Child benefit should be subject to a tax charge, and the revenue made available to lift the overall value of the benefit, the Institute for Public Policy Research (IPPR) has argued.
With changes to the benefits system planned to be announced next week, child benefit has been touted as a likely candidate for reform.
Rather than introducing a universal cut or means testing, the IPPR, a leading think-tank, backed the case for increasing the benefit from £20.30 a week for the eldest child and £13.40 for subsequent children to a flat rate of £22.
For families earning over £37,400, the weekly benefit would be taxed at 40 per cent, reducing its value to £13.20 per child.
The money raised could then be used to pay for the higher benefit allocated to those who are less well off.
Carey Oppenheim, co-director of the IPPR, said: “The value of child benefit can be reduced for those on middle and higher incomes, but using some of the savings to boost the incomes of the poorest families could help to tackle our shameful levels of child poverty.”