By Niamh Tracey | 21 March, 2024

Spring Budget – High-Income Child Benefit Charge changes mean benefits for more

The High Income Child Benefit Charge (HICBC) has attracted a lot of criticism since its introduction because of the way it penalises couples that have a single high earner.

Currently, a couple where the two parents both earn £49,000 each are unaffected by the HICBC. However, another couple where one parent earns £60,000 while the other parent doesn’t work lose their entire child benefit amount.

To reduce this unfairness, the Spring Budget increased the ‘high-income’ threshold from £50,000 to £60,000 with effect from 6 April 2024.

Not only that but the HICBC will now be calculated at 1% of the child benefit received for every £200 of income above the threshold. This is a slower rate of clawback than in the 2023/24 tax year and now means that child benefit is only fully clawed back where the income exceeds £80,000, rather than £60,000 in 2023/24.

This change means that many more couples will be able to keep their child benefit.

The Chancellor, Jeremy Hunt, also announced plans to change the HICBC so that it applies to household rather than individual income. This is expected to happen by April 2026.

Credit to Business News England