The costs of a child in a low-income household

Abstract

This paper considers the extent to which the United Kingdom (UK) 2010 social security system meets the costs of a child in a low-income household. The costs of a child are derived from a loneparent and two-parent family budget standard (minimum income standard). The items in the child’s basket of goods and services include food, clothing, household goods and services, personal care, transport and cultural and social participation necessities. The costs vary by age and according to whether childcare costs are included. Excluding childcare costs, the cost of a child increases with age, varying between £77 per week for 0- to one-year-olds to £116 per week for a secondary school child. There are some economies of scale for families with more than one child. These estimates are used to assess the modified Organisation for Economic Co-operation and Development (OECD) equivalence scale and the adequacy of the contribution of the state in child benefits and child tax credits. The state contributes only part of the total costs of a child in low-income families, which means that these costs may have to be met out of the adult benefits.