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It will be fully withdrawn where one parent earns above £60,000.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
    +2

    Comment number 1500.

    There should be NO child benefit. Why should taxes pay for those who choose to have children? The money saved would be better invested in education - and improving their life chances - rather than the pockets and spending of their parents. I will now hears cries about those who 'need' it - well, the fault lies with the lack of a living wage. Let's do something about THAT.

  • rate this
    +3

    Comment number 1499.

    I've just watched the Epstein (on 100 grand) clip, and read @1463 cardiffblueblood on, it would seem, the same amount or more. Both bemoaning their loss of CB.

    Are we in ultra heavy irony territory here. Do we have two people mickey-taking or what.

    Maybe they should see a doctor and use the words persecution complex.

    Or an accountant and use the words grossly imcompetent money management.

  • rate this
    +1

    Comment number 1498.

    At least this policy is in line with their other forms of governance - completely unfair for the majority of people, with little impact on the living standards of the overly rich 'elite' (minority) of our society.

  • rate this
    0

    Comment number 1497.

    Igor @ 1467
    Thanks for clarifying. I wouldn't necessarily disagree with you when you put it in those terms although I'm not a fan of the use of the word 'chav' for any group.

    One thing that does worry me though is that I'm not so sure that incomes will regain parity with inflation anytime soon. This govt seems intent on driving down wages and incomes and attacking workers rights.

  • Comment number 1496.

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

  • rate this
    -1

    Comment number 1495.

    My husband earns c.£57k & I'm a stay at home Mum. How is it OK that a household with a combined income of nearly £100k keep all their child benefit? How can it be OK that I would be financially better off as a single parent? We are not greedy, just angry & disappointed that this government fails to support marriage, and treats parents who stay at home to bring up their children with contempt.

  • rate this
    0

    Comment number 1494.

    I don't know why the PM bothers going on the Andrew Marr Show. Marr IS the show and he never listens to Tories. Is he paid for every irritating interruption he makes?! I switched off two minutes in.

    I like the new moped though. Saves us some cash - or would it have been cheaper to keep the old titles? Where he sweeps in driving a sports car like James Bond. Licensed to spend license fees.

  • rate this
    +4

    Comment number 1493.

    I appreciate Osborne has about as much credibility as my pet hamster.
    .
    But you would have thought even Gideon could work out that if 2 individuals in a family on £30K a year pay £8,000 and 1 individual on £60 pays £13,000 in tax the former couple are already £5,000 a year better off than the latter.

    Has He got His cunning plan the wrong way round or is He just a ********* idiot?

  • rate this
    +2

    Comment number 1492.

    @MartinH

    '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.'

    Too funny. Will nobody think of the families where one earner is on 150K having to pay 50% tax whereas his next door neighbours where both are on 149K only pay 40% tax.

    Not so funny now is it public sector managers?

  • rate this
    +2

    Comment number 1491.

    This increased benefit was all a vote winning bribe for parents when the country could afford it and now we are broke. Average wage is £26k in this country and the levels affected are double. No problems with this, if you can't manage on £50k then economise, anomalies not withstanding

  • rate this
    0

    Comment number 1490.

    Cameron: "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."

    Cameron again: Asked about government plans to cap working age benefits at 1% Cameron said "those are all in my view absolutely right decisions".

    Ha Ha Ha Ha Ha

  • rate this
    -1

    Comment number 1489.

    zodiac58 @ 1452

    Unfortunately, not everyone lives in the North. And not everyone has bought their house (or inherited a house bought) before the government-propped bubble of epic proportions.

    So, for some people 50000 is a lot less than for you and me.

    This limit (if at all) is unfair unless varied geographically. But this would be beyond the brain power of the current Con leadership.

  • rate this
    -4

    Comment number 1488.

    There is some real bitterness towards the ones who have worked their way up to earn 50K. We are not rich, if that is so why can't I do nothing all day, own a pony, flash car etc? I work as a dinner lady to buy my clothes and any extras. We don't go on foreign holidays every year, we don't go out! I have always worked when my older 2 children were little, at one time had 2 jobs.

  • rate this
    0

    Comment number 1487.

    These changes are needed but could have been better implemented. I dont see how its too hard to calculate peoples benefits based on total house in come instead of individual salaries.

  • rate this
    0

    Comment number 1486.

    I'm non-resident for tax purposes but with a resident wife and family, so we dont have to opt out or be penalised, but we have because we think its the right thing to do in the UK's current situation. However, if the government is serious about cost saving, it must also close all government/civil service final salary pension schemes - these are not sustainable in the 21st century.

  • rate this
    +2

    Comment number 1485.

    1461. brummie123: This is great news. Anyone who earns more than 30,000 a year is well of and requires no aid. Greed and decadence repulses me.

    Why not 25k? Or 20k? Who are you to decide? What about regional differences? Maybe you are being greedy but you don't realise?

    Ignorance repulses me.

  • rate this
    +3

    Comment number 1484.

    The Child Benefit cut is lazy policy making at it best.

    Instead of a means approach we have an artibitary threshold that creates disparities between people with similar wealth.True, it avoids admin costs but is not fair and sends a message that the value of child rearing in the eyes if the state is diminished.

    As mostly Tory voteres will be hit by this, the policy won't pay well at electon time.

  • rate this
    0

    Comment number 1483.

    It occurs to me that all the moaners here are those quite high earners who constitute the mean penny pinching middle classes. I remember putting up a marquee on a council estate for the Queens Jubilee we got a cup of tea and a bit of cake as a thank you. Later that day at a luxury home in Ascot asking for a drink (it was a very hot day) we were told there was a tap round the corner, says it all

  • rate this
    +3

    Comment number 1482.

    The higher earners contribute more. They draw on less government support. Some of the posts here would have you believe they are terrible people and those making them should be thoroughly ashamed of themselves.

  • rate this
    0

    Comment number 1481.

    I think a lot of families earning over £60k would be happy to give up child benefit if the policy was being applied fairly to a joint family income. The government are slowly dismantling any form of welfare state for all of us apart from the super rich and we would all do well to take look at what they are starting to do to the NHS - that will be next on the agenda

 

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