Child Care Allowance (Hansard, 31 January 1994)

§ 8. Mr. Duncan Smith
To ask the Secretary of State for Social Security how many additional people he expects to return to work as a result of the recent introduction of a child care allowance in family credit.

§ Mr. Lilley
We expect 50,000 families to take up work and be better off as a direct result of the change.

§ Mr. Duncan Smith
Will my right hon. Friend confirm that the child care allowance is not only available to those on family credit but to others such as those on disability working allowance? Does he agree that it is a tremendous leap forward in helping working families to get back to work—both partners?

§ Mr. Lilley
My hon. Friend is correct. As well as a disregard of child care costs in family credit, it is also available in disability working allowance and to some people on housing benefit, as well as council tax benefit. We believe that it will not only draw back into work some 50,000 people—perhaps more if more people than our cautious assessments respond to it—but it will also help some 100,000 families where one parent is already at work and on family credit, perhaps to increase their hours and the standard of living of that family. We think that it is a positive change which has been widely welcomed.

§ Mr. Bradley
Will the Secretary of State confirm that, as the child care allowance is a disregard against family credit, the lowest income families, who already receive their full entitlement to family credit, will receive no help whatever with their child care costs under the scheme?

§ Mr. Lilley
In general, those who earn least and therefore receive most family credit are those who work the shortest hours. They, of course, will be helped to work longer hours by being able to meet some of the costs of child support. That is precisely one of the reasons for introducing the changes.

§ Mr. Willetts
Does my right hon. Friend accept that nearly half of all recipients of family credit are single parents? Does not that show how effective the benefit is in ensuring that they get into work?

§ Mr. Lilley
Absolutely. Although family credit is not exclusively geared to help lone parents, it helps them disproportionately. It will help also married couples where one partner is disabled and unable to look after the children. It is a much more significant change than the rather grudging comments from the Opposition Front Bench. Indeed, it exceeds the request of the Daycare Trust for a £35 disregard by offering a £40 disregard.