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It will be fully withdrawn where one parent earns above £60,000.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 560.

    Why have children if you cannot afford to keep them? Why have children and then expect someone else to pay for them? Why should I, as a taxpayer despite being retired, be expected to pay for your children's upkeep? If you can't afford them, don't have them!

  • rate this
    +4

    Comment number 559.

    from above:

    He also confirmed he wanted to remain prime minister until 2020

    You have to win an election first, but after your past performance you will be made redundent and become a benefit scrounger!

  • rate this
    +3

    Comment number 558.

    Those who have just arrived in this country will be eligible for child allowance whereas people who have worked hard and paid into the system for many years may lose it. Immigrants who have never paid in can claim child allowance for children that aren't even resident in this country! This is ridiculously unfair to those who have contributed for many years.

  • rate this
    +1

    Comment number 557.

    I have worked and studied hard all my life and now I can AFFORD to have a family. I do not mind not receiving benefits but I don't understand why I should pay for those staying at home making children "as if it was a business" in order to receive benefits???? Remove them for all and spend the money for the elderly or the NHS!!

  • rate this
    +3

    Comment number 556.

    If you can't afford children you shouldn't have them....is the simplistic battle cry of Team Daily Mail.
    Fair enough....no cleaners bus drivers no dustmen no labourers no retail staff.
    A second point. What parameters do potential parents use to plan families?
    How the hell are they supposed to anticipate events like the obscene greed driven corruption that nearly destroyed western economies?

  • rate this
    0

    Comment number 555.

    I think this policy will be the single biggest vote winner for UKIP. Tory supporters are fed up with the hypocrisy of George Osborne. I am surrounded by life long Tory supporters and they are leaving in droves.

    How can you take away one universal benefit but not the others?

  • rate this
    -1

    Comment number 554.

    We should scrap all child benefit. Having children is a lifestyle choice, and ordinary taxpayers should not subsidise it. To make it fair, announce that no child born more than 9 months from now would qualify.

  • rate this
    +2

    Comment number 553.

    @510Anne
    Everything you say is true.

    I understand your frustration, but no social security system is perfect and there will always be loopholes, and you may need it one day.

    The alternative is the Indian model, where people have no option but beg on the streets for an existence.

  • rate this
    +3

    Comment number 552.

    We seem to be happy to spend £20 odd billion on fighting wars in Iraq and Afghanistan. Yet the people at home have to put up with death by a thousand cuts.

  • rate this
    +3

    Comment number 551.

    Moralising about who should be entltled to universal benefits is ludicrous. Either universal benefits should be dealt with 'universally', or they should be scrapped completely and directed at the needy and inadequate.
    If they were scrapped, children living in places like Poland, who have no tie to the UK and fuel allowance for better off pensioners would be also, rightly, abolished.

  • rate this
    +3

    Comment number 550.

    David Cameron is right, if you do not get the money from cutting Child Benefit you have to get it from tax somwhere else.

    The Government expects to save £2bn from this cut. Also this week MP Paul Burstow proposed cutting pensioners heating allowences and bus passes to save £1bn. If the Gov dont do these cuts they might not be able to afford £3bn cutting tax to 45p for the super-rich

  • rate this
    +2

    Comment number 549.

    I read somewhere that if you decide to opt out but then your circumstances change 2 or more years later (for example your salary falls below 50k) then you are not entitled to claim anything. This then forces you to claim now even if you earn over 60k just to safeguard against future claims. Anyone know anything about this as I cannot find anything on hmrc about it.

  • rate this
    +1

    Comment number 548.

    We now have millionaire civil servants and hundreds of civil servants being paid (I nearly said earning) over £200,000 a year.

    Cut that waste first and leave CB as a universal payment for the first 2 children (unless they are triplets).

  • rate this
    0

    Comment number 547.

    @jgm2 - you're just proving my point. I've lived in social housing and I now have a mortgage. I'd rather have this house than any of the social housing I've lived in. But you, like others on here and the government, are speaking from the point of view of someone who isn't going to be affected by these changes. I'm on over 40k but not 50k but with the DLA and CB changes I'm going to lose 7k p/y.

  • rate this
    -1

    Comment number 546.

    @ 497.Gongfarmer

    Instead of moaning about the loss of child benefit, why not move closer to where you work instead of commuting. You will save money, reduce your carbon footprint, and you will actually be able to spend time with your children, which is more important to them than what you can buy for them.

  • rate this
    +2

    Comment number 545.

    @469 I have an MSc degree in Economics thanks. Just have to admire the way these guys manage to have their ( and everyone else's ) cake and eat it and keep coming back for more. Bah Humbug !

  • rate this
    +1

    Comment number 544.

    513 - hellhesk
    You may not have noticed that outgoings for everyone are so high! You chose to have the children. Cut your coat to suit your income like the rest of us have to. My electricity, oil, food is no cheaper than yours and I get far less, so excuse me if I don't cry at your plight.

  • rate this
    +2

    Comment number 543.

    In the 21st century the rich cry for government hand-outs. Communism failed now capitalism fails: Most people think someone earning 50k is rich and most people earning 50k are richer than most. So if being rich in a capitalist society isn't rich enough to not need government hand outs - capitalism is broken. And to most who have already had money taken from them by the government - this is a joke.

  • rate this
    0

    Comment number 542.

    As a principle, I do agree with the policy but it is the way it has been brought in that is fundamentally unfair. Single parents aer discriminated against yet again. It would be better to scrap child benefit all together and then up the child tax credits by the same amount so that those who need it still get it but it is family income taken into account.

  • rate this
    0

    Comment number 541.

    Why is anyone being paid to have kids? You want them, you pay for them. As for the reduction; as it stands its totally perverse. It should be based on a total income of the family, not one earner.

 

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