Martin Lewis issues warning for any parents earning under £80,000 a year – you could be £1,260 better off
MARTIN Lewis has issued a warning for any parents earning under £80,000 a year who could be missing out on free cash.
A change in the child benefit system in April means that more parents can now get help with childcare costs.
As of April 6, the threshold for receiving child benefit was raised meaning nearly half a million families with children will save an average of £1,260 next year.
Speaking on This Morning, Martin said: “If you are not getting child benefit now and the highest earner earns less than £80,000 in your family – start claiming child benefit.”
He added that even though the government might take some back, you will still see the benefit of the extra cash.
The Money Saving Expert founder directed people to the gov.co.uk website where you can find and fill out the child benefit claim form.
Child benefit is paid to parents to help with the costs of childcare.
Parents can claim £25.60 per week for their first or only child and an extra £16.95 a week for any additional children.
However, before April 6, if either parent or carer started to earn over £50,000, they had to start paying the high-income child benefit charge.
This means parents had to pay back 1% of their child benefit for every £100 of income earned over the £50,000 threshold.
However, as of April, the threshold at which parents have to pay the charge was increased to £60,000.
This means that parents now repay 1% for every £200 of income earned over the new threshold.
Furthermore, previously when you reached a £60,000 salary, you had to repay the full amount of child benefit received.
But from April 6, along with the other changes, Chancellor Jeremy Hunt announced in the Spring budget that this limit will also go up to £80,000 to ensure fewer parents are caught out.
Because of the higher taper and threshold, nearly half a million families with children will save an average of £1,260 next year.
How to claim Child Benefit
Child benefit is worth up to £1,331 a year for your first or only child. And up to £881 a year for additional children.
This works out as £102.40 every four weeks or £25.60 a week for your first child and £67.80 every 4 weeks or £16.95 a week for their siblings.
There is no limit the amount of children that can be claimed for.
Applying is straightforward and can be done in minutes at gov.uk or through the HMRC app.
Parents with a newborn baby should make a claim online as soon as possible and could then receive their first payment in as little as three days.
You can also backdate claims for up to three months.
Parents can make a claim and then choose to opt-out of receiving Child Benefit payments can still receive National Insurance credits if one parent is not working.
National Insurance credits build up your entitlement to the state pension.
What other child benefit changes are on the way?
Also at the Spring Budget, the Chancellor acknowledged that the existing child benefit system could be “confusing and unfair” because of how single parents are affected.
So, in a further boost, Mr Hunt said the government will look to change the system to a household-based one by April 2026.
Currently, child benefit begins being withdrawn when one parent earns over £50,000 a year.
This means two parents earning £49,000 a year – totalling £98,000 in the household – each receive the benefit in full.
Whereas a household earning a lot less than that does not get the full payment if just one of the parents earns over £50,000.
By converting to a household-based system, it would mean parents aren’t caught in the tax trap unnecessarily.
But this change will take time as they are complicated measures and an exact timeline hasn’t been announced.
What is child benefit and who is eligible?
Child benefit is paid to parents to help with the costs of childcare.
Payments are usually made every four weeks, plus by claiming child benefit you also get National Insurance credits that count towards your State Pension.
Currently, parents can claim £25.60 a week for their eldest child – equating to around £102.40 a month or £1,334.86 a year.
For any additional children, you can get £16.95 a week, which is £67.80 a month and £883.82 per year.
You normally qualify for child benefit if you live in the UK and are responsible for a child under 16.
Parents can also claim support for a child under 20 if they are in approved education or training.
When two or more people share the responsibility of caring for a child, it can only be claimed by one person.
You’ll be responsible for a child if you live with them or you are paying at least the same amount as child benefit towards looking after them.
This might mean you are paying the equivalent amount of child benefit on food, clothes or pocket money.
You should bear in mind, eligibility changes if a child goes into hospital or care and if your child starts to live with someone else.
Usually, you get child benefit for eight weeks after your child goes to live with a friend or relative – as long as they don’t make a claim.
But it can continue for longer if you make contributions to your child’s upkeep.
Foster parents can also claim child benefit, as long as the council is not paying anything towards their accommodation or maintenance.
Legal guardians or parents adopting a child can also apply for the benefit, but the child has to be living with them.
You will only be able to claim for a short period if you leave the UK, for example, if you go on holiday or for medical treatment.
For anyone not sure about eligibility, you can contact the Child Benefit Office.
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