Million families learn of cuts to child benefit

ONE MILLION families will learn that they are to have their child benefit payments cut, as the coalition’s plan to reduce middle class benefits takes effect.

HM Revenue & Customs said yesterday it would begin sending the letters to households that it believes will be affected by the change, which is due to be introduced on 7 January 2013.

Anyone currently claiming child benefit will lose at least part of it if they – or their partner – earn more than £50,000. Their combined household income will not be taken into consideration.

As a result households where one person earns more than £60,000 will immediately lose the entire payment, which is worth £1,055 a year for the first child and £697 for subsequent offspring.

Other families will have it gradually phased out, losing one per cent of the benefit for every £100 earned over £50,000.

Conservative backbenchers have raised concerns about the policy, prompting the party to release internal polling data showing that 82 per cent of people support the policy.

“This is one of the tough decisions the government has to make,” the Prime Minister’s spokesman said yesterday.

“It is very hard to justify paying child benefit to the wealthiest 15 per cent of families. Many more people are on lower incomes and this government is trying to help people on the lowest wages.”

Although the plans are designed to save the government £1.7bn a year, they will result in many more people having to complete a tax return – which could increase admin costs.