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It will be fully withdrawn where one parent earns above £60,000.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
    +6

    Comment number 620.

    I agree with the removal but the implementation is absolutely bonkers..

    I also agree that it should be capped to 1-2 kids only.

    However PM cannot say anything about fairness when he removes this for families who have one earner above 60K, while the same time he reduces tax by 5% for people above 150K!

  • rate this
    0

    Comment number 619.

    This is all very well providing it applies to those 29 million Eastern European immigrants who want to emigrate to this country in 2014 as we are still known as the country with a benefit culture.

  • rate this
    +1

    Comment number 618.

    With children of many marriages/relationships now living with one parent and a new partner (possibly not even married) - who will calculate ? Does the salary of the non custodial parent get taken into the equation? What about a young parent still living with their parents - does the salary of the grandparents get assessed or just that of the young parent?

  • rate this
    0

    Comment number 617.

    There is little logic to discriminate on the basis of 50k a yr. Why should 2 partners earning 40k each still benefit when one partner with 50k and one with 25k will begin to lose out. It should be based on total income in a family.

  • rate this
    +2

    Comment number 616.

    513. hellhesk

    Madam

    Please refer to comment 394 and then ponder your negative ratings !

    You have made you bed........

  • rate this
    -31

    Comment number 615.

    The people saying if you can't afford children don't have them are idiots. Having children is a social obligation, people that do not have children are selfish, not contributing to the future needs of the country and denying the country of future taxpayers, workers and members of society. Why let others do your duty for you. You should be paying for others to have your share of the children.

  • rate this
    0

    Comment number 614.

    578 clive hamilton
    no you are WRONG
    allowances are still claimed up to said ammount.
    so on the first £35k 20%, only the portion earned ABOVE ALLOWANCE is subject to higher ammount

  • rate this
    0

    Comment number 613.

    @594.bobbins
    Is it a functioning society? I think it's pretty busted myself!

  • rate this
    +10

    Comment number 612.

    The better off and chattering classes were rubbing their hands with glee when this government hammered the poor, sick and disabled. Now it is their turn they are seething. High 5's Dave!

    573.Captain Lort

    The purpose of benefits is to support the poorest in our society, not to support 60k+ earning spongers.

  • rate this
    +3

    Comment number 611.

    515.
    Blythkeith
    2 Minutes ago

    "I think 60k is too low when outgoings for WORKING families are so high."

    "If you can't afford to "fund" your kids yourself, don't expect the State to subsidise your hobby - you don't HAVE TO have kids."

    but the prob is the state does, how many have 6,7,8 kids with different partners and leave the state to fund their breeding.

  • Comment number 610.

    All this user's posts have been removed.Why?

  • rate this
    +5

    Comment number 609.

    I totally agree with the scrapping child benefit for those earning over £60k. If you can earn that sort of money then you should easily be able to afford to pay for your own children. .

  • rate this
    -10

    Comment number 608.

    Ah, that old chestnut "You should'nt havd kids if you can't afford 'em".

    Life (and its costs) used to be relatively predictable and hence one could decide (20 years in advance) whether kids would be an affordable luxury.

    The sinister systematic merging of politics, banking and utilities has now left even the most gifted economics experts without a scooby as to how much kids will cost next year!

  • rate this
    +3

    Comment number 607.

    The politicos have created free for all, free to all comers, right through our society from business to benefits to tax.
    The money has run out and they sound surprised and tinker around the edges, playing the blame game.
    We let them, we even endorse them. Why, they don't have the answers, just offer a game of political merry go rounds.

  • Comment number 606.

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

  • rate this
    +8

    Comment number 605.

    No doubt a few skiing holidays will have to be cancelled this year.

  • rate this
    +5

    Comment number 604.

    The problem for any government is that we have got used to child benefit.
    It should be an exception to the rule: to protect the children of the less well off. There is no justification for needing child benefit when you earn over £50K.
    Well done Cameron.

  • rate this
    -1

    Comment number 603.

    Dumb or Lazy?

    child benefit for higher earners, winter fuel for rich pensioners etc should all go. But why should two parents earning 49k each or 99k as a family keep child benefit whereas one family reliant on one earner earning 60k loose out?
    Diabolical and bad policy making.

  • rate this
    -2

    Comment number 602.

    It would appear that most of us receive a benefit'? Does that make us a nation of scroungers?

  • rate this
    -1

    Comment number 601.

    I am in broad agreement with yoinkster and Get-the -Tories-out (although actually the last thing I want is Labour in). The Government has to take steps to balance the books. The fact is that this is a no win situation and CB should be limited to 2 children. The cut has to fall somewhere and at least it has been phased in fairly between 50K and 60K. Government spending is still going up each day

 

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