Thousands warned they could miss out on £3,000 after benefit rule change
Around 180,000 families are being urged to "take action" now as they could end up missing out on over £3,000 a year.
The Chancellor announced in his Spring Budget that 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 - the higher limit is also being increased to £80,000 a year.
The move looks set to impact potentially 485,000 higher earners however around 180,000 will need to "take action now" to make sure they benefit from the changes, warns the financial firm Interactive Investor. The existing rules mean that thousands of families decided not to claim Child Benefit altogether, knowing they would have to repay it later through the High Income Child Benefit Charge (HICBC).
Alongside this, many higher-earning families have "opted out" of receiving payments. However, under the new rules, these households will be eligible for the payments but will need to make a claim for Child Benefit from scratch or adjust their current claim if they want to receive the payments from April 6.
Alice Guy, head of pensions and savings, interactive investor said: "Thousands of families have opted out of the Child Benefit system and will now have to scramble to opt in again. They will need to reapply from scratch or log in online to select that they want to receive Child Benefit. Child Benefit is automatically backdated by three months, or to the child's date of birth, whichever is later.
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"While reasons for opting out aren’t explored in the Government’s data, some families may have elected to not receive Child Benefit rather than going through the hassle of paying back the Child Benefit via self-assessment. Even if you earn over £80,000, it’s important to check if you’re eligible for Child Benefit as your income is calculated after deducting pension payments and gifts to charity under a gift aid scheme."
At the moment, you get £24 a week in Child Benefit 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. This means the payment will be worth £3,094 for someone who has three children or £2,212 if they have two children.
Claiming Child Benefit means that the parent will also receive National Insurance credits which count towards their state pension. It also means their child will automatically receive a National Insurance number when they turn 16 years old. You can apply for Child Benefit through Gov.uk here - you will need a Government Gateway account to put in a claim.
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