Facts and figures
This year is the 75th anniversary of the passing of the Family Allowances Act. The Act was passed on 15 June 1945.
Introduced by the wartime coalition government, it established the family allowance, a benefit paid to families for each second and subsequent child. The allowance was a universal benefit, meaning that it was provided to all families and was not means tested. It was originally five shillings per week per child and was funded directly from taxation.
The family allowance had been campaigned for by Eleanor Rathbone, who was elected president of the National Union of Women’s Suffrage Societies in 1919. In her 1924 book, The Disinherited Family, she argued that an allowance would help alleviate child poverty. She also said the benefit should be paid directly to mothers in recognition of their contribution to families and to combat their economic dependency on men.
Eleanor Rathbone was elected as an Independent MP for the combined English universities seat in 1929. She remained an MP until shortly before her death in 1946.
Family Allowances Bill
The introduction of a family allowance was one of the recommendations of the Beveridge Report, alongside other measures to alleviate poverty, such as the creation of the National Health Service.
When introduced, the bill originally proposed that the allowance would be paid to the father of the household rather than the mother. However, Eleanor Rathbone tabled an amendment requiring the allowance be paid to the mother instead. This was passed in a free vote in the House of Commons.
The initial allowance of five shillings per week per child was lower than the eight shillings per week originally proposed by the Beveridge Report. Five shillings per week is equivalent to £10.55 in today’s money.
Replacing Family Allowances with Child Benefits
Changes to the family allowance were made by subsequent governments. For example, it was expanded to include the first child in 1975. However, it remained a universal benefit.
The family allowance was replaced by child benefits in 1977. Child benefits remained a universal benefit until 2013, when a tax charge was introduced for earners over £50,000.
Child Benefits Today
- Child benefit is currently worth £21.05 a week for the eldest child and £13.95 a week for additional children.
- In August 2019, 7.28 million families were in receipt of child benefit. In total, 12.66 million children are in families in receipt of child benefit.
- According to HM Treasury, the introduction of means testing for those earning over £50,000 has led to a decline in the number of child benefit claimants. In 2019, there were approximately 44,000 fewer families claiming child benefits compared to the previous year.
- In 2019/20, child benefit made up 5.4% of welfare spending in Great Britain, compared to 11% in 1978–79.
- House of Lords Library, Welfare Changes: Impact on Family Life, 25 October 2018
- Institute for Fiscal Studies, ‘Benefits for Families: Child Benefit’, accessed 30 April 2020
Image by Thiago Cerqueira from Unsplash.