The Benefit: A monthly (or occasionally more or less frequent) government cash payment to parents based on the presence and number of children in the family. The benefits are for the most part modest (less than 10 percent of average wages), but sometimes contribute a significant component of family income, especially for large families or low-income families. They are usually not included in taxable income. Currently 88 countries, worldwide, provide child or family allowances. Sometimes these allowances are integrated with or replaced by tax provisions, such as tax credits (see "Child and Family Tax Benefits" section).

Purpose: Child and family allowances have served diverse purposes over time in different countries. In a few countries, they were motivated by pro-natalist objectives, but that goal has largely disappeared now and there is no evidence that they were effective. Typically, family allowances have one or more of the following objectives:

• horizontal equity - the redistribution of income from childless households to families with children, in recognition of the heavier financial burden incurred
  by child-rearing.
• vertical equity or redistribution- supplementing the incomes of poor and modest income families with children as a means of reducing or preventing
  poverty.
• strengthening labor force attachments - in some countries, benefits are only available to families with children who have at least one parent in the
  work force, or higher benefit levels are offered to families attached to the labor force.
• social inclusion/exclusion - particularly as the European Union moves toward greater unity among its member states, family allowances are viewed as
  an instrument that can foster societal cohesion and progress.

History: They originated in the private sector late in the 19th century in response to (and as alternatives to) proposals to relate worker wages to family responsibilities. At various times (not currently) they were elaborated or sustained by pro-natalist objectives. They originally were available as an employment-based benefit only, and limited to families with at least one wage earner, but the connection has been severed in most places.

Eligibility Criteria: Child and family allowances may be universal, income-related, or depend of the employment status of the parents. In most countries, coverage with regard to the basic benefit is universal, though recent trends suggest that income-related benefits are growing, targeting benefits on families with children whose incomes are below a certain level. Some countries offer universal allowances and supplement these benefits with means-tested allowances for low-income, single-parent, or large families.

Several countries restrict benefits to working families, families with at least one employed parent, although this requirement has disappeared in most countries.

Countries have different residency requirements. Most countries offer benefits to all residents, regardless of their citizenship, however, several countries add the requirement that a resident parent be employed in the country. Some countries provide the benefit even when the children covered live in another country. Residency and citizenship requirements are becoming increasingly important issues as mobility grows within the European Union and benefits differ among the countries.

Benefit Levels: Child and family allowance benefit levels vary in different ways. Several countries provide a uniform rate per child, regardless of the number of children in the family while in other countries benefits increase with each additional child or are larger for later children (such as the 3rd, 4th or 5th child). In still others, such as the United Kingdom, the benefit is higher for the first child while in France, a family is only eligible for the allowance after the second child is born.

Age of children may also affect the benefit level. Many countries provide higher benefits for older children. Other countries provide higher or special benefit for families with very young children to make it possible for a parent to remain at home during a child's early years (until the child is age three, age one in Portugal). In Finland and Norway parents have the option of a subsidized place in child care or a cash benefit of equivalent value making it possible for a parent of a very young child (under 3) to stop working and provide care.

Benefit levels may also be reduced as income rises or by including the benefit in taxable income.

Most countries offer higher benefit levels or supplements for children with disabilities.

In some countries, benefit levels vary by geographic regions.

Duration: Coverage is generally extended to children from the time of birth to the age of majority or completion of formal education, provided other eligibility criteria are met. Many of the countries extend child benefits through the completion of a child's formal education or training, or provide benefits for unemployed youth. The maximum age limit an individual can qualify is 26 years, but disabled children may qualify regardless of age.

Funding usually is out of general revenue, but may include contributions by employers.

The detailed multi-country tables below draw upon each country's section in Social Security Programs Throughout the World (Washington, D.C.: Social Security Administration, 1999).

• Table 1.81: Legal governance, structure, financing and administration of family and child allowance programs

• Table 1.82: Family and Child Allowance Programs: Coverage, qualifying conditions, benefit levels and other related allowance

For an overvew of child and family allowances and tax benefits, see Issue Brief 4:

• Table 1: Child and Family Cash and Tax Benefits in Select Industrialized Countries

• Table 2: Child and Family Allowance Requirements and Variations

• Table 3: Recipient of Family Benefits According to Type of Benefit in Select Countries

References

Ann Gautier, The State and the Family: A Comparative Analysis of Family Policies in Industrial Countries (Oxford University Press, 1999, paperback).

Jonathan Bradshaw, John Ditch, Hilary Holmes and Peter Whiteford, Support for Children: a Comparison of Arrangements in Fifteen Countries, Department of Social Security, Research Report No. 21 (London: Her Majesty's Stationery Office, 1993).

Alfred J. Kahn and Sheila B. Kamerman, Social Policy and the Under-3s: Six Country Case Studies (New York: Cross National Studies Research Program, Columbia University School of Social Work, 1994).

Sheila B. Kamerman and Alfred J. Kahn, Starting Right (Oxford University Press, 1995), "Ch. 3, Toward Economic Security".

Herwig Immervoll, Holly Sutherland, Klaas de Vos, "Reducing Child Poverty in the European Union: the Role of Child Benefits, " in Koen Vleminckx and Timothy Sneeding, Child Well-Being, Child Poverty, and Child Policy in Modern Nations (Bristol, Eng.: Policy Press, 2000, forthcoming).

Susan Pederson, Family, Dependence, and the Origin of the Welfare State (New York: Cambridge University Press, 1993).

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