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Published on 10 February 2020

Budget Representation 2020: High Income Child Benefit Charge (HICBC)

In our Budget 2020 representation, we highlight a number of issues relating to the High Income Child Benefit Charge.

Woman with a child on her lap, playing with toys

The HICBC has been a controversial policy since its introduction. Questions have been raised about the fairness of the policy and whether it is cost-effective. For these reasons, we think it is sensible for a review of the policy to be carried out to assess if it is working as intended and whether it meets its original objectives. However, if the charge remains in place we recommend a number of changes including:

  • Allowing claims for national insurance credits for years where a person (or their partner) would have been entitled to child benefit and they (or their partner) had adjusted net income over the HICBC threshold. There should be no time limit for such claims. This is important because we are aware people are missing out on NI credits because they don’t fully understand the consequences of not claiming child benefit or the complicated mechanism in place which allows people to claim but opt out of payments in order to preserve NI credit entitlement.
  • Up-rating the £50,000 threshold, which has remained static since the charge was introduced in 2013, to £60,000 in order to minimise the impact of the charge and to ensure the policy works in the way originally intended. Thereafter the threshold should be reviewed regularly or preferably provision made to automatically uprate it annually inline with inflation.
  • Increase the point at which child benefit is fully withdraw from £60,000 to at least £75,000

The full text of the representation can be found here: High Income Child Benefit Charge (HICBC) - Budget Representation 2020

Victoria Todd

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