Policy and Politics
Cameron hints at re-think for child benefit proposals
Plans to scrap child benefit for families with one parent earning more than about £42,000 a year could be amended.
The controversial proposals, which are due to be introduced next January, have been criticised as unfair because they are based on individual parental income, rather than household income.
Under the plans, families with both parents earning just under the higher-rate tax threshold, (currently £44,000 a year, but due to fall to £42,000 a year,) with a household income of more than £80,000 a year would keep the benefit, but a family with one parent earning just over the threshold would lose it.
In an interview with Parliament’s House Magazine, David Cameron hinted that he had some concerns with how the proposals would work.
‘Some people say that’s the unfairness of it, that you lose the child benefit if you have a higher-rate taxpayer in the family [but] two people below the level keep the benefit,' he said.
‘So, there’s a threshold, a cliff-edge issue. 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.
‘But again, I don’t want to improve on the Chancellor’s budget.’
It’s estimated that the proposals to change child benefit would affect 1.2 million families and save up to £1bn a year.
Dr Katherine Rake, chief executive of the Family and Parenting Institute, said, ‘Concerns were raised that the Government’s original child benefit reform proposals would usher in an unfair penalty for many single earner couples. The Prime Minister is now indicating his willingness to listen to these concerns, and that should be warmly welcomed.
‘But the great advantage of universal Child Benefit is that it is both simple to claim and simple for the Government to administer. Any reform runs the risk of spending as much on bureaucracy as it saves on child benefit payments.’
