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It will be fully withdrawn where one parent earns above £60,000.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
    +2

    Comment number 480.

    again normal people have to take a hit in the pocket if it is ok to take money off people to help raise this needed £2 billion pound then why shoudn't MP's help out to and stop claiming the £4 million plus each month in expenses. why should we as a people keep paying MP's to have sky in their 2nd homes that we pay for or to pay their utilities bills petrol etc. they should look at themselves 1st

  • rate this
    +1

    Comment number 479.

    The Torys have made another blunder but rather than admitting it they will just plow on regardless of the quiescence to the people effected. Even those Torys who voted for it don't know how it works. SHEEP.

  • rate this
    -48

    Comment number 478.

    Why is the BBC so anti-family?

    Strong pro-homosexual leanings.
    Picking out comments that advocate people not having children.
    Encouraging immigration.
    Anti-church.
    Pro-choice.

    Children are the most important thing to any society. They are its future. It is unpatriotic to ... oh, now I see.

    The BBC is a friend of the state but an enemy of its people.

  • rate this
    +2

    Comment number 477.

    I really don't understand the amount of misunderstanding here. I have a disabled child. Did plan for the child, didn't plan for him to be disabled. By extension my wife has to stay at home. If she could work and took a part time job at minimum wage and I took a £3K pay cut we'd be better off and still receive full CB. I don't see how that is fair, what it achieves or how it makes sense.

  • rate this
    +1

    Comment number 476.

    I think the reason behind the apparently unfair discrimination between single-earner and double-earner families is that the double-earner families need to pay nannies. I don't necessarily agree that this is fair, though.

    If it was upto me, I would scrap the whole CB scheme. I would use the money in improving education and free school meals instead of giving cash to parents.

  • rate this
    +6

    Comment number 475.

    Yet another example of how insanely complex the politicians have made our tax and benefits system. Endless meddling, pandering to vested interests and attempts at social engineering has resulted in an incomprehensible system full of contradictions, loopholes and unintended consequences which costs a fortune to administer.

    It would be easier to start again. Radical reform is needed now.

  • rate this
    +4

    Comment number 474.

    Big Society? My wife does voluntary work at a school as a parent helper that will now stop. She will have to get a job as a shelf stacker etc as I earn just over the threshold and she earns nothing but does the work with children FOC. No child benefit means one less contributor to Mr. Cameron's much vaunted "Big Society".

  • rate this
    0

    Comment number 473.

    @465: I understand the need to keep birth rate at a certain, what I don't support is that this (and other) policies mean the wrong types of people are reproducing, resulting in a net weakening of the gene pool.

    How many dunces in council estates are knocking out kids for extra tax credits while intelligent/professional couples can't afford to because of tax burdens?

  • rate this
    +2

    Comment number 472.

    For many lone parents on low incomes child benefit does make a BIG difference and its only right that people on high incomes of £50K + who obviously don't depend on child benefit payments to supplement their already inflated incomes should not receive it. This will free much needed funds to help others in need of assistance. Cameron is right for once.

  • rate this
    0

    Comment number 471.

    its clear from the comments here that people in receipt of child benefit are not demonised in the same way as most other benefit claimants & that's no use to Cameron hence the change. He wants to be able to say this is something we rich people give to you poor scroungers so you'd better be grateful & tug your forelocks

  • rate this
    +2

    Comment number 470.

    446. guitarman08
    JUST NOW
    The country is over populated because of those who are here and shouldn't be, and breeding like rabbits. That's why everything in this country is under strain we are over populated with everyone elsess refugees. I Suppose this comment wont be populer with the politically correct, but its a fact.

    AND WHY IS THAT THEN? TO ANSWER MY OWN QUESTION ; IN A WORD "ECOnomics"!

  • rate this
    -1

    Comment number 469.

    Why, in a thread about CB, are people STILL moaning about the banks? Do you moaners actually know what will happen to the world economy if one bank really collapses??? You won't have ANY social benefits. Grow up. Read. Learn about fiscal economics before you whine on and on. Labour copied up to the banks as much if not more than the Tories. You seem to forget that.

  • rate this
    +2

    Comment number 468.

    I would like to add that I think that the majority of people claiming benefits in this country are in fact working people who`s incomes do not cover the cost of living regardless of what a `living wage` should be. Most corps pay such poor wages people have to apply for various top up benefits. This move may well damage many of these families standard of living. This has nothing to do with shirkers

  • rate this
    +2

    Comment number 467.

    New Bank of England boss Mark Carney to be paid £874,000 a year
    Generous £250,000 housing allowance comes on top of £480,000 salary and £144,000 worth of pension contributions. Looks like the lad will miss out on his Child Benefit though :-) Now that's what I call fair.

  • rate this
    +2

    Comment number 466.

    447.benbowlane
    Just now
    @425.
    Couldn't agree more.

    @436.
    Well the country had to put up with Brown for two years. Who elected him.
    ============
    His constituents.

    Next question.

  • rate this
    +4

    Comment number 465.

    388. Boro Jonesy
    Investing in children contributes to society - supporting that is a legitimate application of central taxation. If everyone adopted your advice & only the rich reproduced they would have to be forced to breed at a certain rate to maintain a population to service you in your old age.

  • rate this
    +1

    Comment number 464.

    402 benbowlane

    We help with the cost of bringing up children because those children when adults will pay the taxes to keep us in pensions and health care.

    We don’t remove NHS provision from people who have no children once they retire and stop paying National Insurance, its other peoples children who fund the NHS then.

    @428 My point is that they are net payers of tax. Dont forget 20%VAT.

  • rate this
    -4

    Comment number 463.

    Child benefit is for what it says, the benefit of the child. The receiving of this should be based on disposable income.This takes into account all the other expenditure a family may have, which will vary hugely from family to family. In some instances, kids will lose out here because in todays world of expensive fuel, fares and when inertest rates rise,as they will, £50k is not that much.

  • rate this
    +2

    Comment number 462.

    #426 DisgustedTW
    What a good idea -- I strongly support your suggestion because it would ensure children receive the benefit and it would help low-paid families enormously. Presumably when you say "all children" you mean children being educated in state-funded schools and not in the private sector?

  • rate this
    +3

    Comment number 461.

    203.

    "No-one ever mentions the hardworking singletons. There are those of us who have no children, make no demands on the state and have provided for retirement."

    I take it that whoever provides your care (e.g medical and nursing) will also be retired and elderly - not younger people who had the audacity to be born.

 

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