Child benefit cuts to be re-examined

child with small plant

The government is looking at ways to make proposed cuts to child benefit allowances "fairer" – a suggestion that could be the saving grace for many families.

In an interview with BBC Radio Surrey's Breakfast programme, culture secretary Jeremy Hunt revealed: "We are looking at ways to make it fairer. Particularly, there's this sort of 'cliff-edge effect', that if someone gets over the top-rate limit they lose child benefit, but there could be two people who are just under the limit in a household and have a combined income of much, much more than that who continue to claim it.

"So we just want to look at the fairness issue and see if there's anything we can do to improve it."

A 'cliff-edge' effect

Hunt's announcement follows hints from David Cameron that the plan to scrap the benefit for families where one parent earns more than £42,375 a year could be amended.

In an interview with Parliament's House Magazine, Cameron acknowledged that the changes could create a 'cliff-edge' effect.

"Some people say that's the unfairness of it: that you lose the child benefit if you have a higher-rate taxpayer in the family [but] two people below the level keep the benefit. So, there's a threshold, a cliff-edge issue," says Cameron.


"We always said we would look at the steepness of the curve, we always said we would look at the way it's implemented and that remains the case, but again I don't want to impinge on the chancellor's Budget."

It's a significant hint given that it comes just three months before the Budget, a time when policies are being finalised. However, at present, Treasury sources say there has been no change in policy.

Critics of the proposed child benefit cut say it is unfair as a household with two parents earning just under the 40% higher-tax threshold – earning a combined income of around £85,000 – would be able to keep their child benefit but families were only one parent works but earns over the 40% threshold – with a household income of £44,000 – would lose the benefit.

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Damn right it's unfair. If the government's going to bang on about family values, why penalise those hardworking families where one parent has opted to bring up the children and then reward those where both parents choose to work. I have no problem with reducing child benefit for higher paid famlies, but do it in a way that reflects family income and balances the higher childcare costs for working families against the sacrifice one parent makes by choosing not to work so they can be there for their kids. It is NOT an easy option.
I am just on that cliff and in the position now where I'm going to have to ask my employer not to give me a raise next year because it will make my family worse off. Barking madness!