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It will be fully withdrawn where one parent earns above £60,000.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 960.

    I like the basic idea but I think it should be based on household income, not an individual parent's income.

  • rate this
    +1

    Comment number 959.

    This is as fair as the Poll Tax was.

  • rate this
    0

    Comment number 958.

    At the next election only an honest, truthful and caring candidate will get my vote. Guess what Cameron - it will not be you

  • rate this
    +6

    Comment number 957.

    This lot really are a shambles. Cut Welfare benefits and demonise the poor. Tory voters love this! Cut Child Benefit in a perverse way that no one can comprehend. Tory voters hate this! Dave seems to be able to upset all the people all of the time..unbelievable.

  • rate this
    0

    Comment number 956.

    920.brownbear

    I totally agree, but this was and is cold cynical electioneering. saves peanuts but gives the impression "we are all in this together"

    Carmeron will not modernize the tax system nor the fairness of CB, the tories do not want to lose their hardcore support in the home counties. They obviously decided it was worth gambling with the other 25%

  • rate this
    +2

    Comment number 955.

    911. insert_name_here

    Doesn't take much to get people at each others throats, does it?
    --------
    You're right.

    We have a annual tax gap of anywhere between £35 billion and £100 billion and we do nothing.

    When is an entitlement not an entitlement? When it's mine?

    Can't see further than the ends of our noses can we?

    Short termism greed and £lobby ridden politics is killing this country.

  • rate this
    0

    Comment number 954.

    Problems with "Child Benefit" that need addressing:

    Entitlement to child benefit can be extended from 16 to 18 years of age and in some circumstances aged 20. A person aged 18 - 20 is NOT a child. IF benefits are to continue it should be reclassified at aged 18.

    Child Benefit for those with three children and more should be reduced on as incremental scale. eg Six children = no Child Benefit.

  • rate this
    +3

    Comment number 953.

    I wonder if Mr Cameron Senior ever collected child benefit for Mr Cameron Junior?

  • rate this
    +4

    Comment number 952.

    @899 ioioos..."people breeding as a means to support themselves"

    You make your fellow human beings sound just like animals. Do your parents plan to hand back the family allowance they claimed to support you and your siblings? You make anyone that has children sound like organised thieves. I suppose you don't want to fund hospitals or schools either as you are never sick and are so knowledgable.

  • rate this
    +10

    Comment number 951.

    It amazes me how many of you earning over 50k are moaning. Do you know how many people live on basic salary and in tiny flats??
    Amazing. You people are so spoiled. David Cameron is right.

  • rate this
    -1

    Comment number 950.

    Its easy to give to somebody than it is take away. Equal blame should lie with those who gave when the nation had to borrow to do it.

  • rate this
    +7

    Comment number 949.

    It is perverse that anyone earning £60,000 or more should be in receipt of any state benefit at all.

  • rate this
    +3

    Comment number 948.

    @UKstinks

    Daily Wail is that way ->

    We prefer (mostly) sensible discussion on here, not the deranged rantings of a man who had a bit too much liquid with his lunch. So tell me, how do they manage to buy all that on £71/week?

    You forgot to mention the 51" plasma TV by the way.

  • rate this
    -1

    Comment number 947.

    The more I see Balls, the more I want to throw a brick at the TV.

  • rate this
    +6

    Comment number 946.

    Whilst I disagree with most of the targeting of the cuts so far, this one i can understand.

    If I was earning 50k a year, I wouldn't expect child benefit. We have people struggling to make ends meet and their help is being cut, and i bet they feel the pinch a hell of a lot more than someone on 50k losing child benefit.

  • rate this
    0

    Comment number 945.

    @929, I'm not calling to call false on you, but I have to ask, how do you know they have no jobs etc?

    @932, because they're happy to do their bit, as long as they don't have to feel it.

    @931, They don't think partners should share their financial details. This ignores the fact that the single earner might find they have a higher tax bill as a result of their partner's CB.

  • rate this
    +1

    Comment number 944.

    This chimes all too clearly with other cuts which are disproportionately affecting families with children, whether that's cuts to child tax credits, education maintenance allowance, or childcare support. And all this from a government headed by a prime minister who once pledged to make Britain "the most family-friendly country in Europe."

  • rate this
    +1

    Comment number 943.

    I am the father of 18 month triplet daughters. I work in London and although I earn over £55k have just been hit with a 5% rise in my season ticket which is now £5k a year. Childcare is not an option for us as my wife would not earn enough to cover the cost. The daft inequality of this change means that once tax is taken into consideration we will be better of if I take a local job a £40k.

  • rate this
    +5

    Comment number 942.

    918.Btf "only have kids if you can afford them"

    Society's structure was dealt a lethal blow by Thatcher when she deliberately chose to destroy blue collar jobs in the 1980s. This directly led to the kids-on-benefit-culture and kids-for-religiously-alternative-groups that have a stronger family culture. This was predictable at the time.

    The idiots who drove the asset/debt bubble ended it!

  • Comment number 941.

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

 

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