Lords amendment: No. 5, in page 12, line 35, at end insert new Clause A:
A.—(1) In section 11 (which provides that certain children are not to be included in a family for family allowances purposes) of the Family Allowances Act 1965 after subsection (7) there shall be inserted—
(2) In section 13(1) (regulations) of the said Act of 1965 after paragraph (e) there shall be inserted—
§ 6.45 p.m.101
§ Mr. O'Malley
The amendments apply to family allowances provisions similar to those introduced into the Bill on Report in respect of child benefit by providing that a child shall not be included in a family for the family allowances purposes for a period for which he is entitled to NCIP. Also, as with child benefit and NCIP, the clause enables regulations to provide that any family allowances paid for a period for which NCIP is subsequently awarded shall be regarded as paid on account of the arrears of NCIP and that NCIP paid for a period for which it is subsequently decided that it was not payable shall be regarded as paid on account of arrears of family allowances which become payable for that period.
Where a severely handicapped young person can establish entitlement to NCIP, it is thought better that he should become a beneficiary in his own right rather than continue to be treated as a child for either family allowances or child benefit purposes. The provisions are somewhat complex, but they are beneficial.
§ Sir George Young
My hon. Friends and I would like an assurance that this proposal takes nothing away from the disabled. It appears from the debate in another place that a disabled child between the ages of 16 and 19 could be eligible for family allowances and also for NCIP. I understand that the effect of Lords amendment No. 5 is to withdraw family allowances in that case, which would mean a net reduction of welfare benefit from a disabled person. Perhaps the Minister of State would confirm that that is the case and that he is proposing to deprive a family with a disabled child of family allowances.
§ Mr. O'Malley
I think that I can give the hon. Gentleman an explanation which will satisfy him.
Non-contributory invalidity pension, which will be introduced from November 1975 under the Social Security Act 1975, will be payable at £7.90 a week. The interaction of NCIP and family allowances applies only to children aged 102 between 16 and 19. In this age group, NCIP is limited by legislation to children who are not in full-time education and family allowances are limited to those who are in such education. To pay family allowances as well as NCIP for a handicapped child able to follow a minimum of education would give him better treatment than a child so severely handicapped that he was incapable of undergoing any education—in which case family allowances would stop at the age of 16—and better treatment than the less severely handicapped undergoing normal education for whom NCIP could not be paid, although family allowance would continue.
In any event, family allowances would stop when the child reached the age of 19 and there would then be a drop in family income. NCIP is not taxable whereas family allowances are subject to tax and clawback, so it is clearly preferable where possible to pay NCIP to the handicapped child.
I hope that that explanation, complex though it is, will be acceptable and satisfactory to the hon. Gentleman and to the House.
§ Question put and agreed to. [Special entry.]
§ Subsequent Lords amendment agreed to.