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It will be fully withdrawn where one parent earns above £60,000.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 1480.

    Working families where the majority of the income is through one earner are already heavily penalised by the tax system. This only makes it worse. One earner on £60k pays 40% tax and receives no child benefits. Two earners on £30k each pay lower tax and get the full child benefit.

    I have voted conservative all my life. No longer. Mr Cameron, you are a disgrace.

  • rate this
    +1

    Comment number 1479.

    Like everything these hopelessly out of touch Bullington boys do this policy hasn't been thought through and is unfair.They can't understand the difference between 1 earner on 50 k and a house hold on a combined 80/90 k,it's not even short change to them.Take away the benefit but equitably,other benefits are by household income,why not this one?

  • rate this
    +3

    Comment number 1478.

    Watch out: this is only the start. Tories and fairness like chalk and cheese. 2 * 49.9k get child benefit whereas 1*60 k doesn't. 1 *60k already pays more income tax than 2 * 30k so is penalised for striving. I bet there will be much more means testing. We are on the way to a Dickensian society with Toffs in charge. Scary stuff

  • rate this
    +2

    Comment number 1477.

    If CB is to end for those deemd to be 'wealthy' then do it fairly, based on family income, not on one partner's income.
    In other words, those families who have two working parents, whose joint income is above £60,000, should be equally penalised.

  • rate this
    0

    Comment number 1476.

    To the people claiming £50k is a vast amount of money and can be easily lived on. AFTER TAX and NI is taken off this is more like £30k. To put a child in nursery 5 days a week costs £1k a month, an average mortgage for a young family is about £1k a month, then theres the cost of commuting, etc.. I dont believe anyone should receive child benefit, however, believe me, £50k is NOT a fortune.

  • rate this
    +3

    Comment number 1475.

    Child benefit is not "money from the state", it is money from other taxpayers. Every penny paid in child benefit to families where one earner is earning over £50,000 (which is, lest we forget, twice the average wage) comes from the general taxpayer. Child benefit for wealthier families is a straight transfer from the poorer members of society to the richer, and it is right that it should stop.

  • rate this
    +1

    Comment number 1474.

    This does nothing to address those, for instance, who aim to engender new members of their religion, outnumber eventually all others, and then oppress them. (Not that any springs to mind, of course, but the Lebanon bears consideration).

  • rate this
    +1

    Comment number 1473.

    About time something was done about this. There are already over 7 billion people on this planet without paying people to have more. Camdude you are right GREED

  • rate this
    +7

    Comment number 1472.

    1463. cardiffblueblood
    "I am near the threshold for CB and my wife is under 35k
    3 kids under 8 and pay a fortune in tax so why not a little back seeing as I have used my unlimited talents to the benefit of my company and country unlike alot of ahem, spongers"

    You do get back, education for your kids, free healthcare et al... you're on circa 80kp.a. moaning about cb and you call others spongers?

  • Comment number 1471.

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

  • rate this
    0

    Comment number 1470.

    Brilliant comment!

  • rate this
    0

    Comment number 1469.

    1433.Andy_l

    What is complicated about ANY family with a COMBINED income of over 60k NOT qualifying for CB.

    1. The middle classes and their accountants won't tolerate the state snooping that the low paid endure when applying for benefits. Murky tax affairs.

    2. Cameron will not alienate and financially penalise TORY core vote!

    Nothing complicated about it at all.

  • rate this
    -1

    Comment number 1468.

    If you pay tax you should get the benefit simple.

  • rate this
    0

    Comment number 1467.

    Foolmeonce@1437

    Wages don't always follow the inflation short-term, but always do long-term. A generation from now 50K won't be an inspiring income, trust me.

    The chavs: I have no probs with low-earners or unemployed. However, there is a sizeable underclass of work-shy in this country (and many others). That's the chavs, who will never earn > 50K, because they will never EARN anything.

  • rate this
    +1

    Comment number 1466.

    I'm going to be honest but I don't have children & resent child benefit and working tax credits etc that go to people who don't need them. Families in genuine need I have no issues but if you earn £20,000p.a you should get NO help & those who do should should get nothing for any children they have after the first 2. If you can't afford kids, then don't bloody have them. I dont want 2 pay for them

  • rate this
    +1

    Comment number 1465.

    Not happy?...Then use your vote!
    When the unelected Tories got into power you must have known that they would reduce the deficit by screwing the less well off didn't you?
    the coffee is next to the bed...wake up and smell it?

    Coalition?, what coalition?
    Liberal's?, oh, that party died some time back.

  • rate this
    0

    Comment number 1464.

    "Child benefit cut is right, says PM "

    ===

    Well what else, pray, did anyone think he might say?

  • rate this
    -1

    Comment number 1463.

    i earn on the threshold for CB and my wife is a little under 35k
    I have 3 kids all under 8 and pay a fortune in tax, so why not a little back seeing ass I have used my unlimited talents to the benefit of my company and country unlike alot of , ahem, spongers

  • rate this
    +2

    Comment number 1462.

    Seems a lot of people are upset about this plan.
    IMO those already receiving this universal benefit should keep it.
    In the 1970s, we had two children,only got benefit for 2nd.
    People now getting benefit for 9+ children.
    Set up in 1970s was fairer, but government has run wild on waste for years. Many will now feel angry as we try to balance books overspend from more profligate times!

  • rate this
    +2

    Comment number 1461.

    This is great news.
    In fact if it was me I would of put it lower to 40,000 a year.
    Anyone who earns more than 30,000 a year is well of and requires no aid.
    Greed and decadence repulses me.

 

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