Child benefit change is right approach, David Cameron says

 

David Cameron: "This will raise £2 billion a year"

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David Cameron has said the decision to remove child benefit from better-off families is "the right approach".

He told BBC One's Andrew Marr Show "85% of families" would get the payments in "exactly the way they do now".

The prime minister also said the government was "absolutely right" to limit most working age benefits to a 1% rise, which will be the subject of a Commons vote on Tuesday.

Labour's Ed Balls called the child benefit changes "perverse".

Mr Cameron's comments come ahead of the coalition's mid-term review on Monday.

Changes coming into effect from Monday will see families with one parent earning more than £50,000 lose part of their child benefit.

It will be fully withdrawn where one parent earns above £60,000.

'Fundamentally fair'

Analysis

If you or your partner get child benefit and either of you has an income of above £50,000 a year you may have to pay more tax from Monday.

The income that counts is confusingly called 'net-adjusted income'. In fact, it is your gross income before tax from all sources but minus pension contributions, child care vouchers, and gift aid donations.

If you live as a couple it is the higher income that is counted not your joint income.

If that income is more than £50,000, the person who earns it will have to pay a new tax called 'high income child benefit charge'. It will be collected through self-assessment and you must register with HMRC by 7 October.

If that income is £50,000 to £60,000, the charge will be less than the child benefit received on a sliding scale - at £55,000 it will be 50% of the child benefit received.

If that income is £60,000 or more, the charge will equal the child benefit received. In other words, one partner will get the child benefit but the higher earning partner will pay it all back in the new tax.

Q&A: Child benefit changes

Defending the policy, Mr Cameron said: "I'm not saying those people are rich, but I think it is right that they make a contribution.

"This will raise £2bn a year. If we don't raise that £2bn from that group of people - the better off 15% in the country - we would have to find someone else to take it from."

He added: "I think people see it as fundamentally fair that if there is someone in the household earning over £60,000 you don't get child benefit... I think it is the right approach."

Asked about government plans to cap working age benefits at 1% - including the rise in the pay of public sector workers, out-of-work benefits, and tax credits - Mr Cameron said "those are all in my view absolutely right decisions".

"We need to control public sector pay... we need to limit the growth of welfare payments overall - and that must include the tax credit system, and for those out of work it's right that their incomes aren't going up faster than people in work."

The prime minister also insisted the government was going "full steam ahead" with a packed agenda in the second half of its term.

In the wide-ranging interview, Mr Cameron made a number of major points, including:

  • He promised British voters they would be offered a "real choice" on Europe at the next election
  • On the economy, he said it was vital for a country to be able to pay its debts - maintaining "a low rate of interest" so it could borrow money cheaply
  • He said he was "absolutely determined" to overhaul the deportation system so the radical cleric Abu Qatada and others could be deported from the UK before they appeal
  • The prime minister also said he was "absolutely clear" Britain would defend the Falkland Islands in the face of mounting pressure from Argentina
  • He also confirmed he wanted to remain prime minister until 2020
'No pleasure'

Writing in the Mail on Sunday, Chancellor George Osborne said he took "no great pleasure" in reducing people's benefits but that it was needed to ensure a "brighter future".

Labour's Ed Balls says that the government should tax the richest people

Conservative Party chairman Grant Shapps told the BBC's World at One: "I have three children I've filled in the form. I totally understand and get how frustrating these things are."

Mr Balls, Labour's shadow chancellor, told Sky News the changes to child benefits were "perverse".

"It's a complete shambles," he said.

"We're going to have many many hundreds of thousands of people who will end end up filing in tax returns because they didn't realise they were supposed to apply by today not to get the child benefit.

"I've always supported a principled approach to the welfare state which we would call progressive universalism."

 

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  • rate this
    +1

    Comment number 40.

    Credit to David Cameron for keeping his face straight whilst playing Robin Hood.

    He should consider panto.

    'Hey children! Have you seen that wicked Mr Gove?'

    'Behind you!'

  • rate this
    +1

    Comment number 39.

    When you and your entire cabinet are millionaires of course it's the right decision.

    It's high time the decision makers of this country had their cloth cut

  • rate this
    +145

    Comment number 38.

    Angela Epstein has joint income of well over 100k and says she needs child benefit (it's for the kids dear).
    Has the world gone mad?
    Is she just plain selfish and greedy?

  • rate this
    +2

    Comment number 37.

    Why is everything else worked out on household income? Is this to protect businessmen who put their wives on the payrole for tax purposes? It stinks.

  • rate this
    +4

    Comment number 36.

    The theory is sound, but the implementation of it is ludicrous.

    Why have child benefit at all? why not have one simple benefit that is paid according to need and factors in the number of dependant children??

    It makes me smile how the middle classes whine about benefit claimants', but quite happily collect child benefits that they don't really need to put into savings accounts.

  • rate this
    +2

    Comment number 35.

    What another fine mess, Laurel and Hardy would be proud of this Coalition, it is not fair and it is going to create absolute mayhem in the HMRC, they are reducing staff whilst the burden of Tax Returns on SA will increase, this attack on the Benefit system in the end will create divisions in all areas of society, another Omnishambles from this incompetent Coalition!

  • rate this
    +93

    Comment number 34.

    I used to earn 40k a year and I found life very easy at that.

    IF YOU NEED HANDOUTS EARNING 50K YOU ARE DOING IT WRONG.

  • rate this
    -1

    Comment number 33.

    The middle classes are hit to pay for government spending which is still out of control.

    Public sector employment has fallen but the total public sector pay bill has risen. Attempts to reform housing benefit & tax credits have been ineffective. The government seems incapable of cutting spending or to stop tax avoidance by the rich & big business

    So a Conservative Gov't tax the middle class !!!

  • rate this
    -1

    Comment number 32.

    If they are not to get it then should not have to contribute to it,that would be FAIR and stop the argument that they have con tributed to it and are entitled to it.

  • rate this
    +2

    Comment number 31.

    "Child benefit change is right approach, David Cameron says".

    But not as right as withdrawing benefit paid to immigrants on their families living in Poland.

  • rate this
    +1

    Comment number 30.

    There is clearly some unfairness in the withdrawal of child benefit - but the underlying principle is surely sound. Too make it 100% fair would cost more than it would save. Eventually we need to move towards higher salaries and away from benefits.

  • rate this
    +101

    Comment number 29.

    Just as important as taking away benefits for those who do not need them, is reducing the benefits on those who choose to breed like proverbial rabbits, further overpopulating an overpopulated island, and indeed planet.

    Limiting child benefit to 2 children, not retrospectively of course, would be another sinsible policy to adopt.

  • rate this
    +3

    Comment number 28.

    no problem at all with the spirit of it but the two people earning 49k versus one earning 61k issue is just plain thick and totally at odds with a party that supposedly promotes the benefits of the stay at home parent

    the tories will lose a lot of support over this no doubt about it and they deserve to

  • rate this
    +2

    Comment number 27.

    Botched again! They should have announced no changes for those receiving the benefit now but restricted it to the first 2 children only in a year's time, allowing for the people expecting children between now and then. We don't need a larger population and we don't want benefit dependancy.

  • rate this
    0

    Comment number 26.

    Work hard and we'll punish you is the constant message from the Government. Those earning over £50,000 p.a. already pay the bulk of income tax so there's no reason why they shouldn't get back the same as those paying vastly less tax.

  • rate this
    +63

    Comment number 25.

    I just wish I could understand why a benefit family in my road can afford 2 cars, wall mounted LCD tvs, foreign holidays and use of their central heating 24/7. We are an OAP household and can only afford the central heating twice a day. As we have never claimed a penny from the State, can someone please explain to me how someone who has contributed nothing can afford to live better than me?

  • rate this
    0

    Comment number 24.

    Do I understand this correctly - child benefit is to be income-related, not child-related? It becomes inverse income benefit. Is this what we want?

  • rate this
    +2

    Comment number 23.

    A welcome change. Most young people are worried about getting and keeping jobs to support just themselves... let alone children. It's not fair that people are getting hand outs for reproducing, especially when they earn a decent income already. Young people are supposed to be the "future" of this country. Doesn't feel that way.

  • rate this
    +22

    Comment number 22.

    Whether the ins and outs of fairness certainly are debatable, but it just seems like it will cost more money to manage than if things had been left alone.

    This seems like a cut that will in fact cost more to manage than will be brought saved.

  • rate this
    -1

    Comment number 21.

    fancy claiming benefit whilst on good money. what do people think cb is? a prize for having a kid? i have zero sympathy

 

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