Child benefit claims rise after income rule change

The number of new child benefit claims rose in April, after the government changed the rules on how much parents can earn and still be eligible.

There were 86,656 new claims made, which was up 16% on the previous month, a BBC Freedom of Information (FoI) request has found.

Parents have to start paying back part of the benefit once they earn a certain income, and in the March Budget, then-Chancellor Jeremy Hunt said the threshold would go up in April.

One expert said the announcement not only made more people eligible to claim, but would have reminded others who were already eligible that they should claim it.

You can get child benefit if you are responsible for bringing up a child who is under 16, or under 20 if they stay in approved education or training.

Only one person can claim the benefit for a child. The payments are £25.60 a week for the eldest or only child, and £16.95 a week for younger children.

However, payments are reduced once one parent starts earning at a certain level, known as the High Income Child Benefit Charge (HICBC).

On 6 April, the income level at which people have to start paying back part of the benefit rose from £50,000 to £60,000, and the level at which it is withdrawn completely went up from £60,000 to £80,000.

The BBC’s FoI asked His Majesty’s Revenue and Customs (HMRC), which processes child benefit applications, how many new claims were made per month from the beginning of last year to May this year.

April saw the highest number of claims made in that period, and well above the next highest month.

HMRC pointed out that it can sometimes receive duplicate claims made in error, or rival claims made following a household breakdown.

“The boost in claimants in April is good news,” said Laura Suter, director of personal finance at AJ Bell.

“It’s likely that the announcement by the government had a dual effect: it made more people eligible for the benefit and so they claimed, but it also put child benefit in the news and reminded other parents who were already eligible that they should claim it.”

But she added that “we’re coming from a low base” as the benefit is “chronically underclaimed”.

The latest annual figures show the number of families getting child benefit payments has dropped to its lowest level since records began, she said.

A total of 683,000 families, accounting for 1.05 million children, opted out of getting the payments because they would have had to pay the HICBC.

“If these families had been eligible they could have claimed £1.15bn in additional support,” Ms Suter said.