I think I'd probably be a fence sitter.
What is the government (or the "for argument") worried about? Who are they defending? Society? Tax Payers? The Children? The Parents? Love? Money? Time?
If there worried about time spent with kids well I can assure you- there's less of it when one is working.
Worried about amount of money per child? I think we can safely assume that not only does money NOT buy happiness but the net amount from working compared to welfare payments would come pretty close when you consider having 3 children or more (based on average family income).
There is only ever a limited amount of tax to distribute to welfare recipients- shouldn't this be distributed to the people of society that are contributing?
Than again, are we willing to punish the parents at the expense of the kids?
The problem is, its not a one size fits all problem, and thus there wont be a one size fits all solution. Sure, there are people bludging off the system, but than there are people really trying to give it a go. You make this blanket rule to combat a certain problem, but at the expense of Joe down the road that has been working his butt off the last couple of years and got made redundant while his wife is expecting number 4&5!