Child benefit to be scrapped for high earners

Child benefit cuts for those who earn over £44,000 have been announced at the Conservative conference

Child benefit payments will be stopped for all higher-rate taxpayers to pay for wider welfare reform and to show that ‘we are all in this together’, George Osborne announced this morning.

He said that the cut, which will apply from 2013 to people on the 40% and 50% income tax rates, is 'difficult but fair' and will raise around £1billion. People earning over £44,000 will be affected.

The chancellor made the announcement this morning in the run up to today's keynote speech to the Conservative conference in Birmingham, in which he will vow to stick by his controversial plan to wipe out Britain's £109bn structural deficit in one parliament, saying the alternative to delay would only hit the poor and consign the country to a decade of debt.

The child benefit cut will help play for Tory plans for a universal single welfare benefit that will cover tax credits as well other benefits including housing benefit, jobseeker's allowance, and council tax benefit.

Osborne told BBC Radio 4's Today programme: ‘I understand these people [those affected by the child benefit change] are not the super-rich but we have to make sure that we're all in this together. I think people out there will understand that it's fair that you don't tax someone earning £18,000 a year to pay the child benefit of someone earning £50,000 a year.’

At present, child benefit is paid universallyfor those with children up to age 19 for those in full-time education, or 16 otherwise, and is worth £20.30 a week for the first child and £13.40 a week for any other children.

Under the new restrictions, if either parent earns over the threshold for higher rate income tax – at present around £44,000 – they will no longer be eligible for the payments.

It is a controversial move and Marie Claire wants to hear your thoughts. Is this measure unfair or is it necessary to get the country back on the road to economic recovery? Post your comment below.

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