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It will be fully withdrawn where one parent earns above £60,000.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 720.

    By the way, just to clear up a little point for some: The purpose of child benefit is not to fund child care

  • rate this
    0

    Comment number 719.

    Great, so a family with an income of £60,000 (from one parent) will lose their benefit, while next door a family income of £100,000 (from two parents earning £50,000 each) will keep their benefit??
    There is already a mechanism for assessing whole family income (Tax Credit system). The Government to use this system to assess family income to make it fair!

  • rate this
    -2

    Comment number 718.

    Of course the very wealthy should not receive child benefit. But remember, they don't ask for it. They get it, like it or not. I 'm sure some very rich people send it back - but that is complicated so maybe they just give it to charity.That's what I would do if I was filthy rich and kept receiving CB I didn't need.So Cameron may not save as much as he thinks. System's flawed.

  • rate this
    +1

    Comment number 717.

    @ post 615.
    Don't be a fool. There are many reasons people have children and many reasons they do not. There are other ways of carry out ones social obligations other than procreating. Those who don't have children are able to, and do, contribute in ways that parents can't because they don't have the time.

  • rate this
    +1

    Comment number 716.

    So...a couple can earn 98k in total (49k) each, and still get child benefit, but if you have a couple who earn 98k because they have a single income doesn't get any. And this is fair because....? I am fed up with being taxed to hilt just because I've worked hard to be successful. I don't need child benefit, but then why should I subsidise other people's kids?

  • rate this
    +1

    Comment number 715.

    Can you lot not accept that the country is almost broke, and that something has to be done. Of course there will be winners and losers this is true, but it will always be so. And don't forget that no matter what the Coalition do, and especially the Tories good or bad, the Labour Party and their cronies the unions Labour will always be against it because that is the nature of the beast.

  • rate this
    +3

    Comment number 714.

    @ 701. David Windsor
    Many in this thread clearly believe that the role of government is to be Robin Hood- taking from the rich and giving it to---well them,
    =============
    Cameronhood takes from the poor to give to the rich.

    This will forever be the Tory way, and by default dragging the Lib Dims behind him.

  • rate this
    +2

    Comment number 713.

    Child Benefit should be limited to just the first 2 children of a family to stop people having kids just so the state can keep them all. I have 3 children and chose to have 3, so why should the state pay for my larger family? Both myself and my partner work to support our family and bring them up with the correct morals of supporting themselves, not relying on others and having self respect.

  • rate this
    +1

    Comment number 712.

    665.
    nel

    Yes - You have a social obligation to have children. If no-one had any children the population would decline and eradicate - is that what you want? People that do not want children should pay for those that do.

    669.
    keith95a

    According to Moneyweek magazine financial armegedon will occur within the next few years.

  • rate this
    0

    Comment number 711.

    This clown doesn't have a mandate!

  • rate this
    0

    Comment number 710.

    @553 voice of reason. You castigate me in one post then say everything I post is true? I work. I pay my taxes. I have done my bit for the next generation by having two children. I don't claim benefits. I don't need a loophole. I do however understand fiscal economics. And also understand people fraudulently claim benefits, possibly more of,them than reckless politicians and bankers.

  • rate this
    +3

    Comment number 709.

    Nobody earning more than £10K over the national average pay should get any benefits at all. None. Benefits should be an aid to those in need, not an electoral bribe for the middle class.

  • rate this
    0

    Comment number 708.

    @ 674. Clippy
    If you have moral sense of duty to this country why don't you report this to HMRC rather than spew your racist venom here. If your child does not stay in UK you must report it to HMRC as per rule. Just take a minute and call HMRC rather than spreading bad blood here. I hope sense will prevail here rather than fights.

  • rate this
    +1

    Comment number 707.

    All this is for is for the middle class system in this country too attack the poor and working classes!

    The prime minister is just a posh brat who used too smash up restaurant's and then pay for the damage , in Scotland and Wales they said no to the Tory vote , they remembered what they did the last time .

    Roll on 2015 and vote anyone except them , I voted Tory last time but never again!

  • rate this
    +3

    Comment number 706.

    I was retired on ill health grounds in my mid 40's. I receive an occupational pension of just over £7k a year.

    But because of this pension my ESA (support group) is reduced by £25 pw. How is it that CB is means tested at £50k pa when people choose to have children, but ESA is means tested at less than £7k pa when I didn't choose to get a chronic illness?

  • rate this
    0

    Comment number 705.

    676. IMcC

    wide sweeping statement.

    Maybe it'll be those children claiming more benefits, no job, never worked a day in their life taking funds out of the economy. Or is there going to be some sort of guarantee for all these people that say these children will be paying for our old age?

  • rate this
    0

    Comment number 704.

    Another ill conceived Tory policy.

  • rate this
    +1

    Comment number 703.

    Re 665.nel
    Are you suggesting we have no more children? The future sure will be rosy when this country`s demographic is made up entirely of elderly people. You win today`s star prize for the most ludicrous suggestion on HYS.

  • rate this
    +4

    Comment number 702.

    Its amazing the amount of people on here having a go at parents. This country cant afford alot of things but the government still pay for them. This clamour to shop benefits when we lining up a 100 billion + replacement for Trident and are involved in a pointless war half way round the world!

  • rate this
    -1

    Comment number 701.

    Many in this thread clearly believe that the role of government is to be Robin Hood- taking from the rich and giving it to---well them,I'd guess.There's more to fairness than that.You need to carry the well-off with you or they'll understandably find ways to pay less not more. Further, indescriminate resentment and conveying a sense of entitlement to other people's money is not very pleasant

 

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