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Child benefit is claimed by nearly all families with children, regardless of their income.

It is one of the few non-means-tested benefits left but now Chancellor George Osborne has announced it will be axed for better-off parents from 2013.

What has been announced?

From 2013, the coalition government will withdraw child benefit from families where one or both parents are higher-rate taxpayers

Chancellor George Osborne said the measure would affect people earning more than £44,000 a year.

That means people in the 40% income tax bracket, and those whose taxable earnings are above £150,000, who therefore pay the new 50% additional rate of income tax.

There are an estimated 3,274,000 individuals who will pay tax at these levels this year.

The proposal means if both parents earn less than £44,000, they will continue to receive child benefit. But families with one main earner on, say, £45,000, will see their benefit stopped.

Mr Osborne said it was not a decision they had "taken lightly".

"It's a big decision for us, but we think it's absolutely necessary and fair, given the financial situation we face," he said.

Who will be affected and how much will it save the Treasury?

The Treasury says about 15% of families will lose out. In real terms, this means 1.2m families will be affected, but 6.6m will see no change to their child benefits.

The Treasury claims the child benefit bill is about £12bn a year, and the cutback will save £1bn annually.

How could the government stop higher earners claiming?

Mr Osborne has suggested that any higher-rate taxpayers in receipt of child benefit may be asked to declare this fact on their self-assessment tax returns, implying they would then face an extra tax charge.

It might be simpler for HM Revenue & Customs (HMRC), which administers the child benefit system, simply to cross-reference claimants against their tax records.

The child benefit claim form already asks for full details of a spouse or partner.

Even simpler would be to put a warning at the bottom of the form, warning higher rate tax payers that they are no longer eligible and they might be prosecuted if they still claimed.

What is clear is that the government announcement has taken HMRC by surprise.

"The nitty-gritty will be decided; we don't have any details yet," said an HMRC spokesman.

How much is child benefit?

Child benefit is worth £20.30 every week for a first-born child.

For each subsequent child, there is an additional weekly payment of £13.40. The money is not taxed.

In June's emergency budget, after the general election, Mr Osborne announced child benefit would be frozen for three years.

Who can receive it?

It is available for every child in the UK below the age of 16; child benefit is paid to the parent directly responsible for care of the youngster.

You may get child benefit if you pay towards bringing up a child who does not live with you if no-one else is claiming the benefit for them.

Those in full-time education remain eligible until the age of 19, but the cut-off point for children registered for work or training is 18.

How many parents claim it?

Child benefit is taken up by 96-97% of the eligible population, according to the most recently published HMRC statistics.

Which department administers the benefit?

HMRC is responsible for the administration of child benefit; previously it was overseen by the Department for Work and Pensions (DWP).

Whose idea was it?

After World War II, bringing up several children was encouraged to restore the birth rate.

And in 1945 the Family Allowance was introduced to provide benefit for second and subsequent children.

In 1975, then Labour Social Affairs Secretary Barbara Castle put forward the Child Benefit Act, proposing additional benefit for the first child.

And between 1977 and 1979, child benefit replaced the Family Allowance and Child Tax Allowance.

What has this got to do with child tax credits?

Nothing. That is an entirely different and more complicated system introduced by the last Labour government.

Where can I get further information?

Contact the Child Benefit Office inquiry line (Great Britain residents): 0845 302 1444/ Textphone: 0845 302 1474.

Northern Ireland residents, telephone 0845 603 2000
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#2
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Did I read somewhere that this wouldn't affect people on dla? or does that mean parents/earners on dla?
Mum to Sam (7) Opitz G/BBB syndrome, bronchiolitis obliterans, supraventricular tachycardia, autism. "I am first and foremost, a child"


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