Login Register

Child benefit cuts – explained

By Gloucestershire Echo  |  Posted: January 08, 2013

Comments (0)

CHILD benefit was cut for thousands of households yesterday – and here we explain the changes that the Government has made.

Changes to the rules will reduce the entitlement of about 1.2 million families.

Families where one parent is earning more than £50,000 a year will no longer be able to claim the total amount of child benefit.

It is expected that couples disclose to each other whether they claim child benefit or earn above £50,000 a year.

What are the changes?

THE plan is to steadily withdraw child benefit from families where one parent earns more than £50,000.

The benefit received will be recouped gradually as the income of the highest earning parent rises above £50,000, with the child benefit being taken away completely once their income is £60,000 or more.

How will it affect different families?

One income of less than £50,000: This family keeps the full child benefit, which for two children is £1,752 a year.

One income of more than £50,000: Can keep some benefit but must repay one per cent per £100 earned over £50,000. For someone earning £54,000, for example, the charge is £700.

Two incomes, both less than £50,000 each: Although the couple's joint income is over £50,000 they keep all their child benefit as neither one earns over the threshold.

Two incomes, one more than £60,000: Because one partner earns over £60,000 they must either stop claiming or repay the full £1,752 through a tax charge.

How will the Government get the money back from a family with one high earner?

If one of the parents earns more than £60,000, they can choose to stop claiming, or persuade their partner to do so.

If they continue to claim, the higher earner will have to admit this in a self-assessment tax form.

Then, HMRC will tax the high earner on the child benefit which they claim.

Read more from Gloucestershire Echo

Do you have something to say? Leave your comment here...

max 4000 characters
  • Shireresident  |  January 08 2013, 4:35PM

    Taken to its' logical conclusion then pensioners who can't manage on their pittance should all be euthanased. This country isn't just an account sheet you know, it's about people having the opportunity to have decent productive lives. There really is such a thing as society, even cameron admits that. It's sad that we seem to have lost sight of fundamental values somewhere.

    |   1
  • SG1970  |  January 08 2013, 2:07PM

    I don't understand why we pay child benefit in the first place. If you can't afford to feed them, don't breed them!

    |   -3
  • Shireresident  |  January 08 2013, 12:41PM

    Saw Cameron on the Andrew Marr show explaining this the other day. He said that yes this would affect people who were NOT particularly well off when referring to the top 15% of earners affected. Well to my way of thinking if the top 15% aren't particularly well off where does that leave the rest of us Mr. don't know the price of a pint of milk? The cheek of the man apologising for hitting the wealthy whilst the greatest impact by far will be felt by hard working families whose benefits have been capped at 1%

    |   1