Child benefit to be scrapped for some families

Higher taxpayers to lose child benefits from 2013

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Parents who pay more than 40% tax currently will lose their child benefits from 2013 in a change to the system to help lower income families, the Chancellor George Osbourne has revealed.  

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Parents who earn over £44,000 per year pay 40% of their earnings to tax, and they would be the families affected by the Government’s plans.

“It’s a big decision for us, but we think it’s absolutely necessary and fair given the financial situation we face,” George told BBC One’s Breakfast.

The Chancellor explained that he felt the public would accept that it’s unfair to tax someone earning £18,000 per year to pay child benefit for a parent earning £50,000.

Currently all families with children receive child benefit, with £20.30 per week given for the first child and £13.40 for any other children.

“It’s very hard to justify taxing people on much lower incomes in order to pay the child benefit to some of the better off in society,” explained George.

The cuts will affect homes where just one parent earn over £44,000. However, if both parents earn less than £44,000, they will still receive child benefit. This means a couple could earn a combined income of £87,750 (as reported by the BBC) and still get the benefit as long as both of them earn under £44,000.

This change to the benefit system is set to save about £1 billion.

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