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It will be fully withdrawn where one parent earns above £60,000.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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  • Comment number 1020.

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

  • rate this
    +7

    Comment number 1019.

    1006: "Looks like no summer holiday this year."

    In other words - ChB pays for my holidays.

  • rate this
    +6

    Comment number 1018.

    the amount of people on here complaining they are going to lose child benefits when they earn so much money is shocking, between me and the g/f we earn around £35,000 and we manage to get by with a lot less than they earn. THEY NEED TO GET A GRIP

  • rate this
    +2

    Comment number 1017.

    @996, Child's benefit etc were introduced to allow the housewife/mother to actually spend money on children, that the wage-earning male would, they thought, otherwise spend on drink/cigs/gambling/etc.

    Rising living costs then morphed it into just helping pay for kids. Anyone who thinks £13/wk supports a child is kidding themselves.

    Reform is needed, but lets start with the tax system...

  • rate this
    -1

    Comment number 1016.

    Those on benefits who have children who they cannot pay for should be given tokens rather than money.. Such tokens could be redeemed in supermarkets for food, childcare etc.... People will then think about not having more kids as they are not actually getting money that can be used on things that are not essential for their children. See how long it takes them to go back to work not long

  • rate this
    -2

    Comment number 1015.

    A major problem with this is not only is it blatantly unfair, but it seems complicated for HMRC to administer. Mistakes will almost certainly be made. The performance of the already over-stretched HMRC could also be adversely affected in other areas as a result of having to take on this new workload.

  • rate this
    0

    Comment number 1014.

    Look, no tax is fair.Is it fair someone 1£ above threshold goes in to a differnt rate, no! is it fair that people who choose to be without kids have to subsidise those that want them, etc etc. What is perverse is the Balls approach...so child benefit changes which will hurt the better off are wrong, but taxation changes which will hurt the better off are fine. He makes it up as he goes along!

  • rate this
    +3

    Comment number 1013.

    1007.Conner De Public

    "Make no mistake,these cuts won't just stop at the rich.
    This is just the start of the dismantling of the welfare system."

    Have you been living in the UK for the last two years?

  • rate this
    +2

    Comment number 1012.

    Cameron being the tough guy again although there has been little protest about this issue only the way it is implemented using individual income instead of family income. Hunt is condemning the NHS staffdeflecting criticism of gov by blaming them for all the problems instead of the major issue of cuts affecting services since they cut the money causing a decrease in front line staff.

  • rate this
    +1

    Comment number 1011.

    " I thought DC was all about saving the family but I am worse of staying with my partner. How is this fair and how does it promote family life!"

    Boo-bloody-hoo - if you're on £50+k you've got a damn' nerve expecting the State to subside you breeding.

  • Comment number 1010.

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

  • rate this
    +13

    Comment number 1009.

    I have 2 children and earn over 50k a year and it's more than enough money. Greed is the only motivation of people moaning they are going to lose their child benefit.

  • rate this
    0

    Comment number 1008.

    i feel we should support people who are ill, disabled, made redundant, or are on a low wage, as it could happen to any of us, i think you should have to work in this country before you are entitled to any benefits, for some people its not worth a job as they would lose too much money, and they would have to get rid of their cars, yet the people who pay for this are slagged off, get real.

  • rate this
    +2

    Comment number 1007.

    Make no mistake,these cuts won't just stop at the rich.
    This is just the start of the dismantling of the welfare system.

  • rate this
    -2

    Comment number 1006.

    I earn approx £55k, my wife does not work since we had kids. A family with 2 earners with much more modest salaries of around £22.5K each are already far better of than us as they pay less Tax and yet we are told we are the in the top 15%.
    The average UK salary is £26.5K, so actually our household income places us in the bottom 50% of earners. Looks like no summer holiday this year.

  • rate this
    -3

    Comment number 1005.

    I always saw child benefit as a recognition of the high costs attributed to having children. This cut for people earning over 60K, which in London is not a massive salary, is yet another tax on having children, as is council tax which does not take into account the square footage per person, but is based on 2 adults. Most families with children will try to move to bigger places - and are taxed!

  • rate this
    +4

    Comment number 1004.

    I notice that when I bring Class into the discussion people want to quickly shut you down.
    And that is because they know that this is what it's really all about.. Divide and Conquer.And when we all start realise that they have been pitting us against eachother...There will be Hysteria!

  • rate this
    +4

    Comment number 1003.

    513.hellhesk
    My husband earns £50k then bonuses. Our daughters nursery fees are £900 a month. I currently work full time on a good salary. We have another one on the way. We need to move to a house suitable for a larger family.
    ***
    Presumably you've heard of contraception and/or children sharing bedrooms? You don't *need* to move, you *want* to move. Big difference.

  • rate this
    +3

    Comment number 1002.

    Has David Cameron started to dye his hair?

  • rate this
    +5

    Comment number 1001.

    I think child benefit should be done away with completely. Our population is healthy enough so we shouldn't subsidise having children for anyone.

 

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