Politics

Jeremy Hunt lifting child benefit charge threshold during Spring Budget is a 'common sense' move

The move has been welcomed by many, with MoneySavingExpert (MSE) founder Martin Lewis describing the threshold change, which he campaigned for, as a 'win'

Jeremy Hunt delivering his 2024 spring budget

Chancellor Jeremy Hunt announced a cut to National Insurance in his 2024 Spring Budget. Image: Parliament TV

Jeremy Hunt has lifted the child benefit charge threshold from £50,000 to £60,000 in what has been described as a “common sense” move during the Spring Budget announcement. 

During the announcement on Wednesday (6 March), Hunt announced the change to the benefit charge threshold, as well as a six-month extension to the household support fund, a 2p National Insurance cut, and a new tax on vapes. 

The chancellor explained that the child benefit charge threshold will rise from April, meaning 170,000 families will now no longer have to pay the charges. 

Those earning over the threshold can still receive child benefits, but must also pay a charge from their earnings. The new announcement means that for incomes between £60,000 and £80,000, 1% of every £200 above the new threshold will be charged. For those earning above £80,000, the charge will equal the amount of child benefit.

Equally, changes will affect benefits as a household. Currently, if you live with a partner and you both earn £50,000 or more, whoever earns the most has to pay the tax charge, however if both parents earn under £50,000, they can keep all of their child benefit. If one parent earns over, the charges apply.

Hunt added that he would aim to end this “unfairness” by April 2026, and move the high-income child benefit charge to a “household-based system.”

The move has been welcomed by many, with MoneySavingExpert (MSE) founder Martin Lewis describing the threshold change, which he campaigned for, as a “win”.

“We got the win on child benefit!” Lewis said on X, formerly known as Twitter.

“Chancellor tipped me off before budget, said this was due in large to MSE/my show’s campaigning – all based on all those of you who messaged me to say it was the key thing to put to him.”

The Institute for Fiscal Studies described the change as “radical.”

“Increasing the point at which families start losing child benefit from £50k a year to £60k will mean about 170,000 fewer families are affected in 2024–25,” it explained.

Labour MP Jess Phillips, however, explained that the “unfairness” Hunt aims to correct was a policy brought in by the Conservative government.

“Love Jeremy Hunt is undoing an unfairness in child benefit that a government he was a cabinet minister in started. Cheers dude,” she said.

Reporter Sian Norris added that a more welcome change would be to make child benefit “universal.”

“It would be nice if you admitted that you brought in means testing in the first place… and also it would be even nicer if we went back to child benefit being universal, in recognition of the importance of supporting children,” Norris said on Twitter/X.

The Institute for Public Policy Research (IPPR) welcomed the “common sense” move, but explained there should have been “stronger action” to support families in the UK. 

“This is a welcome and common sense move to ease the financial pressures on parents grappling with rising mortgage rates and food costs, and puts an end to steep tax rates on ordinary families,” Melanie Wilkes, IPPR associate director for work and the welfare state, told the Big Issue. 

“With child poverty persistently high, these measures should be coupled with stronger action to support those on the lowest incomes.”

Wilkes added that the childcare provision announced will offer “welcome certainty” for parents, but that “many families – particularly those on low incomes – still struggle to access high quality and inclusive childcare provision where they live”. 

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