Chancellor Gordon Brown is to abolish child benefit for the over-16s, which is paid to some 700,000 families. The money raised will be given to low-income families if their children remain in education after GCSEs. Middle income families with children studying for A-levels will lose£15.75 per week for the oldest child and a further£10.75 for each younger child who stays on.
The money saved will be used to fund new educational maintenance allowances, which will be paid directly to teenagers from families whose annual income is less than£30,000.
Mr Brown has given the go-ahead for the national expansion of the means-tested EMA pilot schemes, which minsters hope will encourage poorer children to stay in education. The means-testing of the new allowances means, however, that families receiving post-16 child benefit will be worse off if they earn more than about£24,000 - less than the national average income of£26,500.
From next year teenagers from low-income families will be entitled to between£5 and£40 a week to study for A-levels or other qualifications. The maximum award will be paid only to households on£13,000 or less.