Child Benefit calculator - find out how much more you will be paid after rule change
manchestereveningnews.co.ukThousands of families could receive a financial boost following a Child Benefit policy change. Chancellor Jeremy Hunt announced reforms this week that directly affect households with parents who earn between £50,000 and £80,000 a year.
Currently, child benefit is only paid in full to households where no parent earns over £50,000. Once either parent starts to earn over this amount, they have to pay the high income tax charge, which amounts to 1 per cent of the Child Benefit for every £100 of income earned above £50,000 a year. Read more: How much HMRC Child Benefit rises in April as rule change means thousands more parents eligible That means once the highest salary in your household goes over £60,000 a year you are required to repay all of the Child Benefit as a tax charge, usually through a self-assessment in the January after the end of the tax year.
The high income tax charge has been criticised as unfair because a couple who both earn £49,000 (a joint income of £98,000) keep the full amount of Child Benefit, while a single parent household earning £60,000 receives nothing after paying back the tax charge.
Under the new plans announced by the chancellor on Wednesday, the threshold will be raised from £50,000 to £60,000. That means any household where the highest earner is paid less than £60,000 will receive the full amount of Child Benefit.
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