Understanding the changes to Child Benefit and the High Income Threshold is critical for financial planning for a family living in the United Kingdom. HMRC announced on its website that starting April 6, 2024, all Child Benefit beneficiaries would receive enhanced payments automatically.
Under the latest revisions, families with just one child will henceforth be eligible for a maximum of £1,331 per annum, up by £83.20. Moreover, a sum of £881 will be given yearly to every additional child, which signifies an increment of £54.60. Nevertheless, it is worth mentioning that there is no cap on the number of children that families can claim benefits for.
| Number of Children | Annual Payment | Increase |
|---|---|---|
| 1 | £1,331 | £83.20 |
| Each additional child | £881 | £54.60 |
Regarding the payment plan, it remains unchanged with an amount of £102.40 per fortnight (£25.60 per week) for the initial or sole child and £67.80 per fortnight (£16.95 per week) for any additional child.
Automated Payments and Claims Management
There is no need to contact HMRC if you are already entitled to a higher benefit, as it is automatically credited to your bank. According to Angela MacDonald, HMRC's Deputy Chief Executive and Second Permanent Secretary, families do not need to contact HMRC to receive the automatic increase in Child Benefit rates for existing claimants.
For parents' convenience, the HMRC application or via the GOV.UK online portal can be used to :
- Apply for Child Benefit online
- Backdate claims up to three months
- Add a new baby to a claim
- Notify HMRC of a change in circumstances
- Update personal details, such as a change of address/bank details
- View or print proof of Child Benefit entitlement
Changes to the High Income Child Benefit Charge (HICBC)
The High Income Child Benefit Charge (HICBC) will now only be applicable to families with the highest earner making an annual income of over £60,000 starting April 6, 2024. This has been increased from the previous threshold of £50,000 per annum.
According to Laura Trott, the unfairness in the child benefit system will be terminated, and this will affect almost 170,000 families who will no longer have to pay child benefit. In addition, a number close to 500,000 families will save about £1,300 on average next year. The cost of living has been severely impacted by both the pandemic and the Ukrainian war. However, now that the economy is picking up following some tough measures we took, we are able to give more help to parent.
In the case of individuals with annual earnings between £60,000 and £80,000, there is a decline in the amount of child benefit they will be eligible to receive with respect to an increase in income over this interval. Once a person's income exceeds £80,000, they will not receive child benefit and will have to pay the High Income Child Benefit Charge.