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The latest changes to Child Benefit

3rd May 2024

More families in the UK will now be eligible for Child Benefit payments due to a recent increase in the income threshold announced in the Budget. This change, which took effect on 6 April 2024, is expected to benefit a large number of families.

Who qualifies for Child Benefit and what are the new rates?

Child Benefit is available to individuals responsible for raising a child who is either under 16 or under 20 if they are in approved education or training. Only one person can claim the benefit per child, but there is no limit to the number of children for whom you can claim.

The new rates for Child Benefit, effective from 6 April 2024, are:

Child Benefit is typically paid into a designated bank account every four weeks. However, if you are a single parent or receive certain other benefits, such as Universal Credit, you can opt to receive payments weekly. You can check your eligibility and calculate your benefit amount using the HMRC Child Benefit calculator.

What are the recent changes to Child Benefit?

The latest Budget brought significant changes to the income thresholds affecting Child Benefit. Previously, Child Benefit was completely withdrawn when one parent earned more than £60,000 annually. This threshold has now been increased to £80,000.

Reduction of payments begins when one parent earns more than £60,000, a threshold that was previously set at £50,000. The reduction occurs due to the High Income Child Benefit Charge (HICBC), which has faced criticism for unfairly impacting single parents and families with a single high earner.

For example, a household with two parents each earning £60,000, for a total household income of £120,000, can receive the full child benefit. However, a household with one parent earning slightly more than £60,000 will see their child benefit reduced, with complete withdrawal once the income exceeds £80,000.

In the Budget, it also announced that there would be a consultation on allowing HMRC to collect information about all adults in a household with a child. This could lead to changes in how Child Benefit is calculated, with the potential for it to be based on total household income instead of the highest earner’s income by April 2026—a move that has generally been welcomed.

If you have any questions on how the changes might impact you or need advice relating to tax or payroll, please don’t hesitate to contact our friendly team.

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