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Kjell Ingolf Ropstad and KrF have succeeded in increasing the child benefit. Olav Olsen
On Tuesday, one of KrF’s breakthroughs became a reality: the child benefit for children under seven years of age was increased. All families in the country with young children can enjoy an additional 300 NOK per month.
The child benefit was set at NOK 970 per month from 1996 to 2018, before the rate was raised in the last two years. For children under the age of seven, it is now NOK 1354.
It is good that all families with children have more to do, of course. But this money could have been spent more efficiently with another device.
In the case of child benefit, it is primarily important for some low-income families.
Therefore, the rate should have increased even more for them. On the other hand, families with good incomes could have received less.
This can be done by taxing the child benefit, which KrF had previously requested.
The income derived from allowing the child benefit to pass to the tax base could have been used to increase the rates. In this way, those who earn and tax little would receive more in child benefits than today, while those who earn and tax a lot would receive less than today.
This means that the child benefit is internally redistributed between families with children.
An even stronger redistribution could be obtained if one underwent a needs test. The scheme is more complicated to administer and can also weaken parents’ incentives to work. Middle-income families will receive a higher effective tax rate if they work a little longer, as the child benefit is reduced accordingly.
The structure of the child benefit should not be considered in isolation from other transfers to families with children. It is a matter of principle whether social benefits should be offered as services or as money, and there are many good reasons to prefer the former. While child benefit was stagnant between 1996 and 2018, daycare and extracurricular services were increasingly subsidized. The Families with Children Committee in 2017 proposed to strengthen this development by making child care free. This can be financed with proof of income from the child benefit.
Today, the role of child benefits should be first and foremost to improve the living conditions of children growing up in low-income families. Both the taxes, the means test and the lowering of daycare prices are a better use of public funds than simply increasing the flat rate by 300 NOK for all families with young children.
