Important changes to child benefit

Chancellor Jeremy Hunt made a significant change to the child benefit system in the spring budget on Wednesday.

Child benefit is a monthly payment which is worth at least £1,200 a year. People  can claim child benefit if they’re  responsible for bringing up a child who is under 16 (or under 20 if they’re in approved education or training). They  don’t need to be the child’s biological parent, you could be their grandparent, adoptive parent, foster parent, older sibling etc. 

Only one person can claim the benefit for each child, but there’s no limit to how many children you can claim for.  

The current way it works is unfair to many though, For example, a might  earn a combined income of £98,000 a year (£49,000 each) and get full child benefit, while a single parent family earning £60,000 a year wouldn't get any, and neither would a two-parent family with one earner getting £60,000 and over. 

There is also a charge for high income earners who get child benefit which means some of the most vulnerable households get hit, including:

• Households where one parent can’t work due to their own disability, illness or mental health
• Households where one parent is a carer for a child with a disability, illness or physical and/or mental health challenges
• Single-parent households

What's changing?

From April 6th of this year, the chancellor announced two crucial changes:

1. The high income child benefit tax charge is changing. You now won't have to pay any child benefit back until you start earning £60,000 a year (the current limit is £50,000 a year). According to the government, this is a change that 170,000 households from paying this charge.
2. You'll be able to earn up to £80,000 a year before you lose your child benefit entitlement completely (the limit £60,000 at the moment.)

It was also confirmed that a consultation will eventually happen which will examine whether to change child benefit eligibility to being based on household income, rather than on individual income, by April 2026.

Should I apply for child benefit now?

 If you didn’t get child benefit before to avoid the charges, you may now be able to start getting it.

You can use the government’s child benefit tax calculator to find out whether you’ll need to pay anything back. 

 How do I claim child benefit?

You can claim child benefit the day after you’ve registered the birth of your child, or once a child comes to live with you, e.g. if they’re adopted.

Child benefit can be backdated for up to three months.

You can make a claim online,  or claim by post and by phone.