Entrepreneur accused of preying on hard-up mums after attempting to launch business which will profit from their child benefit payments
Plan: Jason Highet (pictured) describes himself on Linkedin as a ‘dynamic and conscientious entrepreneur’
An entrepreneur has been accused of preying on hard-up mums after attempting to launch a business which will profit from their child benefit payments.
Jason Highet, who describes himself on Linkedin as a ‘dynamic and conscientious entrepreneur’, has been trying to raise £1.5million from investors to get his start-up, which he has called the Child Care Bank (CCB), off the ground.
His plan is to offer families all their future child benefit payments in one go – at a price. In return for the cash up-front, parents – mostly mothers – will then transfer their right to future benefit payments to CCB, via its app. It will take an 8 per cent cut.
The plans were revealed in a presentation to investors, seen by the Mail. MPs branded the idea ‘dreadful’ with Conservative Kevin Hollinrake saying: ‘This is potentially preying on the vulnerable – it’s tempting families who need to pay off debt to take a short-term option with long-term consequences.’
MPs also raised concerns that vulnerable women could be coerced into taking the lump sum by an abusive partner, and then forced to hand it over to him. It is understood that CCB will build features into its app which allow women to flag if they are being abused and to decline any child benefit claimants who are known to social services or their local authority, for example due to addiction issues or neglect.
However, it was unclear how these measures would work, and how robust they would be. Labour’s Yvonne Fovargue, who heads the all-party parliamentary group on debt, said: ‘This sounds dreadful. It’s basically just one step removed from a loan shark taking the child benefit book.’
Fovargue has written to Therese Coffey, work and pensions minister, about the app.
Highet revealed ambitious plans to borrow £39.2billion over the next three years to cover the lump sum payments. He claimed to be ‘in talks’ with major High Street banks, and thinks his idea could help struggling stay-home parents get back into work by giving them the money to cover childcare.
On his projections, CCB will pay out £35.9billion in lump sums over the next three years to around 7.2m families.
Child benefits are paid out a rate of £21.15 per week for the eldest and £14 for every subsequent child. For families where one parent earns over £50,000, the payments are taxed, and for anyone earning £60,000 all the benefit will be lost through tax.
But if both partners earn less than £50,000 and claim for their eldest child until the maximum age of 20, total benefit payments would add up to £21,996 at the current rate.
Highet declined to comment.
A spokesman for HMRC, said: ‘Entitlement to child benefit is dependent on a claim being made by a person who is responsible for a child. Only where a person is unable to act would another person be able to claim child benefit on their behalf.’