In a letter to President Tusk, Prime Minister Cameron called for an end to “the practice of sending child benefits overseas”. This proposal is part of the migration “basket” of the UK’s renegotiation of the terms of its EU membership. This basket also includes attempts to curb in-work benefits and housing allowances for EU migrants residing in the UK. While UK national laws do not allow for benefits to be paid to UK residents’ children living abroad, a 2004 EC Regulation requires that member states pay “family benefits” with regard to children residing in another member state. Family benefits in the UK include child benefit, child tax credit and guardian allowance.
In 2013, 7.5 million families in the UK were paid child benefit for 13.1 million children, amounting to £11.5 billion in expenditure. Out of this, as of December 2013, 20,288 families were receiving child benefit for 34,052 children living outside the UK in another EU member state. Both figures show a falling trend from 2009 to 2013. In terms of child tax credits, 4.1 million families in the UK received payments in 2012. Out of this total, 3,447 families received tax credits for 5,962 children resident in another EU member state.
Polish citizens represent 64.9 percent of all families receiving child benefit for children living elsewhere in the EU followed by Ireland, 6 percent, and Lithuania, 5.9 percent. If the UK proposal passes, it would mean limiting child benefits so that they are paid at rates corresponding to “the living standards of the member state where the child resides”. Weekly child benefit in the UK amounts to £20.70 for the eldest or only child, with a further £ 13.70 per week per additional child. Meanwhile, in Poland, the monthly child allowance ranges from £14-21 per child. Ireland pays £109 per month per child, while approximately £29 is paid per month in Lithuania as child allowance.
Studies on the fiscal impact of migrants in the UK, and the fiscal impact of child benefits for children abroad in particular, are quite limited and reveal diverging results. However, if the statistics referenced by the House of Commons are to be trusted, 0.26 percent of total UK child benefit claims are paid to EU migrants whose children live in another EU member state and 0.09 percent of all child tax credits are claimed by families with children residing in another EU member state. Whether this money is spent in the UK or sent abroad to help care for those children is unknown, so the actual net fiscal impact of these family benefit claims (and any reduction thereof) is difficult to estimate.