Child benefit changes edge closer

0
943
child benefit changes

child benefit changesChild benefit changes will leave families where just one partner works and earns £60,000 with an income that is below average once taxes are taken into account, surprising new analysis has shown.

The controversial reforms, set to come into force from January next year, will affect more than a million families across the UK, according to the Christian Action Research and Education (CARE).

Child benefit can go a long way and gives us the flexibility to provide our kids with things that might ordinarily be beyond our reach.

Whether spent on clubs for the children, days out with the family or purchasing essentials like school uniform, the extra money makes a real difference.

What we know

Under the Government's reforms, no one earning over £60,000 will be able to claim child benefit and those earning between £50,000 and £60,000 will be subject to a new High Income Child Benefit Charge, which gradually reduces the amount of child benefit the better off receive.

Currently, a one-earner couple with two children with an income of £60,000 pays income tax of £13,950. In comparison, a two-earner couple, each earning £30,000, pays £8,768 of income tax.

But after the Government's new High Income Child Benefit Charge is added, the one-earner couple's tax bill rises to £15,667 - £6,899 more than that of the two-earner couple.

How will the changes affect me?

Working out how you will be affected by the changes can be difficult to get your head around, but it is important to take time out to see what they mean for you.

With the new child benefit changes, both you and your partner can earn up to £50,000 a year each and you will still receive your full amount of child benefit - £20.40 for your first child and £13.40 for each of your other children.

If either you or your partner are between the £50,000 and £60,000 mark, you will receive your child benefit, however, you will have to repay some of this via a charge in your tax returns. The more you earn, the greater the charge.

If you or your partner earns more than £60,000 a year you will lose your child benefit. However, it is not that simple.

You should still apply for child benefit as this will have impact on your National Insurance credits and your future entitlement to state pension.

Unfortunately, you will be required to pay back the full amount as a charge in your tax returns.

NO COMMENTS