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It will be fully withdrawn where one parent earns above £60,000.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 540.

    @514 Excellent clive. Should we also have a little red book under our pillows, and all be paid precisely the same wage and eat the same foods? Should we restrict our car usage to 20 mins a day, and sing the national anthem at 9 am every morning and punish those who do not obey with a life sentance? Please. Large families are generally a rarity these days. we do not need to govern this as in China.

  • rate this
    +4

    Comment number 539.

    A radical solution would be to do away with child benefit ,tax credits and simply raise the tax threshold to £12,000 a year everybody would gain but the effect on the low paid would have a big effect. Plus no need for a bureaucracy to admin it.
    Someone on £60000 a year is still damm lucky and should not be whinging I earn alot less than that a year and get diddly squat from the state.

  • rate this
    +3

    Comment number 538.

    No.227. How insulting is your remark when families have to survive on less than £15k pa between them? All people like you are bothered about is missing out on free money. Disgusting. Scrap all universal benefits and pay out to the elderley and young families who need it.

  • rate this
    +1

    Comment number 537.

    There will, no doubt, remain a debate on whether CB should be payable to all or just those on lower incomes. I believe whatever changes must always be fair and proper to stand a chance of being universally accepted. How could anyone claim it to be 'fair' if a family with a combined income of £99k gets full CB but with a single earner on £60k gets nothing? This situation is beyond belief!

  • rate this
    0

    Comment number 536.

    Obviously there's a gap between what this benefit was intended for decades ago and how it works (or fails to) right now. If this society is really worried about the children, then use taxes to provide better, free services for the children - free access to nurseries and kindergartens including meals, toys and clothes. If not, better call it what it is: Irresponsible Parent Benefit.

  • rate this
    +2

    Comment number 535.

    I would like to see child benefit scrapped completely or limited to a maximum of 2 children.

  • rate this
    +6

    Comment number 534.

    I have a relative who has SEVEN children, neither he or his wife work and they have a ridiculously large house that they live in. And the house is in a great area of our town (not a council estate) where house prices are probably at their highest. All of which is paid for by the government. They have better things than me and enjoy plenty more holidays than me. The system is broken.

  • rate this
    -3

    Comment number 533.

    If Cameron really thinks that a wage of £50k in London makes you "better off" then he needs a reality check. People on incomes between £50k and £100k a year are the hardest hit yet again...

  • rate this
    -3

    Comment number 532.

    Ok for Dave to say cutting CB is the right thing to do, he can just put in another expense claim to cover his losses.

  • rate this
    +2

    Comment number 531.

    You have to laugh at the comments from some of those with children; as if it's their god given right to have money given to them "Because they are doing the country and its people a favour by having kids"
    Oh please!

  • rate this
    +4

    Comment number 530.

    His policy's are too soft, if a house hold earns more than 40k it should be cut, 40k is more than enough. Personally if I had my way child benefit would be axed all together and instead look at ways of reducing the cost of living. Public owned nuclear power stations to reduce household bills, petrol tax reductions, basically if you can't afford children you shouldn't have them

  • rate this
    +1

    Comment number 529.

    As usual it the poorly thought through logic rather than the concept, it's ok to have 8 children if you avoid working, but if you work hard to succeed, earn a decent living, you are penalised! Doesn't take into account child care costs or other expenses

  • rate this
    0

    Comment number 528.

    #495 If you cannot afford children then you shouldn't have them

    Are you advocating a genocide of the poor? How selfish and wrapped up in yourself do you need to be? Who can afford children? The average wage is £25k in the UK. How can an average person get a mortgage on a family house to raise children?

    Have kids. Make them the government's problem. Its that or go quietly into the night.

  • rate this
    +8

    Comment number 527.

    474.Charlie

    You earm 60k and claim your wife has to take a job shelf stacking to make ends meet.... Diddums!

    Good idea for a change from the government, shame they made it so confusing and as others have said, made is possible to evade (Tories don't tackle evasion) via pension contributions.

    It is hilarious the well off are whinging, rather ironic.

  • rate this
    0

    Comment number 526.

    282.
    astro1278

    "This will raise 2 Billion a year"- closing tax loopholes and making sure that those who should pay tax do would raise 30 times as much. As for a tough decision, no it is not its easy to hit families irrespective of their backgrounds.

    Haven't you noticed tax loopholes and tax avoiders are also being addressed. So it is not picking on families.

  • rate this
    0

    Comment number 525.

    It is impossible for any government to make any tax change in a way that totally maps fairly onto the circumstances of every single person and family in the country. There will always be an element of rough justice. One cannot look at one change in isolation. In a few years the government should look at impact of all its changes and make adjustments if any single group has been unduly hit.

  • rate this
    +1

    Comment number 524.

    473.Boro Jonesy
    10 Minutes ago
    '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?'
    ============

    Ah, the eugenics solution!

    Such a success in 1930s Germany wasn't it?

  • rate this
    -3

    Comment number 523.

    This is not fair. If child benefit is to be needs based then it should be assessed as such. If it is not to be a universal benefit, then remove it from everyone. The removal of it from our family will leave a significant hole in our budget, yet next door with a higher combined family income will retain it? Why do they need it and we don't? Afraid that Mr Cameron has lost a core voter here.

  • rate this
    +1

    Comment number 522.

    Will those earning over 50K be expected to pay for their policing now?

    Will they be expected to pay for their own defence?

    Where do you stop. Will they be expected to pay for their own horse?

    Neigh lad. That's a perk of being in the news...

  • rate this
    +1

    Comment number 521.

    Balls says it's a complete shambles; and he's an expert on shambles, like the last government's! I can't imagine what it must be like to earn £50,000+. When I had my children, we had to fit our lifestyle to having the children, not the other way around. I don't recall any extra payments, though there was probably something in the tax allowances.

 

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