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Child benefit cut has hit more than 1,200 St Helens families
7:00am Friday 11th January 2013 in News
MORE than 1,200 St Helens families are believed to have lost child benefit payments following the introduction of a controversial Government policy that hits “high earners”.
Taxpayers in a family where one parent’s net income exceeds £50,000 will be affected by the new child benefit charge started on Monday.
The HMRC says it has written to 1,240 families in St Helens to advise them about the changes.
Critics have labelled the policy a “raid on families” by Chancellor George Osborne.
The move has been highly controversial because parents with a joint income of more than £50,000 retain the benefit.
For instance, a couple who both individually earn £49,000 a year (giving them a combined annual income of £98,000) would not be affected.
However a couple, in which one person earns £60,000 while the other stays at home, will lose all of their benefit under the changes.
If the highest earner’s income is between £50,000 and £60,000 the benefit will be reduced gradually.
Recipients of letters from the HMRC were asked to reply before Monday, stating whether they wanted to stop receiving the benefit or to pay a tax charge on it by completing a self assessment form.
Child benefit, which in most cases is paid to the mother, is worth £20.30 a week for the first child and £13.40 for an additional child.
It means families with a “high earner” could be stripped of more than £1,500 a year.
Mr Osborne’s original plan was to take child benefits from families where one parent earns £42,000 or more, however, this was revised after a public outcry.
Nationally, the changes are expected to affect more than one million families, saving the Government £1.3bn a year.
However, it has been criticised for being complex to understand and labelled a disincentive for some workers to seek promotion.