Child Benefit changes explained in full as thousands of families better off
A major shake-up to Child Benefit that will help thousands of families was confirmed in the Budget this week.
Child Benefit is a monthly payment made to someone who is responsible for someone under the age of 16, or under the age of 20 if they're in approved education or training. Under current rules, you’re eligible for the full amount of Child Benefit if you earn under £50,000 a year. Once you start to earn over this amount, you have to pay back 1% of the Child Benefit for every £100 of income you earn above £50,000 a year. Earn over £60,000 a year and you'll need to pay back 100% of your Child Benefit
This rule is known as the so-called "High Income Child Benefit Charge" and it has been criticised by campaigners as it means technically a couple could earn just under £100,000 a year between them, providing they both earn under £50,000 a year each, and get the full amount of Child Benefit.
But a single parent earning £60,000 a year would miss out completely on Child Benefit. If you find you're subject to the "High Income Child Benefit Charge" then any money you need to pay back is normally settled through self-assessment. In his Budget this week, Jeremy Hunt revealed plans to address the "unfairness" in the current system and confirmed new changes that will take effect soon.
How is Child Benefit changing?
The Chancellor confirmed the lower limit for when Child Benefit begins to be tapered away is rising to £60,000 a year from April 6. This means you won't have to pay any of your Child Benefit back until you start earning £60,000 a year.
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The higher limit is being increased to £80,000 a year. This means you'll be able to earn up to £80,000 a year before your Child Benefit is stopped completely. It is estimated half a million higher-earning parents will lose less of their Child Benefit as a result of these changes – and 170,000 will have it all reinstated.
The Chancellor has also confirmed there will be a consultation on whether Child Benefit should be based on household income, rather than on individual income, by April 2026.
How much is Child Benefit worth?
Child Benefit is currently worth £24 a week for your first child, then any other child you have qualifies for £15.90 a week each. These amounts are due to rise to £25.60 and £16.95 a week in April.
Who is eligible for Child Benefit?
To claim Child Benefit, you need to live in the UK and be responsible for someone under the age of 16. This usually means they live with you, or you pay at least the same amount as Child Benefit towards looking after them. Only one person can claim Child Benefit, even if you're in a couple.
You may be able to keep on claiming Child Benefit until the child turns 20 if they are in approved education or training. This can include A-Levels, NVQs or even home education, but it does not include university or BTEC qualifications. You can see a full list below.
You can claim Child Benefit if you fostered a child, as long as the local council is not paying anything towards their accommodation or maintenance. Child Benefit is also available if you adopted your child, as well as in certain circumstances where you're looking after a child for a friend or relative.
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