The cuts will create gender inequality in state pension provision
George Osborne’s proposal to scrap universal child benefit is yet another example of how the spending cuts will hit women disproportionately hard.
As Sunder Katwala at Next Left and others have pointed out already today, the cuts to child benefit will have worrying ramifications for women’s state pension entitlement. Here’s a bit more detail about what it will mean.
There is currently special provision in the state pension system for carers who aren’t in formal employment, and it is closely linked to the benefit system. Until 6 April 2010, those with caring responsibilities were entitled to something called Home Responsibilities Protection (HRP), which could reduce the number of qualifying years of national insurance contributions for carers not in work, protecting their right to a full state pension. It has since been replaced by a new credit system, but the intention is the same: to see that those who don’t make national insurance contributions because of caring responsibilities don’t lose out on their state pension entitlement.
The criteria for receiving the new “carer’s credit” is unambiguous: you are eligible if you receive “Child Benefit for a child under 12 years of age”, are a foster carer, or care for a disabled person for at least 20 hours a week.
While the child benefit cut will, in practice, only affect those who are already relatively comfortably off, it is yet another example of how the cuts will have a greater impact on women than men. Women who stay at home to care for children while a partner earning more than £44,000 supports the family will lose their entitlement to the carer’s credit, and thus the full value of their state pension.
This inequality, created by the cuts announced by Osborne today, is in addition to the absurdity (already highlighted by my colleague George Eaton this morning) that the cuts will leave households with a single earner bringing home more than £44,000 without child benefit, while double-income families where neither earner makes more than £43,000 will continue to receive child benefit.