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It will be fully withdrawn where one parent earns above £60,000.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
    -4

    Comment number 360.

    Cameron does not know what the word fair means. He is just ton capable enough to run our country. He must be replaced now.

  • rate this
    +7

    Comment number 359.

    332 Simplelogic: your logic is oversimplified ;)

    £30k gross -> £22933 take home
    £50k gross -> £35781 take home.

    You have to remember the thresholds and the personal allowance!

  • rate this
    0

    Comment number 358.

    #305 "You want children - you pay - end of"
    You're a victim of the me-me-me-culture - end of.
    I can't be bothered to argue the economics one way or the other but it's worrying that the prevailing view is that children are commodities, a discretionary purchase. Proof that we've lost sight of our humanity and the concept of society and that we are consumed by capitalism and self.

  • rate this
    +2

    Comment number 357.

    Fairness is in the eye of the attacker! Last year, after 10 years of marriage, my son-in-law took his family on holiday for the first time ever. He has already told me that he won't be able to do it again. The holiday did more for the cheerfulness and relaxation of them all than anything else they have done. There is only one earner in the family as my daughter looks after the children.

  • rate this
    +3

    Comment number 356.

    In the case of the 100k earnings and child benefit, it is shocking that you require child benefit. However, this whole welfare attack is mad. People rely on working tax credits, reasons are simple. Massive tax on Fuel. Poorly regulated utility companies so price hikes. VAT at 20%, Poor wages, hikes in rail/bus fares etc The large rich/poor gap proves this, so tackle this aswell as welfare dave!

  • rate this
    +2

    Comment number 355.

    The Tories hate universal benefits, they want benefits to be something that people are patronised with. The idea of Universal benefits is everyone gets a benefit but the cost & advantage are nullified for the wealthy with higher taxes. Advantages: no stigma attached, no costly means testing, fewer opportunities for fraud, taxing it back from wealthy tends to be fairer than artificial ceilings

  • rate this
    -2

    Comment number 354.

    I hope this is a change that needs to occur in order for the Unified Credit scheme to be fair. Or is that out the window too. I wish the BBC wouldn't report on White Papers.

  • rate this
    +6

    Comment number 353.

    The official average wage in the UK is just above £25k. In theory anyone with a salary of £25k should need no benefits as he/she should be able to provide his kids with an average standard of living which should be fair as it is what this country can offer. Therefore the benefits should only be paid to those earning less than the average wage.

  • Comment number 352.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +6

    Comment number 351.

    @Fffrustrated

    'Why can't I adopt my wifes tax code to make things fairer?

    Because Harriet Harman and her sisters have spent thirty years burning their underwear to separate women financially from men. They see it as 'empowering' or something.

    This is the inevitable result.

    That and cheaper car insurance for men and reduced pension annuities for men.

  • rate this
    +5

    Comment number 350.

    The benefit is not obligatory

    Maybe those couples earning £49k each could opt out.

    We all expect our politicians and big businesses to have morals, it should be a 2 way street.

  • rate this
    +1

    Comment number 349.

    There should be tax breaks for children - like there used to be. These should be available to all but tapper off as income rises. I am not sure, but I think this is what the present system does in a roundabout way. The end result is that people with children get to keep more of their earned cash - the exchequer taking with one hand and giving it back with another.

  • rate this
    +1

    Comment number 348.

    Well it may be fair in concept but it hasn't been remotely implemented fairly.
    Let's also hope that his personal ambition is thwarted at the first available opportunity.

  • rate this
    +4

    Comment number 347.

    "He also confirmed he wanted to remain prime minister until 2020"

    Oh no, where is the nearest Russian Embassy?

  • rate this
    +5

    Comment number 346.

    You want children - you pay - end of. Its a
    lifestyle decision - dont expect the state to pick up the tab

    -You don't have kids you get old, you get sick, you starve, you die .

    Don't expect my children to pay your OAP or medical costs.

    It's a lifestyle choice!

    Now I don't really believe that unlike some of the ignorant posters here who think Child benefit covers the cost of having Children

  • rate this
    +3

    Comment number 345.

    If you have paid a stamp for years I feel you should get it But those coming into here and have paid nothing into the country should not get it until they have for a number of years and paid tax and stamp etc.

  • rate this
    +5

    Comment number 344.

    child benefit is unfair to the childless

  • rate this
    +2

    Comment number 343.

    Nick Watt (on Andrew Marr this morning) made the interesing point that, when this policy was first announced, the coalition thought that the econonmy would have improved sufficiently for it not to have to be implemented, allowing them to appear benign and successful in equal measure by cancelling it.....

  • rate this
    +141

    Comment number 342.

    People forget that child benefit was brought in to help families repopulate the country after a devastating war. Child benefit has no place at all in this day and age where we don't need to encourage anyone to have extra children! It should be scrapped immediately.

  • rate this
    +3

    Comment number 341.

    Simple family 98k still receive, family 60k will lose

    Taxation was always branded as fair so thats what needs to be done, as much as high earners should not receive the proposed systems is seriously flawed as shown above.

    Also any more than 3 children should also be stopped, children should not be used as a way to make additonal money which happens.

 

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