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It will be fully withdrawn where one parent earns above £60,000.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
    +4

    Comment number 840.

    With an UK average annual salary of around £26K I struggle to understand why Child Benefit threshold is £51K per individual income let alone joint household income?

    This might be an unpopular post but surely benefits are for those who are struggling to meet the very basic necessities?

  • rate this
    +7

    Comment number 839.

    The tears in my eyes well up, for those on twice the average wage moaning about losing child benefit. Get a grip be thankful you don't earn a lot less.

  • rate this
    +6

    Comment number 838.

    "smm
    Ridiculous sweeping statement that is not true."

    A total coincidence that many more children now start school with difficulties talking and lacking toilet training then?

    "My children have been in nursery part time since young and are all the better for it"

    How do you know? Did you perform a control experiment? How do you know they'll end up better in the end than if you'd stayed at home?

  • rate this
    +6

    Comment number 837.

    Shop at Lidl, make the kids walk to school instead of driving them, turn your heating down a few degrees, turn the lights off when you have left the room, cut the Sky subscription and make do with Freeview. Quit drinking and smoking. And no you don't need a new Playstation or the lastest COD. Just some of these will save more than the loss of CB.

  • rate this
    -5

    Comment number 836.

    Statement from Govt spokesperson:

    "We must all play our part in reducing the deficit. There are a number of Central European banking families who want the interest on the loans they have saddled us with.

    And that is why I am announcing today a package of measures so that children will now be classed as a luxury item and a duty levied on a per head basis on an annual basis".

    How long?

  • rate this
    0

    Comment number 835.

    I'd rather this kind of benefit, amongst many others too, be changed so that no money is passed over to the recipient. Rather, in this case, food and clothing vouchers etc. That way at least the welfare is taken care of and leaves no opportunity for hard earned tax payers money (especially of those without children) to be squandered on other things.

  • Comment number 834.

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

  • rate this
    0

    Comment number 833.

    As the comments agreeing with no benefits for rich kids increase - there's been more and more comments saying: no benefits for poor kids too. Does becoming rich reduce the size of a persons heart and soul?

  • rate this
    0

    Comment number 832.

    #806 a lot of what you say is very true......unfortunatly we had 13 years of labour who did 0 for the working man ..thats the trouble, by them allowing mass immigration they have made the lot of the working man even worse. No one can argue about relatively well off people not getting child benefit..its a nonsense.

  • rate this
    +10

    Comment number 831.

    Have brought up 3 children with combined income of approx 25k , regarding child care as could not afford to pay child care wife worked evenings so I could look after the kids after I had finished working , wish I had the problem of earning 50k a year .

  • rate this
    -7

    Comment number 830.

    @735
    'Childcare is NEVER good for children'

    Ridiculous sweeping statement that is not true. My children have been in nursery part time since young and are all the better for it

  • rate this
    +3

    Comment number 829.

    781. justicevjustice
    i totally resent my tax going to lazy people and single girls who have child after child to improve their lifestyle in their council home, with their 50 inch tvs, laptops, mobile phones, sky
    ------
    What about wealthy MP's renting tax payer subsidised properties ?
    Or muiti millionaires/billionaires of no fixed financial abode?

    A tax on cliches might be worth a few quid?

  • rate this
    +2

    Comment number 828.

    '781.justicevjustice
    2 Minutes ago
    i totally resent my tax going to lazy people and single girls who have child after child to improve their lifestyle in their council home, with their 50 inch...'
    ==============
    How much 'profit' do you imagine such 'lazy people and single girls' make out of the £13.40 per child after feeding, clothing etc. said child?

  • rate this
    +5

    Comment number 827.

    I think its fair to say that child benefit will be stopped in the near future, and fail to see how stopping child benefit for those earning 50k+ is benefitting the only the rich.

    Those people just above the 50K threshold who are being clobbered - can go to their employer and say "Look - I earn 50k - pay me £10 less and I can recover 52*£10 in child benefit."

    Think, don't moan.

  • rate this
    +4

    Comment number 826.

    Have you noticed that when anyone on benefits is interviewed in their home there is always a huge wide-screen TV in the background, decent furniture, loads of kids and a dog to feed. I work for my hard-earned and I don't have any of the above. Something is wrong here! Get it sorted Dave!

  • rate this
    +1

    Comment number 825.

    Mr Cameron' another 7yrs in goverment some how i don't see that coming m8ty, end of the day £50k should be the cut of point for both working parents or a single parents.also a cut off point for 4 kids any more than that it's your choice to find the extra money.our next door got 9 kids and not both of the parents not working now that's taking the piss.
    car boots £1000'S NOT PAYING TAX'S AWEEK

  • rate this
    -5

    Comment number 824.

    so you go to uni, it costs you thousands of pound of your own money, you get a good job, you buy a nice house, you have a couple of kids, and you probably keep a few families a week out of the tax that you pay, so, whilst your still paying back your uni fee's you are really going to be shafted, what is fair in that? surely the benefit fraudsters should be sorted out first!!

  • rate this
    +6

    Comment number 823.

    625.
    "The vast majority of children raised on benefits will be muggers....

    That is an offensive generalisation. I know many children whose parents were *helped* by benefits who have grown to be responsible and caring adults. My grand-daughter is one - her father walked out, paying nothing but she now has a degree and is training to be a vet.

  • rate this
    -3

    Comment number 822.

    Well done to those suggesting that we should not have children if we can't afford them, you're an inspiration you really are. However, a grasp of reality would suggest that life is not always that straightforward. I would scrap CB altogether and work on a series of tax breaks per child, high earners are already penalised for succeeding in their chosen field, we pay our way.

  • rate this
    +2

    Comment number 821.

    Benefits for thoes in need NOT thoes in want !
    50 - 100k ayear = no benefits
    Child benefit for first 2 children Max Personally I would set it at 1..

 

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