Treasury Minister Alan Maclean says that ministers are considering phasing out the higher child allowance, which reduces income tax for families with children who are at university or some other types of tertiary education, such as foundation courses or nurse training.
His comments come in response to a Scrutiny report published earlier this year which heavily criticised Jersey’s student finance programme. The report, which was published by the Education and Home Affairs Scrutiny panel, says that if the break was scrapped, the additional tax revenue earned – which is estimated to be £3.5 million – could be directly spent on financial assistance for students.
The report adds that the higher child allowance was ‘poorly targeted’ because it only benefits families which pay income tax.
Currently, the break provides an additional tax allowance of £6,000 for families on the standard rate (highest band) of income tax and £9,000 to those on the marginal rate (lower band).
Treasury Minister Alan Maclean says that he already considered scrapping the allowance.
He said ministers ‘agree in principle’ with phasing out the higher child allowance for both marginal and standard rate taxpayers but only once a ‘broader solution’ for higher education funding is found.
