When Chancellor Jeremy Hunt delivered the 2024 spring budget, he revealed plans to tackle the "unfairness" in the current Child Benefit system—and it looks like families will be better off following the changes.
Child Benefit is an allowance paid to someone who is responsible for a young person under the age of 16 – or under 20 if they're in approved education or training.
So what changes were made to child benefit and how could they affect you? Here's what you need to know.
What changes were announced for child benefits?
Currently, a household with two parents earning £49,000 each per year would get full child benefit, while a single parent family earning above £50,000 a year would have the benefit withdrawn in part or in full.
But the Chancellor has announced that, under the new system, you won't have to pay any of your Child Benefit back until you start earning £60,000 a year – the current limit is £50,000. This is also known as the 'high income Child Benefit tax charge'.
This change will stop 170,000 households from paying this charge, according to the Government.
You'll be able to earn up to £80,000 a year before you lose your Child Benefit entitlement completely – currently, the limit is £60,000.
It also means that an individual on £80,000 will not receive Child Benefit, while two working parents on £59,000 will get the full benefit.
When will the changes take effect?
The changes will take effect from April 6, 2024.
Mr Hunt also said the Government will "consult on moving the high-income Child Benefit charge to a household-based system to be introduced by April 2026.
When is child benefit paid?
Child benefit is paid every four weeks, on a Monday or Tuesday. However, the payment date may differ if there is a bank holiday.
Alternatively, single parents or people claiming other benefits like Universal Credit can get the payment weekly.
When does Child Benefit stop?
Child Benefit ends on August 31 on or after your child’s 16th birthday if they leave education or training.
Payments will continue if they stay in approved education or training, but you must tell the Child Benefit office.
Your child must be accepted onto the course before they turn 19. You’ll be sent a letter in your child’s last year at school, asking you to confirm their plans.
The education and training your child continues with must be more than an average of 12 hours a week supervised study or course-related work experience.
Courses are not approved if paid for by an employer or ‘advanced’, for example, a university degree or BTEC Higher National Certificate.
How to apply for an extension
After their education and training ends, your child may still be eligible for Child Benefit for 20 more weeks, called an ‘extension’.
This applies to your child if they signed up to join the armed forces or registered with their local careers service.
You can apply for an extension online or by contacting HM Revenue and Customs (HMRC).
Likewise, you might still get Child Benefit if your child takes a break in their education or training, for example, if they change college.
The Child Benefit office must be made aware of the break.
What other changes were set out in the budget?
Outside of Scotland (where it is frozen until 2025), the Government has announced it will raise council tax in April.
How much it increases will be determined by local councils in England, who have until March 11. Those with social care duties can raise council tax by up to 4.99 per cent, without triggering a referendum, while others can increase it by up to 2.99 per cent.
And though no plans for any further cost-of-living payments were announced, there is new funding being introduced for the Household Support Fund, which councils used to help those in need pay for essentials or have a warm place to go.
This was set to end this month, but will now be extended for another six months.
