The Child Benefit threshold will double if the Conservative Party wins the next General Election, Prime Minister Rishi Sunak has pledged.
This would raise the household income threshold from £60,000 to £120,000.
The pledge, included in the party’s recently published manifesto, reads: “End the unfairness in Child Benefit by moving to a household system, so families don’t start losing Child Benefit until their combined income reaches £120,000 – saving the average family which benefits £1,500.”
The proposed move is considered to be a “fairer” deal for single-earner households and will allegedly benefit over 700,000 families.
The household income threshold to claim Child Benefit increased from £50,000 to £60,000 in April, which “halved” the rate at which the benefit had been withdrawn.
The Conservative Manifesto continues: “This is the right thing for families and the right thing for the economy. But it still isn’t fair that single-earner households can start losing their Child Benefit when a household with two working parents and a much higher total income can keep it in full.
“We will end this unfairness by moving to a household rather than individual basis for Child Benefit.
“So nobody is worse off than under the current system, we will set the combined household income at which a family will start losing Child Benefit at £120,000 and gradually remove it until household income reaches £160,000, above which families will no longer receive Child Benefit.
“This will benefit over 700,000 households, each gaining an average of £1,480 a year.”
While the policy may come as welcome news to many, it has received criticism. Veteran broadcaster Andrew Neil posted on X: “Rishi Sunak now promising to extend child benefit to 700,000 households with combined income of £120,000 a year according to The Times.
“When a Tory government thinks the welfare state should cover those on six-figure salaries you know it’s lost the plot.” (sic)
Danni Hewson, head of financial analysis at AJ Bell and founding ambassador of Money Matters, also added: “Unfairness has been baked into the current system which allows two-parent households with combined earnings of up to a penny under £120,000 to keep their full entitlement, whilst others lose the benefit entirely because one parent tops £80,000.
“But testing this cap against households rather than individuals is likely to prove a massive headache for HMRC and raises the question about how long it would take to implement such a change.”
Ms Hewson highlighted the other issue of “where the money will come from, with the Tories claiming the plans would cost £1.3billion.”
She continued: “Cracking down on tax avoidance and evasion appears to be the favoured method of cobbling together the funds for these proposals, a strategy that feels more akin to rifling down the back of a sofa already stripped of all its cushions than a sure-fire revenue raiser after the election.”
Mr Sunak launched the Conservative manifesto at the Silverstone motor racing circuit today. He positioned himself as the heir to Margaret Thatcher with tax-cutting promises as he sought to overturn Labour’s poll lead, which has remained stubbornly at around 20 points.
Who can claim Child Benefit?
To claim Child Benefit, people need to live in the UK and be responsible for someone under the age of 16. This usually means they live with the child, or they pay at least the same amount as Child Benefit towards looking after them. Only one person can claim Child Benefit, even if a person is in a couple.
People may be able to keep on claiming Child Benefit until the child turns 20 if they are in approved education or training. This can include A-Levels, NVQs or even home education, but it does not include university or BTEC qualifications.
At present, the weekly rates for Child Benefit include: