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Middle income families will be able to claim thousands of pounds extra in state support after the Chancellor announced changes to the child benefit system.
Currently, if either parent earns £50,000 or more the amount of child benefit a family is able to claim is reduced gradually. Once either parent earns more than £60,000 the entire child benefit is clawed back via the “high income child benefit charge”.
From April, the threshold where child benefit begins to be clawed back will rise, to £60,000, and at £80,000 it is lost entirely.
Use our calculator, below, to see how much more money you’ll be able to claim as a result of the changes. For a family of four with a single earner on £65,000, the changes will mean an extra £1,659, for instance.
Families who have previously had to pay back their child benefit payments will have to hand over less of their income to the taxman. Mr Hunt said that changing the “unfair” system would save families money and encourage the equivalent of 10,000 workers back into the workplace.
It is the first time that the threshold has been raised since 2013, when it was introduced.
But the system, which will see further reform by April 2026, remains complicated, and each additional child creates more confusion. Critics have said that it traps families in extortionate “marginal” tax rates, and discourages parents from returning to work.
The charge will eventually be based on household income, rather than the income of the higher-earning parent, but this reform will require significant changes to HMRC protocols and will take up to two years.