Thousands of parents missing out on up to £9,627 cash due to child benefit mistake – are you affected?
THOUSANDS of parents are missing out on up to £9,627 a year from one simple mistake.
Those who do not apply for child benefits may miss out on national insurance credits usually added automatically.
There is now double the amount of families not registering for child benefits as there were in 2013, reports The Times.
Only 315,000 did not register for the benefit when means testing was introduced in 2013, compared to 765,000 in 2020.
This is because, since the means testing change, every parent who earns over £50,000 has to pay some or all of the benefit back to HMRC through tax.
That means many families don’t want to claim it to then have to pay it back.
But it’s imperative that parents who are eligible register – if they don’t, it could stop their national insurance credits from being automatically granted.
This is needed to claim state pension when you reach 66 – so you could miss out on the maximum yearly pension of £9,627, or £185.15 a week.
Clare Moffat, pensions and legal expert at Royal London, said: “This tax charge has caused many problems since its implementation ten years ago.
“More and more families are being caught by this tax charge as the earnings threshold hasn’t changed since it was introduced.
“If it had increased with inflation then the starting amount would be over £63,000.
“At a time when costs are high, it can feel like families are being further penalised.
“It can also feel unfair as you could have a couple earning £49,999 each and the charge wouldn’t apply but it would apply if there was only one earner in a household and they earned over £50,000.”
Do remember that if you move into a household with children, even if they aren’t yours, you could still get caught with this tax charge.
How much is child benefit?
There are two child benefit rates, one for the eldest child and another for each further child or children.
The current rate for your eldest or only child is £21.80 per week. That’s £87.20 a month or £1,133.60 a year.
But, from April 2023 the rate for your eldest or only child will go up to £24 a week – or £96 a month and £1,248 a year.
This is an increase of £2.20 a week, £8.80 a month and £114.40 a year.
For each of your other children, it’s £14.45 a week – £57.80 a month and £751.40 a year.
From next April for your other children, you’ll get £15.90 a week, which is £63.60 a month and £826.80 per year.
That’s an extra £1.45 a week, £5.80 a month, and £75.40 a year.
How do I get child benefit?
Child benefit is usually paid every four weeks on a Monday or Tuesday.
But you can have the money paid weekly if you’re a single parent or getting certain other benefits like Income Support.
You can get the money paid into any account in your name – just apply for child benefit online through gov.uk.
Only one person can get the benefit for the child or children though so you’ll have to decide which parent will get it.
There are other benefits you might get on top of child benefit if you’re on a low income, like the child element of Universal Credit.
Who is eligible to claim child benefit?
You will usually qualify for child benefit if you live in the UK and you’re responsible for a child under 16.
The support can also be claimed for a child under 20 if they stay in approved education or training.
To be considered responsible for a child, you will live with them or you’re paying at least the same amount as child benefit rates to look after them – for example food, clothes or pocket money.
It’s important to note that eligibility changes if a child goes into hospital or care and if your child starts to live with someone else.
If you’re not sure about your eligibility you can contact the child benefit office.
You won’t be able to get the full amount of child benefit if you earn over £50,000 and you’ll get nothing at all if you earn over £60,000.
That’s because of something called the High Income Child Benefit Charge – but if it applies then it’s still worth claiming.
For more on this, please read our guide here.