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It will be fully withdrawn where one parent earns above £60,000.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 760.

    @dudelange
    We live in a country where it is practically impossible to have child care due to costs. It is better that my wife take care of our child personally rather than pay all her wages to someone else.
    ----------
    I couldn't have said it better, I am in the same situation myself. I work 60 hours a week and earn just over 60k. 60k is not a high income when you are the sole earner with family.

  • rate this
    +3

    Comment number 759.

    Sick to death of people on 50K a year whinging and whining about losing child benefit. All child benefit should be stopped immediately.
    Before you have a child or children be sure you can afford them without the government having in effect to subsidise them. Why should a proportion of my tax pay for other people to have kids.

  • rate this
    +2

    Comment number 758.

    A simple point to this whole argument - If you can't afford children, don't have them. Simple as. Relying on State hand outs just makes most of you look like scroungers in most peoples eyes.

  • rate this
    +1

    Comment number 757.

    Why can't the stupid government just pay child benefit for the first 2 children in the family. That would be easier to implement, be a much fairer way and hopefully prevent families having more children than they can afford to.

  • rate this
    -8

    Comment number 756.

    I earn just over 50k and so my partner will lose some CB. My brother earns well in excess of 60k, has divorced his wife yet she gets to keep her CB. I thought DC was all about saving the family but I am worse of staying with my partner. How is this fair and how does it promote family life!!!!

  • rate this
    0

    Comment number 755.

    So if I earned £60k, with my wife staying at home to look after the kids, and my neighbours both work and get £30k each, then I'm stripped of the child benefit, and they carry on receiving it? How is that a fair system that promotes looking after your own children instead of working & having a child minder?

  • rate this
    +1

    Comment number 754.

    The unfairness in this latest from Dave is the cut for those on one income of £50,000+ with no cut for those on two incomes almost double that. This glaring error was noticed and debated some time ago, yet there's been no change. Dave is far too clever for it to have eluded him, so we can only conclude that he thinks this is 'the right approach.'

  • rate this
    0

    Comment number 753.

    Whenever you hear Cameron, Osborne or any of this shower of incompetents using the words "right" "fair" or "wrong", you can pretty much guarantee the truth is the opposite, and they are simply regurgitating soundbites designed to hoodwink those people who have limited critical thinking ability. The real truth here is that the Govt saves 10x more money on unclaimed benefits than are lost to fraud.

  • rate this
    +1

    Comment number 752.

    @710Anne
    I didnt castigate you; I simply suggested that our elected leaders are responsible for this mess, not ordinary people.

    What I do believe is that energy consumed making comparisons of unfairness is wasted and brings no good to an individual, in my experience.

  • rate this
    +5

    Comment number 751.

    Lets get things in perspective, wealth,foxhunting and gay marriage are more important to the tories with a touch of warmongering, the everyday humdrum lives of the populace are of little concern,just tip them upside down and empty their pockets,said a tory in the woodpile.

  • rate this
    +1

    Comment number 750.

    I fully support the decision to remove it from high earners. We've a total income of £25k a year and can afford to provide excellent quality of life to my daughters. Try budgetting better if you think you cant afford to lost the child benefit earning 50-60k a year. Try giving up on things you dont need and take for granted. If you want to keep your child benefit give me your salary, and have mine

  • rate this
    -1

    Comment number 749.

    Changes to child benefits should have been made as part of the upcoming Welfare Reform. That way the people that need help would be the ones getting it & large savings could have been made. The current change doesn't go far enough (basically because it's an almighty vote loser!). To still be handing out cash to 'support' people who are not on the breadline (or even close to it!) is ridiculous!

  • rate this
    0

    Comment number 748.

    Family A: 1 Parent on £50k pa, 1 unemployed = £50k pa total. They lose child benefit.

    Family B: Both parents on £49k pa = £98k pa total. They keep child benefit.

    Stupid idea!

    Either keep it for everyone and waste some of it on greedy, rich people. OR scrap it all together and pump the money in to subsidised childcare for most, and free childcare for low income families.

  • rate this
    0

    Comment number 747.

    I don't really think that anybody should be paid to have children.

  • rate this
    +1

    Comment number 746.

    If you are reliant on child benefit then you can't afford to have kids. Scrap it entirely, people need to learn personal responsibility, I wouldn't have a child until my girlfriend & I know full well we could afford the cost of bringing one into the world. I resent paying for the children of my peers when they have had accidental pregnancies knowing they didn't have an income to support it.

  • rate this
    +2

    Comment number 745.

    I've lost any faith I had in the UK political system, they're self-serving careerists all but I will use my vote wisely at the next election and do my bit to put an end to these vindictive slash & burn policies the Tories are addicted to. I was once poor and relied on some state support it should be the same for all. The "fiscal deficit" is a gift chimera to these nasty, hate-filled idealogues.

  • rate this
    +1

    Comment number 744.

    My husband and I are childless because although we'd love to have a child, we don't feel we could afford to give a son or daughter the quality of life that they ought to have and that we had. We're in our late thirties now and are very sad that it will soon be too late and we'll probably never have the opportunity to be parents.

  • rate this
    +2

    Comment number 743.

    Some people really do need CB, others simply do not. .....a lot of people get les than 10k a year and have the same bills as you 50k earners, not all jobs pay high. Single mothers suffer more than anything else due to the pathetic attitude of some fathers....I am male and not as some idiots may think a "bitter mother".

  • rate this
    0

    Comment number 742.

    Wife " Why do you hate the masses so much dear".
    Cammy It`s in my DNA dear - They are to be worked till 70, Poor education, I`m so excited at stopping them university entrance.My unfair taxes are crippling them and i cant stand paying for their wretched kids.I`m becoming a dictator dear and the poor better watch out.

  • rate this
    0

    Comment number 741.

    Recognising that the state should assist people in bringing up children.

    If this is done through a tax allowance people who do not pay tax will not get any assistance so by making a universal payment everyone gets assistance.

    Those that pay taxes still pay tax and most will still be net tax payers.

    The universal payment is cheap and simple to administer and fair.

 

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