The government won’t reform child benefit

Plans to reform child benefit rules have been scrapped by the government. Chancellor Rachel Reeves did not mention the plans in her budget, but the budget document says they would cost too much.

Let’s dive into the details of the current child benefit system,  proposed changes, and what it all means for families across the UK.

What’s the current child benefit system?

Child benefit is a payment which helps families with the costs of raising children. Here’s a quick rundown of the current rules:

• It’s available to those responsible for a child under 16, or under 20 if in approved education or training.
• Payments are £25.60 a week for the eldest or only child, and £16.95 a week for each additional kid.
• From April 2025, these amounts will rise to £26.05 and £17.25, respectively.

But right now, if one parent earns above a certain amount, the benefit starts to taper off.

This is known as the high-income child benefit charge (HICBC). The threshold starts at £60,000 and completely withdraws at £80,000.

Many people have said this isn’t fair, especially for single earners.

The proposed changes

In March, former Chancellor Jeremy Hunt proposed a new system where the HICBC would be based on household income instead of individual income.

This could have made things fairer for families where one parent earns significantly less than the other. But the recent budget document scrapped the plans, saying they’d cost about £1.4bn by 2029-30.

David Stuart, a father-of-two, expressed disappointment that the proposal was “buried” in the document and not highlighted in the speech.

He believes that the current system unfairly penalises families like his own, where one parent earns above the threshold while another has a lower income.

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