Child Benefit (up to age 16) is money paid to parents or other people who are responsible for bringing up a child. 

You could qualify for Child Benefit if your child is in approved education or training - you can apply for this to continue for 20 weeks if a 16 or 17 year old leaves education or training and registers with either a government-sponsored careers service OR the armed services.

There are no specific age rules for the person making the claim.

There are two Child Benefit rates:

  • eldest or only child is £24 per week rising to £25.60 from 6 April 2024
  • additional children are £15.90 per child, per week rising to £16.95 from 6 April 2024

Will I pay tax on the benefit? 

The benefit is non-taxable BUT could make you liable for a tax charge if you or your partner earn over £50,000 per annum.

What other changes will come into effect on 6 April 2024?

In his recent budget on 6 March 2024, the Chancellor announced the current limit of £50,000 will rise to £60,000 a year which means people won’t have to pay back any of their Child Benefit until they start earning £60,000 a year. 

The charge is tapered so people will lose 1% of the child benefit amount for each £200 of income over the new threshold of £60,000 a year, known as the ‘high income Child Benefit tax charge’. 

Therefore, someone earning £70,000 will lose 50% of the child benefit they are entitled to, while someone on £75,000 will lose 75%.

Two parents each earning £59,000 a year could claim the full Child Benefit but a one-person household earning above £60,000 will start to lose some or all of the Child Benefit. As a result, the Government will consult on moving the high-income Child Benefit charge to a household-based system to be introduced by April 2026. 

Strategies to avoid the clawback may include optimising income, contributing to tax-advantaged accounts and in particular, seeking professional financial advice.

Although every effort has been made to ensure that the information provided in this article is accurate and correct, the information provided does not constitute any form of financial advice. We recommend that you take financial advice before making any financial decisions.

 

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