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."