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which was withdrawn due to affluence, rather than support which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.
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.
But by the end of January 2001, only 2.8 million claims had been
returned to the Inland Revenue.
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
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."
The Treasury confirmed that they were : "concerned
to ensure is that we get as high a take-up as possible."
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."
89. We found high levels of take-up of family benefits
during our visit to Australia, which were confirmed by Dr. Peter
"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
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
HC Deb 29 January 2001, vol 362 col 41W. Back
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
HC Deb 23 January 2001, vol 361 col 568W. Back
Q 189. Back
Q 247. Back
Q 254. Back
Q 61. Back