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It will be fully withdrawn where one parent earns above £60,000.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
    +2

    Comment number 820.

    I luckily don't earn £50k per year because i had to get a new job thanks to DC's handling of the economy. So i have taken a 5k per year pay cut, my salary has been frozen for 3 years, I pay more tax, my pension contributions have increased, my mortgage has stayed the same (fixed rate before crash), my cost of living expenses have increased. Stop using the word fair, nothing you are doing is fair

  • rate this
    +8

    Comment number 819.

    Where were you when...

    They came for the unemployed, the disabled, the unions, the factories, the working class, the sick, the dying, the weak, the voiceless?

    No good complaining now, bit too late for that. Now it's your turn. Did you really think they were on your side? How deluded.

  • rate this
    0

    Comment number 818.

    So a couple earning £49k each is better off than a single person working couple earning £50k. Not right. Tax the household income.
    They should chase those companies who pay little tax in the UK or top earners not paying the 40% through loopholes. Perhaps that would upset too many of his mates.

  • Comment number 817.

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

  • rate this
    0

    Comment number 816.

    As many have said this is an obsolete benefit left over from WWII to help families with missing parent and to encourage faster recovery.

    The simplest way to get rid of it would be the only pay for the first birth, and half for 2nd.

    But also stop increases, then when £20 or £30 becomes irrelivent due to inflation, scrap it completely to remove the cost of implimentation.

  • rate this
    -1

    Comment number 815.

    #756
    You really are gullible!

  • rate this
    -2

    Comment number 814.

    "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"

    People like myself who do not borrow ourselves into oblivion preferring to save are suffering because of these low interest rates. My savings are not worth a damn while those constantly borrowing are rewarded. How is that fair?

  • rate this
    +1

    Comment number 813.

    @772: "How can they reduce the tax for very high earners".

    They didn't. 45% is more than 40%.

    "Think about the bankers getting their large bonuses having been bailed out by us."

    That was in 2008, under the previous government. Not saying that makes it right, or that I agree with a lot of current policies, but you can't blame everything on this lot.

  • rate this
    +3

    Comment number 812.

    777. HowDoYou

    As I said before, the reason for child benefit is not to subsidise child care. If both parents choose to work and improve the family lot then good for them but that in no way implies they deserve child benefit to assist in funding it.

  • Comment number 811.

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

  • rate this
    +2

    Comment number 810.

    Stop CB altogether.

    Help the poorer families who need the money through reducing their tax and/or increasing benefits to them, that way the people who need it get it.

  • rate this
    +3

    Comment number 809.

    "hellhesk
    My husband earns £50k then bonuses. Our daughters nursery fees are £900 a month. We now get nothing. I currently work full time on a good salary."

    Sounds like you must be on around or more than £100K income then so can both afford childcare if working is a priority for you AND don't need my taxes to subsidise your choices through child benefit.

  • rate this
    +4

    Comment number 808.

    793. besthaso

    we are not anti-children. We are anti paying for other peoples children.

  • rate this
    +1

    Comment number 807.

    1% on any Benefit Payment will be a lot less than even 1% on the Average Wage (£26,500 ?)
    Obviously the Government don't include the massive increases in Executive Pay over the past years. I wonder why ?

  • rate this
    +2

    Comment number 806.

    He drapes himself with feigned philanthropy in one instance hoping that you have ignored the fact that he gave himself and many others of his ilk a Tax Cut.

  • rate this
    +2

    Comment number 805.

    Recipients of means tested benefits have the amount received as CB deducted from their allowances. Abolition would make no difference to the poorest in our society if they were not to receive CB in future, It is difficult understanding the half measure which has been adopted by the government. Complete withdrawal would make more sense. A good start, which will surely lead to eventual abolition.

  • rate this
    0

    Comment number 804.

    #779 Oh dear. Not the mythical benefit addict story again. I thought this usually only appeared on Monday morning, posted by Tory Central Office.

  • rate this
    +2

    Comment number 803.

    I would say it was fair if it was based on joint income of household being based on oneoncome is grossly unfair and discriminates against mothers who dont wish/cant afford to put their children at nursery which full time around out way is approx 900 a month. Its a joke,

  • rate this
    -2

    Comment number 802.

    The concept is okay, the execution is pathetic. It should be based on the total family income not just the main income, and should only be payable for the first 2 pregnancies and not for however many offspring a person can produce

    Mr Cameron you are so wrong on this one I cannot understand how or why you are unable to comprehend the error of your ways.

  • rate this
    +2

    Comment number 801.

    Fairness, that old chestnut again. True fairness would be either CB for everybody or CB for nobody, which leads me again to believe that politicians are using a warped definition of fairness/justice to selectively achieve their political ends. I personally think that CB should be scrapped for everyone

 

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