Parents can expect an extra 10P a week in child benefit from April as it increases in line with inflation. The proposed changes will take the payment for an eldest child up to £21.15 a week in the next tax year. Child benefit payments for other children will increase by 5p to £14 a week making £1,099 a year for an eldest child, and £728 for other children.
All families can claim child benefits, but if one parent in a household earns more than £50,000 a year, after pension contributions, they have to pay back 1 per cent of the benefit for every £100 of income over that threshold. A parent who earns more than £60,000 has to pay back all the benefit received.
Some families claim the benefit, even though one parent earns more than £60,000, because it automatically gives national insurance credits to a parent who is not working. This means they still get contributions to the state pension.
One can register without actually claiming it, by ticking a box in the child benefit section form on high income earners. It is important that low or nonearning parents who fill in the form register for the national insurance credits.
Last year HMRC said there could be 200,000 couples where the parent who didn’t need the NI credit was claiming the child benefit. The payment increases, listed in a document published by HM Revenue & Customs, also include a guardian’s allowance increase of 10P to £18 a week from April 12.
You get guardian’s allowance if you are bringing up a child whose parents have died, and you can claim it on top of child benefit.
Becky O’Connor from Interactive Investor, said, “It has been a really hard year for many people. As hardship has increased, benefits for families have effectively stood still.” She said such a meager increase was “enough for two extra carrots in the shopping basket”.
However, falling incomes during the pandemic could mean that more parents claim child benefit. O’Connor recommended checking your eligibility if you are earning less.
