family allowance

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A UK welfare benefit paid to the parents or guardians of dependent children. The arguments for family allowances are a desire to avoid child poverty, and considerations of horizontal equity, as people with families have more demands on their incomes than childless people with the same income. Family allowances are contrasted with the use of tax credits as part of the direct tax system: family allowances are more egalitarian, as the poorest parents may lack sufficient income for tax credits to benefit them. Family allowances are a universal benefit; this contrasts with the US position, where Aid to Families with Dependent Children is a means-tested benefit targeted towards needier families.

Subjects: Economics.

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