One in Five Families to Lose Their Child Benefits
Soon more than one in five families with children are set to lose at least some of their Child Benefit, the IFS warn. This is because the benefit starts to be withdrawn once a family’s income exceeds £50,000 – this threshold has remained unchanged since 2013. If it had been indexed in in line with prices the withdrawal threshold would now be £55.000. The failure to uprate the threshold is in effect a stealth tax on families many of whom will be not be well off. Child Benefit was a replacement for child tax allowances. The Treasury is taking £1.8 billion each year out of the family budgets of 1.6 million families. The number of families with children who are affected will has risen by 36%, or 370,000, in just six years, some are not well-off. A family with three children and an income of £50,000 is likely to be in the less well off half of the population. The withdrawal of child benefit was originally intended to apply only to the top 15%. Leonard Beighton of Tax and the Family says that these latest IFS figures show that families with a below average income are now starting to lose their child benefits. Click here to see the IFS research.