Child Benefit Reforms

Child Benefit Eligibility

We have already cut taxes for working parents but we need to go further to encourage more people into jobs and reward hard work. That is why I welcome the Conservatives commitment to raising the High-Income Child Benefit Charge threshold to £120,000 per year – a tax cut of £1,500 per year for many people across Castle Point.

Rebecca Harris

 

Reforms:

  • Ensuring the High-Income Child Benefit Charge is only paid by households with a combined income of more than £120,000 per year, up from £60,000 right now. We will also extend the taper rate – the point at which Child Benefit is fully withdrawn – to £160,000 per household. This will end the unfairness in the current system, especially for single parent families, benefitting 700,000 households by an average of £1,500 per year.

 

  • The Conservatives have already introduced reforms to support almost 500,000 families by changing Child Benefit, giving parents the choice to return to work. In the Spring Budget 2024, we raised the High Income Child Benefit Charge threshold from £50,000 to £60,000 and halved the rate so it is not paid in full until you earn over £80,000 – estimated to support nearly half a million families this year with an average gain of up to £1,260 towards the costs of raising their children. These changes have taken 170,000 families out of paying the charge altogether and the OBR have estimated that those already working will increase their hours by a total equivalent to around 10,000 full-time individuals by 2028-29.

 

  • We are cutting the double tax on work for 29 million working people this year, rewarding hard work across the country. Because we stuck to the plan and more than halved inflation, we have delivered a double tax cut to National Insurance for 29 million people. Our tax cuts put £900 back in the pockets of the average worker on £35,400 a year and £650 back in the pockets of a self-employed person on £28,000 a year.

 

Labour failed to vote for our cuts to National Insurance or changes to make Child Benefit more generous and now they want to hike up taxes on every working family by over £2,094 a year, taking our economy back to square one.