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It will be fully withdrawn where one parent earns above £60,000.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
    0

    Comment number 740.

    Why is this change being introduced during a tax year? If i earned £50k in the first 9 months but only expected to earn £10k in the final quarter, am i entitled to CB in the final qtr? My total income would be £60k but only an annual equiv of £40k earnt since the law changed.

  • rate this
    -1

    Comment number 739.

    I would have liked to have seen it continue as it was for 7 years then change as follows, full payment for child 1, 60% for child 2, 25% for child 3 and 0 for each additional child. 7 years would allow enough time for people to be fully aware what they can expect and no families would be out of pocket now.

  • rate this
    +2

    Comment number 738.

    on benefits you can earn up to £27k a year, nice if you know how to screw the system, to get a job that would pay you that much a year, well, you have to have something about you, to have a job that pays £50k, well, that goes to show that you spent time at school actually working hard to achieve a better lifestyle. who is better thought of? not the tax payer thats for sure.

  • rate this
    0

    Comment number 737.

    #710
    And also understand people fraudulently claim benefits, possibly more of,them than reckless politicians and bankers.
    --
    Tax cheating is easily the largest form of fraudulent entitlement in the UK.
    Politicians like France Fraude and Liam Fox are hyper critical of the Public Sector and employee rights yet continue to screw tax payers via rental scams...it's like there was no expenses scandal

  • Comment number 736.

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

  • rate this
    0

    Comment number 735.

    At Last ... Perhaps now these people will think about having a child on this hideously overpopulated island ... And that hideous woman that is moaning that 60 thousand per annum is too low for her not to have her benefits needs to seriously get to grips with her spoilt life !!!
    If you want a child one of you needs to be there for them at all times ... Childcare is NEVER as good for your child

  • rate this
    +5

    Comment number 734.

    In April the income tax rate will be cut from 50% to 45% on incomes over £150000, so the marginal rate of tax will be 45% for the very rich. The marginal tax rate for a taxpayer with income between £50000 and £60000, with three children, will be 65%. Are we all in this together? The saving will be £2billion but the loss of revenue from the change to 45% will be £2.4 billion! Fit to govern?

  • rate this
    +5

    Comment number 733.

    This isn't fair! Cutting Child Benefit makes sense, but not how they're doing it. It should be HOUSEHOLDS earning over 50k, not just 1 person in the house earning that. My mum is a single mother working full time with 2 kids in school and no benefits other than CB. She earns over 50k, so now loses CB. 2 people earning 49k each keep it
    I support the changes, but only if they're done fairly.

  • rate this
    0

    Comment number 732.

    @513 wow £60,000 too low????? How fortunate you are. My wife and I both ear less that £30,000 combined and unfortunately unable to have children of our own, Thus our income tax and national insurance payments are subsidising your family. This is basically accepting CHARITY fromthose less fortunate than yourself. Take a look at the world without the rose tinted glasses

  • rate this
    -1

    Comment number 731.

    Cap the limit of CB to say 3 children, irrespective of wages. Increase the tax threshold by 5% year on year while at the same time reducing both the higher rate tax threshold and total benefits by the same amount. The arguement over CB will be irrelevant then.

  • rate this
    +1

    Comment number 730.

    Many unhappy people here. Change always is (esp when applied unfairly as this has).

    If the money saved was given back to "people" in general, via an increase in the basic tax allowance to lift the lowest paid out of tax, that might be fairer.

    Why take £1 from me in tax to give it back to me as £1 of benefits, pointless.... just don't take it from me in the first instance.

  • rate this
    +1

    Comment number 729.

    705 Pique

    Never mind my "wide sweeping statement"
    What about your "narrow minded prejudice"?

  • Comment number 728.

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

  • rate this
    +3

    Comment number 727.

    660.
    June
    4 Minutes ago

    631.corncobuk
    Just now
    25.
    June
    2 Hours ago
    Not nosy - angry. I have eyes.

    --------

    If as you say they have 2 cars, LCD TVs, holidays and heating on 24/7 (scary that you would know that) then they are obviously cheating the system as no honest person on benefits would ever get enough money to fund such a lifestyle. Report them on 0800 854 440.

  • rate this
    +1

    Comment number 726.

    I doubt anyone denies that cutting benefits for better off is the correct thing to do but the number of holes in this poilicy are utterly crazy.
    How one couple with a main earner on 60K get nothing while the couple each on 50K get the lot is mind numbing. If households are considered in this then total household income should be. I couldn't have come up with a policy as unfair if I tried!

  • rate this
    +3

    Comment number 725.

    @686

    The population of the UK is managed despite what they tell you. A smooth curve.
    http://tinyurl.com/bhlgykt

    If you don't have children, they let in more immigrants. Children or immigrants. Its a straight choice. We aren't over populated because of child birth. Its a total myth. Its carefully MANAGED.

    So, do you want to pay for children or immigrants? Your kids or theirs? UK is so dumb.

  • rate this
    -1

    Comment number 724.

    709. johval said: "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."

    Nor should they be a bribe to the lower class. Vote for me and you'll get more benefits. Thats Labours underlining message.

  • rate this
    +4

    Comment number 723.

    @660 Oh dear, That is really pathetic. You seem to be actively stalking whoever it is you are really angry with and personally if i was them i would be affraid of you. So people are not allowed to keep warm? watch TV (who has tube tellys anymore?) and also, people are not entitled to their privacy from a very very nosy and angry neighbour. I think you are a peeping June.

  • rate this
    -1

    Comment number 722.

    Economic madness. Means testing is expensive and HMRC will make a right mess of this £50k to £60k taper - expect lots of overpayments. Universal Child Benefit should be paid for the first two children, then no more.

  • rate this
    +2

    Comment number 721.

    I have to struggle by on a pittance of £65,000 per year, and now the bleeping Government are wanting to take away my benefits!

    How am I now expected to keep my kids up to date with the latest fashion accessories?

    IRONY - the opposite of wrinkly.

 

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