Child benefit reform plans scrapped

The authorities is scrapping a planned alteration to kid payment rules that would person allowed much parents to assertion the payment.

Currently kid payment is withdrawn erstwhile 1 genitor earns supra a definite amount, but the erstwhile Conservative authorities planned for claims to beryllium based connected household income from April 2026.

Chancellor Rachel Reeves made nary notation of kid payment successful her Budget code connected Wednesday, but the Budget document states that the projected alteration would outgo excessively overmuch to implement.

The contiguous strategy has been criticised arsenic unfair arsenic immoderate households tin assertion the outgo adjacent if their full income is much than that of a azygous genitor oregon a household with a sole precocious earner.

You tin get kid payment if you are liable for bringing up a kid who is nether 16, oregon nether 20 if they enactment successful approved acquisition oregon training.

Only 1 idiosyncratic tin assertion the payment for a child. The payments are £25.60 a week for the eldest oregon lone child, and £16.95 a week for younger children.

In April 2025, these volition spell up to £26.05 a week and £17.25 a week respectively.

However, payments are reduced erstwhile 1 genitor starts earning astatine a definite level, known arsenic the High Income Child Benefit Charge (HICBC).

In his last Budget successful March, erstwhile Chancellor Jeremy Hunt raised the income level astatine which radical person to commencement paying backmost portion of the payment from £50,000 to £60,000, and the level astatine which it is withdrawn wholly from £60,000 to £80,000.

He besides announced plans to determination to a strategy wherever the HICBC is based connected household income, not that of individuals, pursuing a consultation.

But the Budget papers published connected Wednesday said: "The authorities volition not proceed with the betterment to basal the HICBC connected household incomes. This is due to the fact that it would person travel astatine a important fiscal outgo of £1.4 cardinal by 2029-30 if mounting the threshold to £120,000-£160,000, wherever nary families would suffer out."

Father-of-two David Stuart had welcomed Mr Hunt's connection successful March, saying it would marque the strategy "fairer".

He said helium was disappointed astatine the determination to wantonness it, and astatine the information it was "buried" successful the papers and not included successful Reeves's speech.

David, who lives successful Whitburn, West Lothian with his woman and 2 children, present earns much than £80,000 truthful is not entitled to immoderate kid benefit. His woman is simply a self-employed kid minder and earns astir £10,000 a year.

"We don't needfully request the afloat payment," helium said. "But different mates [earning more] tin assertion the afloat happening and we can't assertion anything."

If helium and his woman could assertion portion of the payment, it could spell towards "putting wealth distant for the kids", helium said.

Laura Suter, manager of idiosyncratic concern astatine AJ Bell, said: "There’s nary uncertainty that it would person been a immense medication task for HMRC to measure couples connected their household income alternatively than sole income, meaning determination is nary casual fix."

By not going up with the change, though, "it means the strategy that punishes azygous earners volition remain".

The Budget papers besides revealed that the authorities would let employed individuals to wage their HICBC done their taxation codification from 2025, alternatively of having to taxable a aforesaid appraisal taxation return.

Ms Suter said this would amended the "admin side" of kid payment payments, which has been criticised for being confusing.

“However, that’s simply fixing 1 occupation with the strategy erstwhile successful world it needed larger standard reform. The complications successful the strategy mean it is underclaimed and not good understood."