Child benefit tax threshold would be doubled under Tory promise: what would this mean for families?

More households will be eligible for higher child benefit payments if the Conservatives remain in government after July 4, as the party has pledged to double the threshold to £120,000 per household before it is taxed.

Child benefit is paid to parents or those responsible for raising the children. The current maximum payments are £25.60 per week for a first child and £16.95 for additional children.

But child benefit has been a controversial issue since 2013, when former Chancellor George Osborne changed the system so that households earning more than a certain amount get less or none at all.

Here you can read everything you need to know about the planned changes to child benefit and what consequences they may have for you.

What is the current controversy surrounding child support?

The issue concerns the high income tax for child benefit, which was introduced by George Osborne in 2013.

The current version of this system is that when a parent earns £50,000, child benefit payments are reduced, disappearing completely if they earn £60,000 or more.

But the problem with the system is that it penalizes single parents and couples with one high earner.

If two parents earn £49,000 each – just £1,000 below the current threshold – they would receive full child benefit and a household income of £98,000.

But if one parent earns £60,000 and the other earns nothing, the family will receive no child benefit at all.

The Conservatives plan to increase that minimum threshold to £60,000 in 2026, if they are still in government, with child benefit benefits eroding to a maximum salary of £80,000.

What are the latest changes in child benefit?

The Conservatives have now promised to increase the income level at which child benefit is withdrawn to £120,000.

The other big change is that this limit applies per household, and not per individual.

Households can earn up to £160,000 before they stop receiving child benefit altogether.

This means that a single parent can earn up to £120,000 before he or she starts to lose child benefit, and a married couple can have different salaries and still retain full child benefit, as long as their joint wages do not exceed that level.

Who benefits from these changes?

The Conservatives say 700,000 families would be better off with an average of £1,500 each.

The party believes child benefit adjustments will cost £1.3 billion a year between 2029 and 2030.

Alice Haine, personal finance analyst at Bestinvest, said: ‘Doubling the threshold at which high-income child benefit applies to £120,000 from £60,000 and doubling the top taper – the point at which the benefit is completely withdrawn – to £160,000 from £80,000 would provide a financial boost to parents who are currently missing out on this valuable benefit.

‘Even more important is the promise to base benefits on total family income rather than that of the highest earner.

‘This will end the unfairness of the current system, which penalizes single parents or couples where one partner earns a significantly higher salary than the other.’

Why is it controversial?

High-income child benefits have been a problem for the Conservative government for more than a decade, and plans to change this have only emerged in the run-up to the election.

Danni Hewson, head of financial analysis at asset manager AJ Bell, said: ‘Many voters will wonder why this could not have happened at any other time in the last fourteen years, during which time income tax and inflation thresholds have been frozen. gnawed away at family incomes.

‘The government can point to its more recent track record and expanding free childcare will have helped families – particularly mothers who have struggled to return to the workplace.’

Other experts said the best solution might be to stop interfering with child benefits and return to making universal payments, as was done before 2013.

Tom Waters, deputy director at the Institute for Fiscal Studies, said: ‘Raising the threshold to £120,000 and moving to a household assessment would mean that only 900,000 families – 12 per cent of those with children – would still receive some or all would lose their possessions. their child benefit. This does mean that the problems affect fewer people.

‘But at the same time you have to wonder whether it is really worth having an additional administrative apparatus, instead of simply making child benefits universal again, as was always the case before 2013. This would cost an additional £1.5 billion per year. year on top of the Conservatives’ plan.’

How do you apply for child benefit?

You can apply for child benefit or add another child to your application with Gov.ukonline or by downloading and completing a printed form.

Payments are made every four weeks on Monday or Tuesday, but you can be paid weekly if you are a single parent or receive other benefits such as Universal Credit.

You are expected to report anything that may affect your child benefit, such as changes in your household or if you move abroad.

If a family splits up, only one person will still receive €25.60 per week for the eldest child, but if there are two children living with different partners, they will both receive €25.60 per week. For other children the amount remains €16.95.

If you have a blended family, only the eldest child will be eligible for the rate of £25.60 and all other children will be eligible for the rate of £16.95.

If you apply for child benefit for a child, the child will automatically receive a citizen service number shortly before it turns 16.