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It will be fully withdrawn where one parent earns above £60,000.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
    -3

    Comment number 860.

    i hate them to billy, but you know, if you can't afford to have children, then don't have them, its a privilege not a right! unless you have a council house, lots of kids, all with different dads, and they don't know who the dads are, they are often obese, drink, smoke, always in leggings, and kids in designer clothes, but no breakfast, cos said mum can't cope, yes what great way to spend taxes

  • rate this
    0

    Comment number 859.

    @ 835.CDLander84

    An idiotic suggestion. I am childless, but some of my comfortably off friends invest the CB on behalf of their children, so that they may have a fighting chance when they leave further or higher education.

  • rate this
    -1

    Comment number 858.

    Labour for the scroungers would probably have a policy of more kids the bigger the taper payment. Tories for the bankers, sneakily removing benefits from those that already contribution a massive 40% tax. I guess this time it leaves me with only UKIP to vote for. Sorry Mr Cameron, I happen to live in YOUR constituency.

  • rate this
    +1

    Comment number 857.

    @Cantsilenceme

    'These bunch of hooligans are going all out to turn us against each other'

    Is that coffee you can smell? You only just noticed? It's only been hppening for three years.

  • rate this
    +3

    Comment number 856.

    In reference to comments regarding repopulation of the country the birth rate clearly shows this has not worked. The family is now consigned to history, these final steps towards the total destruction of society, family and community in the UK and the Western world do not surprise me. We will reap the rewards of our short sighted policies is the worst possible way within the next decades.

  • rate this
    -6

    Comment number 855.

    Yet another attack on middle England and people who work and not scrounge off the state, my wife earns 52K, sounds great but once she takes tax, NI, pension her actual take home pay is around 35K per annum so may earn over 50K but doesn't get that. I earn 16K before tax. Don't claim any tax credits as just out of that bracket, we have a mortgage and same bills as everyone. This is unfair

  • rate this
    0

    Comment number 854.

    What happens if I earn over £50k live with my wife and her son. Am I still liable for the additional tax? Also I have a son from a past relationship how am I affected by this as I shouldn't have to declare my earnings to my ex wife if I choose not too

    Any advice would be appreciated as HMRC website isn't helpful for this.

    I also agree that it should be stopped after two kids much easier thanks

  • rate this
    +1

    Comment number 853.

    The govt say that marriage is supported and that families are important in a childs development,so as a father who works c£60K and my wife chooses to stay at home to bring our children up we get the rough justice. The reason being that the govt cannot work out how to add two household incomes together and come up with a fair package. Lazy Govt delivers poor decision.

  • rate this
    +2

    Comment number 852.

    Good idea - badly executed by a bunch of incompetents.

  • rate this
    0

    Comment number 851.

    Ah here we go - some people suckered into believing the Tory myth about benefit scroungers rather than believing the actual truth, which is that the vast majority of our welfare payments go on pensions, and of the unemployed benefit paid, 0.7% is fraudulent, that's right, less than one percent (obviously it should be zero). A lying Tory party and dim electorate, a dangerous mix.

  • rate this
    +3

    Comment number 850.

    #332 simplelogic
    A person on £35k pays 20% tax, so post-tax they get £28k.
    A person on £50k pays 40% tax, so post-tax they get £30k.
    ----
    Wrong. You pay tax on the amount your earn over the band thresholds plus your personal tax allowance.
    So ignoring NI and pension, someone on £35k would pay about £5.5K tax and someone on £50k would pay about £10k tax.
    http://www.hmrc.gov.uk/rates/it.htm

  • rate this
    -1

    Comment number 849.

    "I'm not having children, why should I pay for them?"

    Should you have an opinion? You have no interest in the future of society. Society can go pop the day you die and you won't care because you don't have any vested interest in it.

    Deliberately not having kids for lifestyle is Darwinian stupidity. Don't expect society to listen to the rantings of those who choose an iPad over their genetics.

  • rate this
    +10

    Comment number 848.

    I'm sick and tired of comparatively rich people moan about losing child benefit. I earn £20,000 a year and get no benefits. Nothing at all. I don't have kids because I know I can't afford them. But people who earn 3 times more than are moaning how unfair it is that people like me who at times struggle to eat won't still be paying for there kids. People seriously need to get a grip.

  • rate this
    +4

    Comment number 847.

    @829: "A tax on cliches might be worth a few quid?"

    If we did that half the people on HYS would be bankrupt....

  • Comment number 846.

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

  • rate this
    +4

    Comment number 845.

    Child benefit should ONLY be for the low paid in society. Frankly I find anyone with a household income of over 50k claiming such benefit incredibly insulting. I would give my left arm to even earn the average UK wage.

    "He promised British voters they would be offered a "real choice" on Europe at the next election"

    How many times has this been promised now? It will never happen.

  • rate this
    +4

    Comment number 844.

    830.smm

    @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

    How do you know? You are never with them!

  • rate this
    +1

    Comment number 843.

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

    Like the mythical middle England family with an income of £60,000 at the higher rate of tax and no benefits affording nannies or quarterly cruises around the Med. Thats normally posted on here from the scroungers themselves.

  • rate this
    +3

    Comment number 842.

    A working Class Tory/UKip voting family with an average income and 2 or 3 kids could so easily find themselves out of work due to redundancy tomorrow.
    And it's probable that either parent would not be able to find similiar employment on the same wage if atall.Low paid work, tax credits and then BAM! You have just become the epitomy of everything you were once brainwashed to hate ! IRONIC

  • rate this
    -1

    Comment number 841.

    I find the excuse that to means test the household income is not feasible is absolute rubbish. This is the only fair way to administer this change. Maybe I should pump up my pension fund until my children leave school!! The Tories have got this one so wrong and unfair, I don't mind contributing the the UK's financial recovery after years of waste but at least do it fairly.

 

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