Child benefit changes
Prime Minister Mr Cameron has suggested that a new system might be proposed in the Chancellor’s March Budget.
From next year, child benefit is to be removed from any household where any adult earns above the higher-rate tax threshold of £42,745.
The move will remove Child benefit from about 1.2million families and save the Exchequer about £1billion a year. It is projected to cost a family with three children about £2,500 a year.
However a family with two people earning £40,000 – a total of £80,000 – will keep their child benefit while families where the mother is caring for the children, will lose out.
As far as we are aware the responsible government department is unaware of the possible change and they are proceeding as originally instructed… this raises concerns and questions about what the real position is and will we have a last minute – costly – reversal.
If there is to be no reversal maybe the Coalition Government should consider:
- Reducing the overall tax burden on families and allow them to spend more of their income.
- Phase in the changes so that families can reorganise their finances,
- This could be done by phasing it in – or out – over two years or reducing the amount paid over four years.
