Child benefit works, so why tinker with a winning system?

Speculation that child benefit could soon be means-tested seems unnecessary when the current approach works so well
Nick Clegg Shepherds Bush Families Project & Children Centre
Nick Clegg has refused to rule out any changes to the child benefit system. Photograph: Wpa Pool/Getty Images

Is the government about to axe universal child benefit? Nick Clegg refused to rule out cuts to the benefit yesterday, chancellor George Osborne has already frozen increases to the benefit for three years and now it is strongly rumoured that he is planning to go further.

At present the benefit is universal, with weekly rates paid at £20.30 for the eldest, or only, child and £13.40 for each additional child. But speculation revolves around means testing of the benefit, so those on lower incomes would get more money – while those on middle or higher incomes get little or nothing.

According to government statistics from 2008, child benefit costs around £11.5bn a year, making it an easy target for would-be reformers who are quick to identify the instant savings possible if payments to better off middle class families are stopped. But aside from increased bureaucracy, higher risk of error and the greater costs associated with administering means-tested benefits, the proposal rests on a flawed assumption: that financial parity exists within relationships.

A couple either living together or married may be jointly assessed as having a reasonable household income, but this doesn't necessarily mean that the money is earned and shared equally. Often, the female partner is financially dependent, leaving you wondering if the new chancellor has considered the impact this will have on many women.

Child benefit does not rely on financial co-dependency; it is unique in being a universal benefit paid directly to women for their children. Take up rates of around 98% are significantly higher than existing means-tested benefits. For many women, even those in relatively affluent households, it can be their only independent source of income. To take it away would increase their financial dependency, reducing many to asking for handouts from partners when their child outgrows shoes or needs extra money for a school trip.

And then there are more sinister elements of financial inequality: one middle class woman, who asked not to be named, described how her husband used money as a form of control, refusing to open a joint account and sometimes leaving her deliberately short if they had a disagreement. She relies on her child benefit as a safety net, delivering some financial freedom and the unilateral ability to provide extras for her children that her husband deems unnecessary.

Mo Kurimbokus, a counsellor for Relate, witnesses first hand the conflict money matters can cause among couples but does not accept that the government assumes couples will help each other out. "If there is already difficulty over money then this [the possible means-testing of child benefit] may highlight it," he says. "But ultimately couples have to be responsible not the government."

It's a point echoed by Fran Carter, a married working mother of two. While admitting that should her child benefit cease she would "undoubtedly miss it", Carter doesn't object to the principle of means-testing, her view being that any resultant shortfall is down to the couple to sort out. But even so, she expresses some caution over the likely assessment process, explaining that her husband pays £600 a month in maintenance for two children from a previous relationship, an outgoing not considered with existing means-tested benefits such as child tax credits.

Clare Embleton, who has a five-year-old daughter, highlights an additional potential complication for some families. Her live-in partner is not her child's father, and she says: "If child benefit was means-tested they would take my partner's salary into account. As we both earn fairly good salaries this would mean we probably wouldn't be eligible but crucially it presupposes his willingness to pay for a child who isn't biologically his."

While Embleton points out that her partner is happy to contribute to her daughter's upkeep it does reinforce the dangers of a means-tested approach.

Why tinker with a benefit that actually works?