Child benefit reform could hamper families

child holding parents hands for support

child holding parents hands for supportChild benefit can help us parents to top up our monthly incomes, ensuring our budgets stretch as far as they need to.

However, the full implications of planned child benefit reforms for higher rate taxpayers have now been revealed, and the news could be bad for some families.

Child benefit cuts being planned by the Government could face those whose incomes rise above the current 40% tax threshold (about £43,000). Figures indicate that families with three children, where one parent's earnings fall just above the threshold, might see their benefits lowered by £2,500.

Meanwhile, another couple where both parents each earn just under £43,000 and enjoy a total household income of more than £80,000 will keep all their benefit!

So what does this mean for us and how can such disparities be justified?

Well, speaking to The House magazine, Prime Minister David Cameron admitted the proposed child benefit reforms may have a sharp impact on some UK families.

He conceded: "There's a threshold, a cliff-edge issue."

But Mr Cameron added: "We always said we would look at the steepness of the curve, we always said we would look at the way it's implemented and that remains the case."

Check out this handy guide to learn more about the basics of child benefit.