Child benefit is currently payable in respect of all children up to age 16 and continues to be paid in respect of children up to age 19 who are in full-time education or are physically or mentally challenged. Child benefit is payable at double the normal rate for each child where three or more children are born together.
In recognition of the significant additional costs involved for parents of twins, I made provision in last year's budget for increasing the grant in respect of the birth of twins from £200 to £500 and for the introduction of a new grant of £500 which is payable on the twins reaching the ages of four and 12 years of age. These improvements were backdated to apply to all twins born and those reaching the ages of four and 12 years respectively on or after 1 January 1996. Over 1,400 families have benefited from these improvements at an annual cost of almost £700,000.
In line with the recommendations contained in various reports, including the Expert Working Group on Integrating Tax and Social Welfare, the interim report of the Commission on the Family and the ESRI report on poverty in the 1990s, I have targeted this year's improvements in child income support to benefit low income families and, in particular, larger families. This has been achieved by increasing the higher rate of child benefit, payable in respect of third and subsequent children by £5 and in addition, increasing the lower rate of child benefit, payable in respect of the first and second child by £1. When taken together with the increases provided for in the 1995 and 1996 budgets, the new rates of £30 and £39 represent an increase of 50 per cent in the rate payable for the first two children and 56 per cent in the higher rate payable in respect of the third child onwards.
In the context of reducing disincentives to work, priority is being given to FIS as a means of increasing the net return from work to families with children. Accordingly, FIS will be reformed so as to be calculated on a net income basis, rather than on gross wages, as at present. This will significantly increase the supplements payable under the scheme, thereby increasing the rewards from work.