Child benefit: Planned reform scrapped

Published On Oct 31, 2024, 10:18 AM

The UK government has decided not to implement a planned change to child benefit rules that aimed to make the payment system fairer based on household income instead of individual earnings. The proposed reform was rejected due to its high cost, estimated at £1.4 billion by 2029-30. Critics have pointed out that the current system is inequitable, benefiting some households more than others based on individual earnings regardless of total household income. Going forward, a minor administrative simplification will allow individuals to pay their High Income Child Benefit Charge directly through their tax code. However, comprehensive reforms are still necessary for greater fairness and clarity.