Child benefit to be axed for those earning over £44,000 a year

2 min Read Published: 05 Oct 2010
graur razvan ionut / FreeDigitalPhotos.net
graur razvan ionut / FreeDigitalPhotos.net

 Child benefit is to be axed for higher rate taxpayers from 2013, Chancellor George Osborne has told the Conservative Party conference yesterday.

 

 

 

 

Key points 

The key points of the announcement are: 

  • Child benefit will be withdrawn from families where one or both parents are high-rate tax payers. This will affect people earning more than £44,000
  • The cuts could affect over 3.2 million people
  • However,  if both parents earn less than £44,000 they will still be able to claim child benefit

 Ludicrous position

 Now as I tweeted yesterday the government’s decision to remove child benefit for high earners should not come as a shock to anyone. ‘Austerity’ is the word of the moment and the proposed cuts will apparently save HM Revenue & Customs (HMRC) £1bn annually.

 However, based on the details announced by George Osborne it would appear a family where both parents earn £44,000 per annum, i.e. £88,000 in total, will still receive child benefit. But a family with just one working parent earning £45,000 would see their child benefit axed.

 So in effect a family who has taken the choice of one parent forgoing their career to bring up their children rather than pack them off to a child minder will effectively be penalised. Absolutely ludicrous if you ask me!

 The BBC quote Mr Osborne as saying "It's a big decision for us, but we think it's absolutely necessary and fair, given the financial situation we face."

 He defended the aforementioned anomaly by saying his plan was "the most straightforward" option - which would avoid across-the-board means testing. The alternative was to introduce a "complex" system of means testing where all households had their incomes assessed.’

 Further information

 The BBC has compiled a handy Q&A on the proposed cuts. Click here.

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  1. I agree in a way but from a different standpoint. To the previous reply – earning £45K or more is not exactly the most disadvantages position to be in. That said, it is not right that some can earn almost double the amount and still be entitled to child benefit. It should be the family income that is looked at, not an individual’s. It would be much better to have more of a sliding scale – i.e. you get a little less child benefit the more you earn, without being a sudden cut-off point from the full amount to nothing.

  2. I have to agree with you , i think its bloody disgusting that families who choose to stay at home on one wage to look after their children , are being penalised yet again …. Once again its a kick in the nuts for the people who work hard …hope it makes you happy Osbourne .. what a shame us mums cant go out on strike as this seems to be the way forward … but we cant because the country truly would come to standstill !

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