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New Child Benefit Rules
Up to one million families could loose their child benefit as new rules introduced on January 7th 2013 aim to prevent high earners from claiming.
If you earn over 60-thousand pounds a year you will now lose the benefit all together. Those earning over 50 thousand will see the amount they recieve reduced.
The Treasury confirmed that around 200,000 parents opted out of claiming the benefit before the changes were introduced on the 7th January, but arround 800,000 families are known to have been affected. Those high earners who have not opted out of the scheme will still recieve the benefit but will have to pay it back in tax.
Current child benefit works out at £20.30 a week for your first child and then £13.40 for each child you have after that and it is usually paid until your children are 16 or 18 if they are in full time education.
It has been suggested that if a family who have 3 children lose the benefit it will be like getting a £4,000 salary cut, because the money is tax free.
Labour warn that the changes involve complicated self-assessment tax returns. Shadow Treasury minister Chris Leslie said: "These figures mean up to a million families now face having all their child benefit clawed back through complicated self-assessment tax returns at the end of the year. This is a costly administrative nightmare that could also lead to family rows as couples decide who takes the financial hit. And it's unfair too, because single earner families on #50,000 will have their child benefit cut while some couples earning as much as #100,000 keep all of theirs and millionaires actually get a tax cut."
HM Revenue and Customs chief executive Lin Homer said twice as many families had already opted out of receiving the payment than had been expected, and insisted the changes were going ``better than expected''.
The Treasury said 85% of the population will continue to receive child benefit as they do now while 90% would still receive some of the benefit.
Its been estimated that the administration costs of making the change is around £11 million but should generate £2 billion.
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