UK & World News
Child Benefit: Parents On £50k Face Cutbacks
The Tax Office is to send letters to one million households this week warning parents they may lose child benefit payments.
The move comes after the Government decided homes where at least one parent earns over £50,000 should have the benefit either stopped or reduced.
Letters are due to start being sent from HM Revenue and Customs from today onwards, and the policy is expected to save the Treasury £1.7bn a year.
From January next year, families in which one parent earns more than £60,000 a year will lose all their benefit, which is currently £20.30 a week for the first child and £13.40 for each child after that.
Families where one parent earns between £50,000 and £60,000 will have the benefit reduced on a sliding scale.
The change will cost families with three children and at least one parent earning over £60,000 about £2,450 a year.
However it will produce anomalies, as two-earner households where both parents earn £49,000 will keep all their benefit, while neighbours who have one parent on £60,000 and the other staying at home will lose all of theirs.
The move comes amid warnings from Conservative backbenchers of a backlash from traditional Tory voters.
But an overwhelming majority of voters support Government plans to cut child benefit for high-earning families, according to private polling commissioned by the Conservative Party.
The poll found 82% backing for the move, which will hit the top 15% of earners on £50,000 or more and end the principle of universal entitlement to child benefit.
Conservative Party strategists believe the poll shows the move is one of their most popular policies.
It is seen as a signal to voters that Chancellor George Osborne is making good on his promise to ensure that those with the broadest shoulders take their share of the burden of reducing the deficit.
Tories challenged Labour to say whether they would restore child benefit to top earners, and if so how they would fund it.
Despite this, pollsters Populus found strong support for the change from all income groups, with an overall 82% backing the plan, against 13% who opposed it.
There was strong opposition to raising the £1.7bn from other potential sources.
Some 75% of those questioned said tax increases would be a worse option, 79% said cuts to welfare for low-income families would be worse, 79% said the same about cuts to public service spending and 80% about more state borrowing.
Responding to the Conservative poll, a Treasury spokesman said: "In a period when the Government is having to reduce welfare spending, it is very difficult to justify continuing to pay for the child benefit of the wealthiest 15% of families in society.
"The unprecedented scale of the deficit has meant that the Government has had to make tough choices to reduce public spending; but we have always been clear that those with the broadest shoulders should carry the greatest burden.
"Eighty-five percent of all families with children are unaffected and will continue to receive child benefit in full, 90% will benefit in full or in part.
"HM Revenue & Customs will write to people with income over £50,000 who live at an address where child benefit is received to explain how their family is likely to be affected."
what do you think?
Stop giving foreigners the benefit to send back home. That might save us some money
Krafty. You wouldn't believe how much we are paying for kids who live abroad because the worker in the family works in the UK and makes us the competant authority.
I can't say where I work but I see the amounts of money that leaves this country and it makes me sick
Windows Live User
Dave, I really wish we had that figure to hand. I guess it will be a very large sum
It should be paid for one child only - if you can't afford them don't have them! It's called 'family planning'!
Windows Live User
Paid 1 child only -- Then I guess the indigenous population of Britain will fall quickly and will need constant boosts from immigration to maintain a level
It should be done away with altogether. The poorest in society who need the extra money can have their income support increased by a similar amount to compensate. Universal benefits are a waste of money which give money to people who quite frankly don't really need it.
Windows Live User
Hmph, We must stay in power at all costs ---- The move comes amid warnings from Conservative backbenchers of a backlash from traditional Tory voters. ---------- Would be the same if it was Labour making the changes of course, but isn't it poor that backbenchers look first to see who they will upset before they look to see if it is correct for the country
Hi Dave, The only problem in scrapping universal benifits is where do you draw the line for qualification. My take home is around £200 pw and the winter fuel allowance is a lifesaver for me. As we know polititions have no idea on the cost of living so, left to them,the earnings limit would be proberly be set around the State Pension level pushing thousands into fuel poverty. We know the rich and those living abroad dont need it but its a difficult call to find a fairer way
Politically they daren't get rid of it even though in the process they have made it incredibly complicated. The reality is that it now "shadows" child tax credit. It is no longer a universal benefit. Indeed it would simplify things no end to abolish child benefit but increase CTC to compensate. It then becomes a means tested benefit like CTC.
If only ONE parent is commanding £50K then presumably benefit is not required. It is worth noting that people are actually starving in this country and perhaps this money could be better distributed.
From April next year a pensioner retiring on £12,500 a year will pay £5 per week extra tax on this very modest income so clawing something back from earners on over £50,000 a year would seem fair. However- if the multinationals were forced to pay their fair share of taxes instead of using the endless tax avoidance scams to pay very little or even no tax then no cuts would be needed at either end of ordinary folks earnings scale.
All these people will never vote Conservative again. Cameron and Osborne are destroying this party and at the 2015 election they could lose 90% of their seats.
Jonathan Goodwin-Self :- You are probably quite correct, and that statement will please the mounds of Labour non-workers that appear on here every day. Just one thing - Will one of these Labour supporters - Just one, give us all a PROMISE that Labour will reverse all the cuts and increase the benefits again. I'll bet you they leave things just as they are. Any increases in benefits will be seen as buying votes.
Don't be daft Peter, we have an effective one party state, the Con/Lab/Lib party that serve the needs of the rich and throw crumbs at the rest, indeed under the last tenure of New Labour the wealth of the richest rose by 33%, very left wing I don't think.
Windows Live User
Milliband has already stated that if in power then labour would have had to make cuts too so no chance of reversing all the cuts. However I do think Labours austerity plans would have been aimed at a different sector than the Tories have aimed theirs at.
Its a completely unfair change. If its capped based on household income then fair enough. But to change it so that a household bringing in 60k paying 40% tax and using only 1 tax allowance doesnt get any child benefit, but a family bringing in 80k between 2 people and still get the benefit is appalling.
And obviously the vast majority of voters are going to agree with the change......thats because 90% of claimants will be unaffected. They are bound to agree to it.
to be fair people earning that sort of money don't need child benefit. but if the govt spent their time trying to reduce the amount of money they give to foreigners that would be much more productive.
Isn't it so lucky for the present government that most of the electorate are incapable of thinking!