Mr Hunt announced changes to address the unfairness in the current Child Benefit system. Previously, a couple could earn a combined income of £98,000 a year (£49,000 each) and receive full Child Benefit, while a two-parent family with one earner on a salary of £60,000 and over, or a single parent family earning £60,000 a year, wouldn’t receive anything.
The Treasury has now pledged to base the Child Benefit system on household rather than individual incomes by April 2026. In addition, the following changes to the system are being implemented from April 2024:
- The threshold for the High Income Child Benefit Charge will be raised to £60,000 from £50,000, taking 170,000 families out of paying this charge
- The rate of the charge will be halved, so that Child Benefit is not lost in full until an individual earns £80,000 per annum
Under these new thresholds, for every £200 of income earned above £60,000, individuals need to pay back 1% of the maximum amount of Child Benefit they’re entitled to. Once you reach £80,000 a year, the charge to be paid back is 100% of your entitlement.
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