HMRC is urging families across the UK to reassess their eligibility for Child Benefit, a vital financial lifeline designed to support parents and carers in raising children. With payments reaching up to £3,094 per year, this initiative provides not only immediate financial assistance but also important long-term benefits, such as National Insurance credits. Despite widespread awareness, HMRC notes that many families, including higher earners, may be overlooking this opportunity due to misconceptions about eligibility thresholds. With inflation impacting household budgets, this reminder serves as a crucial call to action for families to review their entitlements.
What is Child Benefit and Who is Eligible?
Child Benefit is a government-provided financial support designed to assist families in covering the costs associated with raising children. The benefit is available for children under 16, or under 20 if they remain in full-time education or training. Payments are made regularly and are structured to support families based on the number of children in their care.
The current rates offer £25.60 per week for the eldest or only child, which totals £1,331.20 annually, and £16.95 per week for each additional child, equating to £881.40 annually per child. For example, families with two children can receive £2,212.60 per year, while those with three children are eligible for up to £3,094 annually.
These rates are set to increase from April 2025, as Labour confirmed in the October autumn budget that most benefits, including Child Benefit, will see a 1.7% rise. After this adjustment, families will receive £26.05 per week for the eldest or only child, totalling £1,354.60 annually, and £17.25 per week for additional children, equating to £897 annually per child. This means families with two children will receive £2,236 annually, and those with three children can expect £3,117.40 per year. These increases, though modest, are seen as a welcome adjustment in the face of rising living costs.
Income Thresholds and High Income Child Benefit Charge
While Child Benefit is available to families earning under £60,000 annually without deductions, households with an income between £60,000 and £80,000 may also qualify, albeit subject to the High Income Child Benefit Charge (HICBC). The HICBC is a tax charge applied to the higher earner in a household, reducing the net benefit based on income. This sliding scale often deters higher earners from claiming, but HMRC stresses that even those in this bracket should carefully review their circumstances.
In a statement on X (formerly Twitter), HMRC highlighted the importance of checking eligibility:
“Think you earn too much to receive Child Benefit payments? Check again to make sure you’re not missing out on money. To see what you could get, use our Child Benefit tax calculator below, before restarting payments online or in the HMRC app.”
This proactive encouragement from HMRC reflects the common misconception that higher earners automatically forfeit eligibility. Changes in household income, number of children, or employment status can all influence entitlement, making periodic reassessment essential.
The Long-Term Benefits of Claiming Child Benefit
Beyond the immediate financial relief, Child Benefit offers significant long-term advantages, particularly for parents who step away from the workforce to care for their children. One of the programme’s most valuable features is the allocation of National Insurance credits to the primary claimant. These credits are vital for building State Pension entitlement, ensuring that career breaks taken for caregiving do not negatively impact future financial security.
Additionally, Child Benefit ensures that each eligible child receives a National Insurance number automatically before turning 16. This process simplifies their transition into adulthood, reducing administrative hurdles when they begin employment or require financial services. Even households opting out of receiving payments due to the HICBC can still claim Child Benefit to secure these long-term benefits without triggering additional tax liabilities.
How to Check Eligibility and Submit a Claim
For families who have not yet claimed, or for those unsure about their current eligibility, HMRC provides a Child Benefit tax calculator to simplify the process. This tool allows families to determine their entitlement, estimate the impact of any applicable charges, and explore whether claiming is the right decision for them.
Steps to Claim
- Register the Birth or Custody of the Child: Claims can be initiated within 48 hours of registering the birth of a child or when a child moves into a household’s care.
- Submit the Application: Applications can be completed online through HMRC’s secure portal or by post using the appropriate forms.
- Backdate Payments: Claims can be backdated for up to three months, ensuring that families receive payments for earlier qualifying periods.
It is advisable for families to act promptly, as delays in submitting claims can result in missed payments or complications in securing related benefits.
The Broader Implications of Child Benefit Adjustments
The planned 1.7% increase in benefit rates from April 2025 has been welcomed by many as a necessary adjustment to reflect rising living costs. However, critics argue that the HICBC threshold of £60,000, which has remained unchanged since its introduction, is no longer fit for purpose. As inflation erodes real income, more middle-income families are being drawn into the higher tax bracket, effectively reducing the programme’s accessibility.
Policymakers are being urged to reconsider the threshold to ensure that Child Benefit remains equitable and continues to provide meaningful support to families across the income spectrum. Without such changes, the programme risks alienating families who are neither low-income nor wealthy but face significant financial pressures.
