UK & World News

  • 6 January 2013, 10:09

Child Benefit Payment Cut-Off For Families

Child benefit payments to more than a million people are due to be cut from Monday, as part of the Government's plan to reduce spending.

If either parent earns 50,000 then payments are to be reduced on a sliding scale, with those on a salary of 60,000 or more losing it altogether.

Treasury minister David Gauke said it was a decision that had to be made to save the taxpayer as much as 1.5bn a year.

"Everybody has got to make a contribution, we're reducing benefits and we've made some cuts in benefits," he said.

"But it's right that those who are earning more than average, those who are in fact in the top 10-15% of earners, make that contribution."

As many as 300,000 of the 1.1 million who will see changes to their child benefit are yet to have received a letter from the Government informing them of the cuts.

HM Revenue and Customs (HMRC) has said it had been unable to contact everyone as it held incomplete data on some customers following changes to their income, relationship status, or address.

Child benefit is currently 20.30 a week for the first child and an additional 13.40 for each child after that.

For a family with two children and one parent earning more than 60,000 it means losing 1,752 per year.

But if both parents earn 49,000, the benefit will be unaffected.

Those expecting to lose payment have until the end of today to opt out of receiving the money by filling in a form on the HMRC website.

Otherwise they will continue to receive the handout and have to complete self-assessment forms to repay it in tax.

Mel Smith has two young children and does not work, but her husband's salary level means they will lose all of their child benefit.

"It doesn't seem fair when we only have one income," she said.

But while taking with one hand the Government is considering ways to give with the other.

It is thought new proposals may include allowing families to offset some of their childcare costs against their tax, making it easier for mothers like Mel to return to work.

"I would seriously consider going back to work full time if that were introduced," she said.

"It would be better for me to do full time really than part time but again you have to weigh up whether it works out as a family."

It is estimated that around one million women are missing from the workforce because of the price of childcare, which amounts to almost 27% of the average family income.

Advertisement