In April 2024, child benefits increased. Not only that, but the threshold for which you will start to pay tax on your child benefit has also increased.
As well as knowing how much money you should expect, it’s important to know whether your income meets that threshold for paying child benefit tax.
If you find that you are required to pay tax, you can look into how to lower and perhaps even avoid the tax entirely.
In this article, we cover:
Child benefit is a social security payment distributed to the parents or guardians responsible for bringing up a child who is either of the following:
Only one person can claim child benefit for a child, and there is no limit to how many children you can claim for.
You can read more about this on the gov.uk website. There is also a list of approved education or training.
On April 6, 2024, child benefit increased. Here’s what it is now:
If you’re not sure how much child benefit you’re entitled to, you could use this government calculator.
Child benefit can be claimed 48 hours after you have registered the birth of your child or once a child comes to live with you.
If you want to make a claim for child benefit after this, the payments can be backdated for up to three months.
You can claim by phone, by post, or online.
The following documents will be required:
Typically, the child benefit will be paid once every four weeks. However, if you’re a single parent or receive certain other benefits (such as Universal Credit), you can receive the money every week.
If you are applying for the first time, you could have to wait up to 12 weeks to receive your first payment if applying by post.
However, if you’re applying online or using the app, you could receive your payment within three days.
The two-child cap limits Universal Credit payments and child tax credit to two children per family.
While a family can claim it for the first and second children, they will not be able to claim it for any subsequent children.
You can now claim child benefit if you earn over £60,000. In the 2024 spring budget, the amount of money that you can earn before you begin to lose child benefit increased.
Previously, if one parent earned more than £60,000, the child benefit would be taken away completely. This upper threshold has now been increased to £80,000.
There’s also a lower threshold. Child benefit reduces when one parent earns more than £60,000. This is an increase from the previous figure of £50,000.
These rules mean that a household where two parents earn £60,000 and have a household income of £120,000 will receive the full benefit.
Meanwhile, a household with one parent who earns just above £60,000 will see their benefit reduced and cut altogether once they earn more than £80,000.
The benefit has been criticised for being unfair to single parents because of the difference in how much money a single-parent and two-parent household can bring in before being taxed.
Firstly, it’s important to note that child benefit does not count as income for tax purposes. This means that it will not affect your entitlement to any other benefits.
You may, however, be required to pay tax on your child benefit if you meet the income threshold. The high-income child benefit charge (otherwise known as a tax) threshold was raised in the 2024 spring budget.
Now, if you claim child benefit and earn over £60,000, you will still receive child benefit, but you will be taxed.
You will lose 1% for every £200 you earn over £60,000, right through to £80,000.
As mentioned, once you reach the £80,000 mark, the child benefit will stop.
To pay the High-Income Child Benefit charge, you must register for a self assessment and fill in a self assessment tax return each tax year to pay what you owe.
There is information about these requirements and links to where you can complete them on the gov.uk website.
One way that allows you to lower the amount you need to repay or eliminate high-income child benefit charges is by increasing your workplace pension contributions.
That is because, when judging your income, the government looks at your adjusted net income. That is basically your income after your pension contributions have been deducted.
So, if you increase your workplace pension, you could fall below the tax threshold and no longer need to pay the high-income child benefit charges.
However, bear in mind that increasing your pension contributions will decrease your monthly take-home pay. It’s advisable to consider whether that would be feasible with your lifestyle.
You will also need to check if your work pension is salary sacrifice (which means your income is reduced when you increase your pension). If it is not, paying into a private pension might be an option.
For more information on this and suggestions of other ways you could lower your child benefit charges, read the article ‘I earn more than £60k a year – can I avoid the child benefit charge?’
If your child goes to live with someone else (like a friend or relative), you will usually still receive child benefit for eight weeks afterwards.
If no one else claims it and you continue to make contributions to the child’s upkeep, it may continue for longer.
You need to contact the Child Benefit Office if your circumstances change. You can also get more information by reading the gov.uk website.
You will lose child benefit if any of the following circumstances apply to you:
You can read up on what counts as approved education or training when your child turns 16 on the gov.uk website.
You can also check the Child Benefit Office if you’re not sure whether you’re eligible.
You will automatically receive National Insurance credits if you claim child benefit, and your child is under 12.
It’s important to note that you will still receive these National Insurance credits if you pay it back through a tax return/because of the high income charge.
National Insurance credits count towards your state pension. That means that they can help if you’re not working or don’t earn enough to pay National Insurance contributions.
However, if you don’t need the National Insurance credits, you could pass them on to your family instead and do either of the following:
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Although the information provided is believed to be accurate at the date of publication, you should always check with the product provider to ensure that information provided is the most up to date.
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