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It will be fully withdrawn where one parent earns above £60,000.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
    +6

    Comment number 880.

    Cameron and Osborne
    Economics Lesson no 1: You don't get out of a recession by making 99% of the population poorer and giving tax cuts to millionaires who offshore their wealth.

    What you achieve out of this is economic failure, poverty, public disorder,increased property crime and (and this is the only thing this lot really care about) crucified at the next General Election.

  • rate this
    +1

    Comment number 879.

    #834 removed for telling the TRUTH which has been proven over and over again. BBC moderators in someones pocket. Why won't the BBC investigative reporters check the facts

  • rate this
    +3

    Comment number 878.

    "342.
    yoinkster
    342
    People forget that child benefit was brought in to help families repopulate the country after a devastating war. "

    Indeed; it was called Family Allowance and, as so many forget or didn't know, it was NOT payable for the first child, only second and subsequent ones.

    An overhaul is long overdue, although the way this is being done now is not exactly fair or reasonable.

  • rate this
    +1

    Comment number 877.

    I so feel sorry for all those on £50k+ a year & losing child benefit

    NOT

    One thing, UK Tax regime is attrocious. It is pointless & waste of money to tax low paid into poverty & then employ hords of workers to pay back money via Tax credits & housing benefit.

  • rate this
    +2

    Comment number 876.

    It's a crazy world we live in where the government takes money from it's own people whilst sending money abroad to other countries.

  • rate this
    +1

    Comment number 875.

    If nothing else this just goes to show that if any gov puts up or down a tax or changes a benefit in any way then it will be highly criticised by some. Maybe running a country is not as easy as some posters would like to think.

  • rate this
    +1

    Comment number 874.

    Here is a point to ponder, whether you are pro or anti. Finnish child benefit is universal, irrespective of income, and generally, the more children you have, the more is paid in allowances, at a rate rather higher than that of the UK, from 104€ a month for the first to 189€ for the fifth or succeeding. Single parents get extra. How is it that the UK cannot afford what a small country can?

  • rate this
    +2

    Comment number 873.

    I don't approve of childbirth as a profession who does?
    So, what to do? I mean in a practical sense, not Daily Wail rhetoric.
    Seems to me that the lowly qualified girl from the sink estate has limited options.
    1. £5 ph at Tesco - so tax payers can subsidise their profits.
    2. Have kids as a means of securing accommodation that she'll never earn enough to afford
    Ideas on a postcard...?

  • rate this
    0

    Comment number 872.

    The policy is right but the implementation poor.
    Now it is time to move on to restricting child benefit and tax credits to two children only. On an overcrowded island on an overpopulated planet subsidising more is madness.

  • rate this
    0

    Comment number 871.

    Issue is misdirected; no one should get state cash benefits unless they are in need. And then, only for as long as their need lasts. Paying child benefit, tax credits, housing, disability or unemployment benefit has been a wrong turn and no more or less than simple vote buying. WONGA takes milliseconds to determine whether you qualify or not, government means testing could be just as simple.

  • rate this
    -2

    Comment number 870.

    I just e-mailed my MP thanking him for this change as it was the final straw that pushed us to emigrate. As soon as the house is sold we're off to Canada, and probably 50% of my friends have made the same decision. The UK may not be bothered about losing professional workers but plenty of other countries are welcoming skilled immigrants with open arms. Don't whinge, go elsewhere!

  • rate this
    +2

    Comment number 869.

    846 cantsilenceme
    looks as if they can!!

  • rate this
    +2

    Comment number 868.

    This is just a tax to pay for the immigration baby boom. Birth rates in this country have rocketed from 600,000 per year to 800,000 over the last decade as a direct result of immigration. As well as the massive increase in child benefit claims an additional £40billion is needed to provide additional school places. If the goverment is serious about making saving it should tackle the prime cause.

  • rate this
    +4

    Comment number 867.

    Child benefit !

    The tories are back in town eh ?

    Anyone know how much the so called 'Civil list' will be cut this year and the following ten ?

    Anyone still like to justify nuclear weapons ?

    Anyone care to explain where the oil and gas money went ?

    Child benefit ?

    You make me sick.

  • rate this
    +2

    Comment number 866.

    None of us like change which adversely impacts ourselves do we. It's unfair. And we can always find examples to highlight. How to resolve this? - stop ALL benefits. No benefits traps then.

    p.s. not advocating this as anything other than a starting point to think about reforming our out of control welfare system

  • rate this
    +2

    Comment number 865.

    I truly don't understand why people feel that the government should subsidize their life style choices. You should only choose to have children if you're economically stable enough to support them, if not it's your own fault. Birth control isn't expensive.

    Many families raise children on HOUSE-HOLD incomes half of the amount proposed here. People need to stop feeling entitled.

  • rate this
    +1

    Comment number 864.

    untill people in power stop treating people who have never paid into the NHS and social security but never seem to be on the radar for cuts.no one should be able to claim if they have not paid in.Britian is full of scroungers taking and not giving anything in return.the country cannot keep the caring society going as things stand .give to people who help create wealth !!!!!!

  • rate this
    -1

    Comment number 863.

    I can see from the ratings on the "Editors Picks" that this facist Tory government has brought out all the selfish, egotistical haters that love to look down upon anyone who needs assistance. These self appreciating pious frauds that come out of the woodwork to give their rightious stance on whom they think should have or have not. Dictating how many children a fellow human can have? Shameless

  • rate this
    0

    Comment number 862.

    "..we pay our way"

    The continuous whining for welfare payments for making personal chioces like having children, puts that into doubt. People who really 'pay their way' aren't continualy asking other people to subsidise them

  • rate this
    -1

    Comment number 861.

    Ahhhh, the millionaires keeping the serfs in line.
    I've given up our CB. I earn just over the £50k, by the time you allow for overtime and bonuses. I pay an extortionate amount of tax, my neighbours on the other hand, buy and sell cars, cannot work as they have 'bad backs', cycle some 60 - 70 miles a day, and no one cares.

    At least I know my £20 is fair though Dave

 

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