Child benefit claims soar after HMRC rule change - how are you affected?

Child benefit claims are on the rise

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Patrick O'Donnell

By Patrick O'Donnell


Published: 22/08/2024

- 12:44

Child benefit is a benefit used to help parents top up their household income

Child benefit claims have skyrocketed in recent months following the introduction of a rule change by HM Revenue and Customs (HMRC).

A Freedom of Information (FOI) request found that 86,656 new claims were made in July, 16 per cent higher than the previous month.


This comes after Chancellor Jeremy Hunt announced changes to the high Income child benefit charge during the last Government's Spring Budget.

Parents and guardians have to pay back money to HMRC from the benefit if they start earning over a certain amount.

In Hunt's last Budget, the former Treasury boss confirmed the threshold would be raised in April.

As a result of this decision, more people become eligible for child benefit and interest in the support appears to gave gone up.

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HMRC

Child benefit is one of the payments administered by HMRC

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What is child benefit?

Someone could be entitled to this HMRC benefit if they are responsible for looking after a child who is under 16 years old.

Child benefit can also be awarded to parents or guardians of a younger people under 20 if they remain in approved education or training.

Currently, only one person is able to apply for the benefit for a child in a household.

Payments are £25.60 every week for the older or only child in a home with a weekly amount of £16.95 a week awarded to any subsequent children.

What is the high income child benefit charge?

Any payments of this benefit are lowered one one of the parents in household begins brining in an income over a certain level.

This threshold is part of the high income child benefit charge.

As of April 6, the level at which someone needs to start paying back a portion of their child benefit jumped from £50,000 to £60,000.

Furthermore, the support from HMRC is completely removed when someone begins making £80,000.

In sharing these latest figures with the BBC, HMRC cited that it occasionally gets duplicate claims made in error, or rival claims made after changes to a household, such as a divorce or death taking place.

Some 683,000 households, making up 1.05 million children, have chosen not to apply for child benefit to avoid paying the HMRC charge.

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Jeremy Hunt

Jeremy Hunt raised the threshold for paying back child benefit

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Laura Suter, the director of personal finance at AJ Bell, described the uptake in child benefit as "good news".

She explained: "It’s likely that the announcement by the Government had a dual effect: it made more people eligible for the benefit and so they claimed.

"But, it also put child benefit in the news and reminded other parents who were already eligible that they should claim it.

Despite this, Suter noted that claims for child benefit are "coming from a low base".

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