Child Benefit changes – What you need to know
9th April 2024
The new Child Benefit changes came into effect on 6 April 2024, with families receiving up to £1,331 per year (for the first or only child), and up to £881 per additional child, increasing by £83.20 and £54.60 respectively on the year before. This is paid directly into your bank account every 4 weeks. There is no limit on the number of children that you can claim for.
Parents with a newborn baby should make a claim online as soon as possible. Child Benefit claims can be backdated by a maximum of three months.
High Income Child Benefit Charge (HICBC)
Previously, parents earning under £50,000 a year are eligible for the full amount of Child Benefit. Once you started to earn over this, you had to start paying it back through the High Income Child Benefit Charge (HICBC). At this point, you have to pay back 1% of your Child Benefit payment for every £100 of income you earned above £50,000 a year. Therefore, if you earned over £60,000, you needed to pay back all of the benefit.
However, from 6 April 2024 the threshold rose to £60,000, with the claw back being 1% of your Child Benefit payment for every £200 of income you earn above. Therefore, only if one individual earns over £80,000 a year, will you need to pay back all of the benefit.
My income is over £80,000, what should I do?
We would always suggest you claim the benefit and set the money aside to cover any HICBC that will become payable within 9 months after the end of the relevant tax year. By claiming Child Benefit, the lower earning parent may earn National Insurance credits if they otherwise wouldn’t have, which count towards their state pension eligibility. It also provides protection should circumstances unexpectedly change, as back claiming is limited.
Can I avoid the charge?
There are multiple ways in which you can reduce your taxable income to keep yourself under the threshold.
Get In Touch
For more information or advice on the Child Benefit changes, contact your local Whitings office today.
Disclaimer - All information in this post was correct at time of writing.
