Welsh Child Poverty Payment Trial Faces Legal and Practical Challenges
The Welsh government’s pilot scheme to provide £10 a week to parents of children under six in low-income households is encountering significant legal and practical obstacles, according to a legal expert.
The new Plaid Cymru-led Welsh government has proposed a trial offering £10 weekly payments for 15,000 children under six years old, targeting families already receiving Universal Credit.
However, concerns have been raised that these payments might be classified as regular income, potentially leading to deductions from existing benefits.
Professor Emyr Lewis from Aberystwyth University explained the complexities involved. While the Welsh government legally holds the power to implement such a scheme, it requires cooperation from the UK government to avoid unintended consequences.
"The Welsh government does have the power to do this, but it would need the cooperation of the UK government," said Prof Lewis.
The UK government has been contacted for comment on the matter.
Potential Impact on Benefits
Payments intended to support poor children, as promised by Plaid Cymru, could be offset if treated as income for benefits calculations. The Welsh government lacks authority over welfare benefits, which remain under UK government control.
"The Welsh government needed to be certain the money paid to parents 'would not be taxed nor taken into account in calculating any benefit cap or deductions from Universal Credit'," Prof Lewis stated.
He highlighted the substantial practical issues that must be resolved, including securing data sharing agreements with the Department for Work and Pensions (DWP) and Her Majesty’s Revenue and Customs (HMRC) to identify Universal Credit recipients and the duration of their claims.
Previous efforts illustrate these challenges. The former Welsh government’s basic income pilot for care leavers was treated as income by both HMRC and DWP, negating some of its intended benefits.
Similarly, despite having some welfare powers, Scotland has had to negotiate with the UK government before launching its own child payment scheme.
Welsh Government’s Response
Sioned Williams, Welsh government minister for social justice, confirmed that discussions with the UK government have commenced to address the interplay between benefits, taxation, and the proposed payment scheme, known as Cynnal.
"This is something that we will need to look at in detail and bring pressure to bear on the UK government to do the right thing," said Williams.
A Welsh government spokesperson emphasized the commitment to tackling child poverty.
"No child in Wales should grow up in poverty and the evidence shows direct financial support is one of the most effective ways to help," the spokesperson said.
Support from Charities and Foundations
Melanie Simmonds, head of Save the Children Cymru, welcomed the pilot scheme, noting the profound impact poverty has on children’s lives.
Steffan Evans of the Bevan Foundation described a Welsh child payment as a "powerful lever to address child poverty" and stressed the importance of UK government cooperation.
"It is vital that the UK government cooperates," Evans added.
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