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Child benefit to be cut

This Autumn, households with one person earning over £50,000 will experience changes to claiming child benefit.

By the end of the year, households who fall into this category will receive letters from HMRC warning them they are about to lose some or even all of their child benefit. The benefit has long been universal but is now excluding higher income households.

The changes will be fully implemented in January with HMRC estimating that 1.2 million families will be affected, a reduction therefore in the current 7.9 million currently receiving child benefit irrespective of income.

Those earning over £60,000 will lose all child benefit, those under £50,000 will still receive it all. Those in between, will receive tapered amounts depending on how much they actually bring in.

Child benefit is worth £20.30 a week for the eldest child and £13.40 for every subsequent child. Therefore a family with three children could face losing up to £2,449.20 a year.

There will be two ways to deal with the changes. Those on steady income year to year can just opt to forgoe the benefit from January whereas those whose earnings fluctuate can have it 'clawed back' at self assesment. The second option will almost certainly see the Revenue bear an administration cost.

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