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It will be fully withdrawn where one parent earns above £60,000.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 780.

    738.
    justicevjustice
    7 Minutes ago

    on benefits you can earn up to £27k a year,

    ---------------------

    Not so. On benefits you can work 16 hours a week. You are allowed to earn £20 a week before benefit is deducted pound for pound over and above that £20 limit.

  • rate this
    +1

    Comment number 779.

    721. sam1952 said: "I to struggle by on a pittance of £65,000 per year, and now they want to take away my benefits! How am I now expected to keep my kids up to date with the latest fashion accessories? Irony"

    Who'll be loving this? The benefit addicts with 6 kids, sitting in their council house, smoking, drinking and watching sky while posting on HYS with their iphone.

  • rate this
    0

    Comment number 778.

    513. hellhesk
    342. yoinkster
    You are both correct. The threshold for child benefit is unfair: married vs living together. Also, historically CB was introduced to populate the country after WWII.
    Savings must be made unfortunately. Speaking of economics, I find it difficult to balance the outcries of having an old population against the outcries of having no more children. CB or not.

  • rate this
    +2

    Comment number 777.

    "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."

    Um the family with one unemployed doesn't have to pay nursery fees (£200-600/month) as they can actually have someone at home looking after their own children. Quaint old fashioned idea I know.

  • rate this
    +1

    Comment number 776.

    734.
    john curran

    Couldn't agree more mate. Cameron is an absolute disgrace. It totally shows that the rich will do very well but again Mr Hard Working has got clobbered.

    The tories are a disgusting breed

  • rate this
    0

    Comment number 775.

    Fopr once the PM has got it almost right, why do the poulation of the UK support households were both parents income ammounts to 90k but neither earn more than 50k. Just drop child care allowances for all housholds who earm more than 40k as if can't afford you should not have, they are the rules of life. Some people choose no childeren as a lifestyle or economic judgement COMMON SENCE!!

  • rate this
    0

    Comment number 774.

    It's another poor explanation from the PM, interestingly, are there any 40-50k earners out there who would like to post some views?

  • Comment number 773.

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

  • rate this
    +3

    Comment number 772.

    Tories back to protecting the well off. How can they reduce the tax for very high earners because it is a logistical headache and introduce this. So inconsistant. Think about the bankers getting their large bonuses having been bailed out by us. Why allow that? Absolutely sick of the lot of them. How about leaving the bubble at Westminster and see the real world.

  • rate this
    +3

    Comment number 771.

    #513
    Are you serious?
    Cut your cloth and if you can't afford another child then you should have been more careful! Why expect the state to pick up the bill for your carelessness?

  • rate this
    +3

    Comment number 770.

    I agree on the need to reform the benefits system. It is broken and needs fixing. But what about stopping the pensions for those who failed, yet walk away with a nice, big fat pension eg Fred Goodwin and George Entwistle are just two examples that spring to mind. If I fail I'll get the sack with no golden handshake. Reward for failure is sending out the wrong message.

  • rate this
    -3

    Comment number 769.

    Ed Balls(up) wants 'progressive universalism'. I guess that means he'd like to progressively extend the benefits culture and free hand outs to all Liebour voters whilst the tax is picked up by those in employment. I quite like the idea of redistribution of wealth, I wouldn't say no to some of it!!, however if you aren't prepared to work for it then you shouldn't get it for free.

  • rate this
    +7

    Comment number 768.

    I wouldn't mind David Cameron getting tough on Child Benefit if he was simultaneously clamping down on tax-dodging corporations. If Amazon, Starbucks and Facebook can avoid paying tax, why should ordinary people have to suffer?

  • rate this
    0

    Comment number 767.

    At least corporation tax has been reduced and tax avoiding companies don't have to pay tax - so business the super rich own are safe from government tax. All the rest of us can prop up the life styles of the super rich. All in this together - we will be soon - but not the way cammeron envisaged. Time we joined together to make bussiness and those bankers who still get massive bonuses - pay.

  • rate this
    0

    Comment number 766.

    @734. john curran
    How do you manage to get the marginal rate for £150K earners at 45% whist for earners at £60K you get 65%?

    Figure fudging to fit your political opinion I think

  • rate this
    +2

    Comment number 765.

    Child benefit should be scrapped for everyone. If you can't afford something you should have it, simples.

  • rate this
    +3

    Comment number 764.

    @744.heartyh
    I'm with you there heartyh. We are the kids from the Thatcher era who were stolen and shafted from.

  • rate this
    +8

    Comment number 763.

    i cant believe the greed of some people! we have a combined income of 26000 and we are able to live, those people that are lucky enough to earn 60k plus need to wake up and smell the coffee UNBELIEVABLE! on the other hand the system needs to be revised for dole wallers who milk the system, this system should benefit LOW PAID WORKING FAMILYS

  • rate this
    -1

    Comment number 762.

    If we are heading down the road of taxing a families income, rather than individual taxation, then I don't see why I can't have my wife's tax free allowance (she is a housewife)

  • rate this
    -3

    Comment number 761.

    Once again the Tories have gone after easy targets! Both myself and wife have always voted conservative. Our parents have done the same. Come the next election we all plan to vote for UKIP maybe they will target the the real drain on national expenditure those who do not want to work and those individuals who drain our national health service because they can't stop eating!

 

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