Family Allowances in Australia for Children Under 16 Years of Age

Abstract

Family allowances for children take two forms: uniform child endowment scheme cash benefits and uniform income tax concessional deductions. The benefit per child by child endowment is the same for all income groups, but that received by tax remission increases with income because taxation is progressive. Child endowment benefits have long remained fairly static, while tax remission benefits have increased substantially as incomes have risen. Hence the scheme best suited to meet the criterion of need— child endowment—having declined from 62 per cent of family allowances in 1959 to 55 per cent in 1966, has become a much smaller component of the dual scheme of family allowances. An outline is given of two schemes which, while costing the government no more than the present dual scheme, would achieve a significant redistribution of benefits better designed to meet the criterion of need.