The coronavirus is having a devastating effect on the incomes of some previously well-paid people. Anyone who has children should make sure they are getting the
Child Benefit they are entitled to.
Incomes have collapsed for many reasons. Hundreds of thousands of people are excluded from the various government help schemes because they have changed jobs, have become self-employed recently, make more than £50,000 or are company directors. Others are furloughed employees whose income has gone down to a maximum of £2,500 a month under the Job Retention Scheme. Some have found their commission-based income has collapsed; others have simply been laid off.
Anyone who has children, and whose income was above £60,000 but now is not, should make sure they get Child Benefit for each of them – up to the age of 19 if they’re in full-time training or (nonuniversity) education. It is £21.05 a week tax-free for the first child and £13.95 for each subsequent child. Even two children generate a taxfree income of £1,820 a year. For three children it’s £2,545, and for four £3,271.
Child Benefit is clawed back in full from people where a parent or their partner (whether they are a parent or not) has an income of more than £60,000 a year. The
so-called High Income Child Benefit Tax Charge is taken through the self-assessment system, which anyone in this position has to join. If the income of the higher earner is below £60,000 but above £50,000, then the Child Benefit will be partly clawed back.
The hassle of one parent getting a weekly sum and the other having it taken back through tax has led to around 650,000 parents, with more than a million children,
either giving it up or not claiming it in the first place. People who have given up the right to Child Benefit can easily start getting it now. It’s called restarting your Child Benefit; for how to do it go to gov.uk and search “restart child benefit”.
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Parents who have never made a Child Benefit claim at all – there may be 60,000 or so of them – should do so as soon as possible, as the benefit can only be backdated for three months. Claim at gov.uk – search “child benefit”.
Paul Lewis presents Money Box on R4