25 March 2010
Families earning less than £50,000 a year who have children under three years old will get an extra £200 a year in a new Toddler Tax Credit, Yvette Cooper confirmed today.
The Government already provides extra help for families with babies and free nursery school and childcare places when children are three years old. These new measures will provide more support for 885,000 families with toddlers when costs can be high and when many parents want to stay at home or work part-time.
Work and Pensions Secretary Yvette Cooper said:
"This toddler tax credit gives parents more help and choice when they need it most. It will give families with young children an extra £200 a year in their pockets at a time when many parents want to stay at home or work part time."
Yvette Cooper also announced that grandparents, or other family members, who step in to raise children in times of family difficulty, will be up to £56 per child a week better off due to changes in the benefit system.
The measures will be paid for by the Department for Work and Pensions. New automated benefit processes and additional rigorous checks to prevent overpayment errors are expected to save £200m a year which will fund these measures for families.
Yvette Cooper said:
"We will spend £10m to put more money into the pockets of family members like grandparents who step in and bring up their grandchildren when their families are going through hard times.
"These people are often unsung heroes, who have not been properly recognised by the benefit system up to now. They will now be up to £56 a week better off as they will be able to keep the money they receive to care for their grandchildren, as well as their housing and council tax benefit."
Notes to Editors
1.Currently there is already a premium for babies under one year old in child tax credit (called the baby element with a value of £10.50 a week) and this does very well at lifting children out of poverty. We have therefore created a policy for 1-2 year olds which is targeted at low income families. We will introduce a per child element of £4 to the child tax credit for 1-2 year olds.
2.Discretionary payments made to kinship carers by local authorities are partially disregarded to the amount of any excess of the personal allowance payable in the Housing Benefit /Council Tax Benefit assessment for each child (currently £56.11). The Government will now disregard these payments in calculating HB/CTB entitlement.
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