Family boost 'could fall flat'

By HELEN MONKS
Updated:

 

THE Chancellor's planned £2.5bn boost for families could fall flat without hefty promotion, pundits fear. Tax experts and potential recipients also say the Department for Work and Pensions needs to make applying for the tax credits as simple as possible.

'It needs to be made very clear when people are eligible and the changes might need to be backed by some kind of advertising campaign,' says Carolyn Steppler, senior tax manager at Mercer. 'It is a great shame that people have to claim at all and can't get automatic benefit.'

However, Steppler applauded the Treasury for its plans to combine household incomes for the purpose of the Child Tax Credit under the new plans.

Gordon Brown announced that from April 2003, those earning less than £50,000 will receive Child Tax Credit of £1,400 a year, while those earning between £50,000-£58,000 the credit will receive between £800 and £1400 a year.

Those earning up to £66,000 would receive some help in the child's first year. Around 90% of families would benefit from the new system.

In addition, a family with two children on £35,000 a year could receive childcare help of £50 a week.

Brown also proposed increasing the working tax credit so a working couple with no children would receive £183 a week, £53 more than the current minimum. A single working person would get at least £154 a week, £25 more than the current minimum.

Some working families are unconvinced. 'Why is the Chancellor making people go through the rigmarole of claiming?' says father-of-three George Neill. His household income is £35,000. He told This Is Money: 'Many people just won' bother because they think they aren't eligible.'

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