New tax credit figures – CPAG gives guarded welcome
02.03.06

The Child Poverty Action Group (CPAG) has given a guarded welcome to take-up figures for the first year of the new tax credits system published today.

Statistics from HM Revenue & Customs show that in 2003/04, the first year of the new tax credits system, 79 per cent of eligible families claimed the Child Tax Credit. This figure rose to 93 per cent amongst families with children earning less than £10,000 and to 91 per cent amongst working lone parents.

Kate Green, Chief Executive of the Child Poverty Action Group, said:

“These figures for the first year of the new tax credit system are encouraging and we’re particularly pleased that take-up is highest amongst the low-income families who need them most. Although these take-up rates appear higher than the old working families tax credit system, they are still significantly lower than the 98 per cent take-up rate for universal child benefit.

“The Government must now build on this progress and do more to ensure that families who are missing out get what they are entitled to. This should not only be done through take-up campaigns but also by improving the way tax credits work. For instance, even if you’re in receipt of tax credits, overpayment recovery or underpayments may reduce your income substantially.

“Since one in ten of the poorest families are still slipping through the net, child benefit remains vitally important in tackling child poverty. Ministers should therefore look at increasing child benefit further and raise the rate for second and subsequent children to the rate for the first child. Child benefit is simple, popular with the public and guarantees support for some of the poorest families with children. And as Government-funded research published this week shows, child benefit is an important and stabilising influence for families with fluctuating incomes.”

For further information please contact:
Alex Belardinelli
CPAG Press Officer
Tel. 020 7812 5216 or 07816 909302
abelardinelli@cpag.org.uk