The rates of child dependant allowances – CDAs – payable to claimants of the widow's-widower's contributory pension and the widow's-widower's non-contributory pension are currently set at £17 per week and £15.20 per week respectively. These rates, as with all other CDA payments, have remained unchanged since 1994.
Recognising that the loss of CDAs by social welfare recipients on taking up employment can act as a disincentive to taking up work opportunities, successive Governments have, in the intervening period, instead pursued a policy which seeks to make child income support more neutral vis-a-vis the employment status of the parent(s) by concentrating resources for child income support on child benefit.
The employment disincentive problems associated with CDAs were highlighted particularly in the report of the expert group on the integration of tax and social welfare.
Unlike CDAs, child benefit does not contribute to poverty traps or work disincentives, as it is a universal payment which is not subject to a means test. The value of the child benefit scheme as an effective mechanism for the provision of child income support is reflected in the substantial investment which the Government makes in the scheme. The 1999 budget provided for a full-year investment of over £40 million in the scheme, while the 2000 budget provides for a full-year investment of almost £106 million, which will bring the total investment in the scheme up to some £575 million.
The policy of concentrating substantial additional resources on child benefit rather than increasing CDAs remains, in my view, as valid now as it was when it was initiated.