today, which sets out increased child benefit payments for first children under the age of five years to £135 a month from £42.50 at the moment. This would have fallen to £115 for children between five and 12 and to £65 for those over 12.

The new payment would replace a raft of other payments including family income supplement, child dependent allowances and the stay-at-home carers' allowance. It would cost the Exchequer an additional £500 million a year.

According to the proposals' authors, the new policy would benefit less well-off households, particularly the least well-off. However, it also results in higher absolute gains to wealthier households.

According to the paper, existing policy lacks a strategic focus and £1.5 billion is diluted on a variety of ad-hoc measures, including the new home carers' allowance. However, the proposed new policy also throws up many anomalies.

As a result, it suggests increasing child dependent allowances, as well as abolishing them.