Child benefit cuts hit more

THE withdrawal of child benefit from higher rate taxpayers in 2013 will hit 300,000 families more than the government had first believed, it emerged yesterday.

Chancellor George Osborne said child benefit would remain in place until young people left education “at the age of 18 or even 19” rather than being reduced from 19 to 16.

Government officials now said the lower figure had been a “cautious” initial estimate and had not been vetted by the Office of Budget Responsibility.

The change means 1.5m families, rather than 1.2m as previously suggested, will lose the benefit.

Officials said the lower figure had been a “cautious” estimate and did not take into account those families that would have lost the benefit had the age limit been reduced.

The controversial plans, which see those earning more than £43,875 lose the entitlement, would also raise more than double the £1bn annual savings the government had first forecast, to £2.5bn a year, Osborne said.

The proposals have been a constant headache for the coalition since they were announced at the Conservative party conference at the beginning of this month.

Shortly after the proposals were announced it emerged single income families on more than £43,875 would lose child benefit, while a family in which both parents worked but earned £40,000 each, giving a combined income of £80,000, would still receive the benefit.

Labour shadow chancellor Alan Johnson, attacked Osborne over the figures saying: “The discrepancy between previous projections and what the chancellor announced today beggars belief.”