Distributional Effects of Monetary and In-kind Family Benefits

The distribution of family benefits largely reflects the frequency distribution of children across income groups and underlines the importance of universal (income-independent) benefits. Between 2010 and 2015 the relative income position of households with children deteriorated noticeably in relation to the total population – both before and after accounting for public monetary transfers. In 2015, the contribution of family benefits to the gross income of households with children amounted to 29 percent in the lowest tenth of gross household income. Between 2010 and 2015 the family benefits received by households as a share of their gross income fell markedly in the two lowest tenths. This effect results from the lower family allowance, tax credit and childcare allowance as measured in relation to income. In part, this development is attributed to the reform of the family allowance in 2011 as well as to the non-adjustment of these benefits to the price level for several years.