We’re tackling unfairness in Child Benefit
The way Child Benefit is treated in this country is unfair.
Yesterday, we set out plans to end that unfairness.
First, we are raising the threshold at which families start to pay the HICBC [High-Income Child Benefit Charge].
At present anyone earning over £50,000 starts to pay the HICBC.
So, from April this year, no one earning under £60,000 will pay the HICBC, meaning nearly half a million families with children will gain around £1,300 next year.
And for people earning between £60,000 and £80,000, the rate will halve to 1% of every £200, meaning Child Benefit is fully withdrawn when income reaches £80,000.
This taper rate will help even relatively well off families.
We’re totally committed to supporting parents with the cost of raising their children.
Second, we are ending the unfairness of single-earner families being treated the same as double-earner families. We will remove this by moving to a household system.
It isn’t right that two parents earning £49,000 a year – a total of £98,000 for that family – receive full Child Benefit whereas a household with a single earner on just £50,000 starts losing their Child Benefit.
So we’ll end this unfairness.
Third, our tax cuts will support families.
So they aren’t forced to choose between either going to work or staying at home to look after their children.
For a typical family with two children:
- where the higher earner gets £55,000 a year – they’ll gain about £1,109
- where the higher earner gets £65,000 a year – they’ll gain about £1,664
- where the higher earner gets £75,000 a year – they’ll gain about £555
By taking the difficult long-term decisions necessary to grow the economy and reduce inflation from 11% to 4%, we’ve been able to cut taxes for millions of families.
The alternative is back to square one with Labour – who can’t say how they’d help parents because they don’t have a plan.