© Institute for Fiscal Studies, 2007 Government Financial Support for Children across the United Kingdom: how does Northern Ireland compare? Stuart Adam Mike Brewer James Browne David Phillips

© Institute for Fiscal Studies, 2007 What’s coming up? Defining ‘Financial Support for Children’ –What we include –What we don’t The characteristics of Northern Irish families The broad trends in support for children Differential trends over time Conclusions – how does Northern Ireland fare?

© Institute for Fiscal Studies, 2007 Defining Financial Support for Children a child: anyone aged <16 or, <19 and in f/t education. any tax credit or benefit that a family with children receives that an otherwise equivalent family without children would not. - e.g. child benefit, child tax credit and child additions to benefits. - some transfers that are not explicitly labelled as “child related”. - not include all support that families with children receive as they would still get some even without children. not include everything due to reasons of data availability. - e.g. disability living allowance, accrued pension rights for mothers etc.

© Institute for Fiscal Studies, 2007 The characteristics of Northern Irish families Compared to families in Great Britain, NI families are: Less likely to be headed by lone parent. -lone parents are less likely to be employed in NI Larger, on average, for parent couples. - couples are more likely to have both working full time in NI Poorer, on average (except compared with Wales) More likely to receive working tax credit or a disability related benefit.

© Institute for Fiscal Studies, % rise Total UK Spend£16.25 bn£26.25 bn61.5% Spending since 1997

© Institute for Fiscal Studies, % rise Total UK Spend£16.25 bn£26.25 bn61.5% UK per child exp.£24.09 p/w£38.91 p/w61.5% NI per child exp.£24.13 p/w£39.28 p/w62.8% Spending since 1997

© Institute for Fiscal Studies, % rise Total UK Spend£16.25 bn£26.25 bn61.5% UK per child exp.£24.09 p/w£38.91 p/w61.5% NI per child exp.£24.13 p/w£39.28 p/w62.8% Within Northern Ireland: Lone-Parent (per child)£41.95 p/w£62.38 p/w48.7% Couple Parent (per child)£18.75 p/w£32.32 p/w72.4% 1 child family (per child)£31.18 p/w£50.11 p/w60.7% 4+ child family (per child)£23.95 p/w£38.55 p/w61.0% Spending since 1997 Source: Family Resources Survey (2004) and authors’ calculations.

© Institute for Fiscal Studies, 2007 What determines transfer amounts? Family income -Poorer families get more support per child Family size and family structure. - Bigger families get more support overall, but less per child than 1 child ones. - Lone parents received additional benefit payments until So what does this mean for Northern Ireland? Gets more per child because families are typically poorer. -Also see a faster increase because most of rise is in ‘means tested’ tax credits Gets less per child because families are typically larger. -But does mean a faster increase (larger rise in ‘per child’ benefits)

© Institute for Fiscal Studies, 2007 The broad trends in support Support per Child per Week Source: Family Resources Survey (2004) and authors’ calculations.

© Institute for Fiscal Studies, 2007 The 2003 reforms: Why did NI benefit less? Switch from WFTC to WTC. - More families in NI affected by this reform and extension to the childless. Abolition of child elements in some disability benefits. -Carers Allowance being important – More NI families receive this benefit. These changes affect families right across the UK. It’s just that Northern Ireland has more such families.

© Institute for Fiscal Studies, 2007 Conclusions: How does NI Fare? Support per child is higher in Northern Ireland because its families are poorer than average. This is counteracted by having large families. Across the whole period analysed, support per child rose by more in Northern Ireland than in Great Britain. The ‘slowdown’ in 2003 is largely due to switch from WFTC to WTC which is available to childless families too. Overall it is difficult to argue that Northern Ireland has done poorly from the changes of the last decade.