Select Committee on Social Security Second Report


86. If the ICC is to be as successful as is hoped there will need to be a high level of take-up. As stated above, simplicity will be a factor. Another element will be the extent to which ICC will be seen as a family benefit, as opposed to assistance to the poor. The Womens' Budget Unit argued that if ICC, like Child Benefit, was to command widespread support as a contribution to the costs of child rearing, it would need to be seen as support which was withdrawn due to affluence, rather than support which was only available if poverty could be demonstrated.[164]

87. Ominously, the launch of Children's Tax Credit, the precursor of ICC, scheduled for April 2001, appears to be encountering some problems of take-up. Treasury estimates were that up to five million families would benefit from the introduction of Children's Tax Credit.[165] But by the end of January 2001, only 2.8 million claims had been returned to the Inland Revenue.[166] This figure does not include up to one million self-employed families, who will claim the credit in arrears, but nevertheless this still leaves over one million families who appear eligible for the credit but who have not yet claimed it. It is important to know the characteristics of those people who are not claiming, to establish whether there are trends in family structure; income or regions, so as to enable the more accurate targeting of take-up campaigns. We recommend that these patterns of lack of take-up are analysed by the Government. One problem appears to be that the Inland Revenue does not currently hold information to enable it to identify which taxpayers have children. It is also clear that there has been no co-ordination with the Child Benefit Centre, which holds records on 99 per cent of children and their carers in the UK. The Government argued that existing data on taxpayers were more likely to produce a better match to those eligible to claim Children's Tax Credit, and that a large proportion of Child Benefit recipients were non-taxpayers.[167]

88. We invited witnesses' views on this important aspect. The IFS considered that:

"Publicity tends to be pretty good for take-up. If there is a lot of publicity surrounding the announcement of this new measure, that will probably help."[168]

The Treasury confirmed that they were : "concerned to ensure is that we get as high a take-up as possible."[169] and suggested that:

"The critical thing is the gateway into the system. Why is there such high take-up of Child Benefit? This is because the mother has a baby and in hospital someone gives her a form to access the benefit. Clearly we must try to make the links here, so that as well as filling in the Child Benefit form, you can fill in your child credit form. You then have this simple entry point into the system."[170]

89. We found high levels of take-up of family benefits during our visit to Australia, which were confirmed by Dr. Peter Whiteford:

"There was a very positive campaign of trying to increase take­up. That included data matching with the tax system for people who looked at having incomes that qualified for payments, the Social Security Department got records from the Tax Department saying, "These people look as if they are eligible for payments," and then they wrote to them saying, "You may be eligible for assistance." In the early 1980s take­up was pretty low, probably 20 per cent. The latest estimate I was involved with was that it could be as high as 80 per cent."[171]

90. We agree that the take-up of ICC will be vital to its success and that active encouragement to claim should begin as soon as a child is born. We therefore recommend that Integrated Child Credit application forms be sent to parents of newly-born children alongside those for Child Benefit and that data matching between Child Benefit and Income Tax records should be regularly used, as in Australia, to identify likely claimants and to encourage them to claim.


91. The Committee welcomes the opportunities the introduction of ICC gives to tackle child poverty, increase work incentives, and produce a simpler and more coherent system of administration for the benefit of recipients. However, many details are still to be decided and questions remain about the viability of the timetable for its introduction, the level of payment and the considerable investment which will be required in new technology to make the promise of ICC a reality.

164   Appendix 4, para 11. Back

165   HC Deb 29 January 2001, vol 362 col 41W. Back

166   The Guardian, 27 January 2001. A later parliamentary question showed that by 7 March 2001, 3.2 million claim forms had been returned. Taking into account families not paying tax under PAYE, this still leaves just under one million families who are eligible but have so far failed to claim Children's Tax Credit (HC Deb 12 March 2001, col 474W) . Back

167   HC Deb 23 January 2001, vol 361 col 568W. Back

168   Q 189. Back

169   Q 247. Back

170   Q 254. Back

171   Q 61. Back

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