Tens of thousands of children living in Eastern Europe will continue to receive child benefit despite the payment being stripped from middle-class families in this country.
The Coalition government’s decision to axe child benefit payments to over 1.2 million higher-rate tax earners has sparked a political backlash from professional families who stand to lose thousands of pounds a year. Their anger will be compounded by new figures, which show that the benefit is being used to support nearly 29,000 children living in Poland, along with thousands of children elsewhere in Eastern Europe.
Under EU rules, child benefit is paid to parents who work and pay tax in the UK and whose children have stayed in their home countries. The vast majority are likely to be lower-rate tax payers and will therefore carry on receiving the benefit once it is taken away from higher-rate earners in 2013 under Government plans announced last week.
Emma Boon, campaign manager of the Tax Payers Alliance said: “It is completely unfair that our taxpayers are expected to fund child benefits for children that do not live in this country.”
Figures released to Parliament last month show that child benefit is being paid to the UK-based parents of 28,760 children living in Poland.
The cost is estimated at £23.8 million. On top of that 2,051 children in Slovakia benefit from the payments, along with 1,012 in Lithuania, 295 in the Czech Republic and 113 in Bulgaria.
Payments are also made to parents of children living in western European countries such as France, Spain and Germany, though in much smaller numbers.
British people who live and work are similarly able to claim local child benefit even if their children live in Britain.
In total there are 41,296 children living in the EU’s members states whose parents receive child benefit in Britain, with 32,820 of these living in Eastern Europe. As the British handouts are much higher than those in eastern European country, where the cost of living is lower, the benefits are attractive to migrants. In some cases the overseas claimants receive the full UK rate of benefit – £20 a week for the first child and £13.20 for others. In other cases, they receive benefit from their homeland’s government plus a “top-up” payment from the UK government to raise the total to UK levels. In Poland, the equivalent of child benefit is around £5 a week or less.
The figures reveal the impact of European Union rules which allow migrant workers who pay taxes in their host country to claim benefits there, even if they have left their families behind.
Ms Boon added: “UK welfare is paid for and intended to benefit UK citizens, we simply cannot afford to pay benefits to the whole of Europe. Meddling EU judges shouldn’t be allowed to decide how UK taxpayers’ money is spent.”
While in opposition the Tories attacked the system. In October last year the then Conservative Treasury spokesman Phil Hammond said: “With Britain facing a debt crisis and the Government’s child poverty strategy in tatters, it beggars belief that Gordon Brown is continuing to send millions of pounds of taxpayers’ money to children who don’t even live in this country.”
However the party says it currently has no plans to tackle the issue of children who live abroad being in receipt of the benefit.
A Tory source said: “We’re not proposing to tackle this issue at the moment.”
Defenders of the system point out that East European migrants are contributing to the UK economy by paying taxes here and are therefore entitled to child benefit.
A spokesman for the Child Poverty action Group said: “The EU citizens this applies to are paying their taxes in Britain, so they are entitled to something in return for their contribution.
“In fact they get less back than other taxpayers because their children are not being educated here or being looked after by the NHS.
“If we denied them the rights and benefits other resident taxpayers get for their contribution, we would have no legitimate right to continue taxing each of them thousands of pounds.
“It works both ways too, so British people working abroad can claim similar benefits in the countries where they work and pay taxes.
“It’s not a good idea to take away the rights of British parents working overseas to support for their families back in the UK.”
The number of children in Poland receiving child benefit has fallen by nearly 10,000 from a high of 37,941 in October 2009, due mainly to the impact of the recession on the number of Polish migrants coming to Britain.
A spokesman for HM Revenue and Customs said the payments to foreigners accounted for a only “tiny fraction” of the 7.5 million total child benefit payments.
He added: “The purpose of these rules is to help guarantee rights of free movement for workers throughout the EEA.”