To coincide with the overdue increase in benefit rates and the base rate of the Working for Families In-Work Tax Credit, Child Poverty Action Group (CPAG) is launching a campaign today to raise public and political awareness of the fundamental inadequacies of the Working for Families tax credit scheme.
Working for Families does not work for ALL families. We want Government to Fix Working for Families, so that it is FAIR. #FWFF
Despite being supposedly targeted to alleviate against child poverty, in its current state, the Working for Families (WFF) scheme unfairly discriminates against those children most in need. Approximately 230,000 children are unfairly denied $72.50 a week that is made available for other children. This is because their parents do not meet the criteria of being in paid work for a certain number of hours per week (20 for a sole parent and 30 for a couple). This In-Work Tax Credit (IWTC) is framed by the Government as a work incentive, intended to ‘make work pay’. To tie this payment of $72.50 per week to the parents means only that the children miss out. It is discriminatory and unfair.
There are two major WFF tax credits: the first one is the Family Tax Credit (FTC) that all low-income children get; the other is the IWTC that only some, the ‘deserving’ get.
The IWTC rewards parents who work, but only if that work is for pay, despite it being a child-related tax credit. When a parent loses their job, or has their hours reduced to below the minimum, their children are effectively punished by losing the IWTC worth at least $72.50 per week. Through no fault of their own, these children, those most in need in our society, are denied access to funds that are made available to other children living in similar circumstances.
Sole parents are put under greater pressure. While the IWTC makes it easier for one parent to stay home (where there is a full-time breadwinner), sole parents lives are made even harder: to access this support they must be in paid work for at least 20 hours a week, irrespective of their children’s needs or how many children they have. Even when they can work the magical 20 hours, unless they come off the benefit entirely, they still don’t qualify for the IWTC. Furthermore, if they come off the benefit they will need other top-ups that also disappear if hours of work fall below 20.
Despite encouragement to up-skill, study (whether part or full-time) is not counted as ‘work’, and therefore families in which parents are full-time students also miss out, if they fall below the required number of paid hours or are receiving a student allowance.
Child Poverty Action Group recommends that all children of low-income families are able to access the same tax credits. The first vital step is to join the In-Work Tax Credit up with the Family Tax Credit. Overnight, the worst-off families with those children most in need would have an extra $72.50 a week, making a huge and powerful difference to their lives. This is the most urgent of our policy asks – but there are more WFF inadequacies to address. Our full recommendations are discussed on our website.
We need to make our children at the heart of better policy. The United Nations Convention on the Rights of the Child (UNCROC) requires that all policy decisions concerning children must have the best interests of children as a primary consideration in determining policy. Right now, we are failing our children and not acting in their best interests. We need to Fix Working For Families and bring the child’s best interests at the forefront of our policy making.