Think–tank attacks child benefit cuts

Child benefit cuts will cause “incoherence” in the welfare system and undermine other UK government reforms, a respected economic think-tank has warned.

The Institute for Fiscal Studies (IFS) issued a highly critical analysis of the move to strip the payments from some higher earners from next week.

While it made sense to target universal benefits paid to the better-off, the way it was being done was “problematic”, it said.

It warned that some families would end up losing as much as 65p of every extra pound they earned – making it more likely they would work less or put more into pension funds to avoid the hit.

The IFS also said there were no plans to change the thresholds at which parents would start to lose the pay-outs, meaning more and more may be caught by the means test.