Jeremy Hunt admits Government is reviewing cut in child benefit

The Culture Secretary Jeremy Hunt stated the government was looking at ways to make unpopular plans surrounding the cut in child benefit fairer. However the treasury have commented there has been no change in policy at this stage.

David Cameron has admitted there was an issue with the proposed thresholds in the wake of increased criticism that single earning families were being unfairly hit.

Under the new proposals some parents could lose around £2500 if one parent earned over £44,000 whilst a family with 2 working parents earning £40,000 each would enjoy a total household income of £80,000 and retain all their benefits. With the 40% threshold due to fall in 2013 to around £42,000 more families affected further still.

Chris Leslie, Shadow Treasury minister hit out: “The government’s current plans to cut child benefit are unfair and highly bureaucratic.”

David Cameron commented in an interview with House Magazine that he had concerns the structure of some of the proposed changes. He said:”Some people say that’s the unfairness of it, that you lose the child benefit if you have a higher rate taxpayer in the family but 2 people below the level keep the benefit”

He continued: “So there’s a threshold, a cliff edge issue. We always said we would look at the steepness of the curve, we always said we would look at the way it’s implemented and that remains the case. But again, I don’t want to impinge on the chancellor’s Budget.
Quoting Culture Secretary Jeremy Hunt from an interview with BBC Radio Surrey he said: “We are looking to make things fairer.” “Particularly, there’s this sort of cliff edge effect that if someone gets over the top rate limit they lose child benefit, but there could be two people who are just under the limit in a household and have a combined income of much, much more than that who continue to claim it. So we want to look at the fairness issue there and see if there’s anything we can do to improve it.”

Chris Grayling, Employment Minister stated on BBC Newsnight however that he would be “surprised if there was a major U turn on child benefit”.

If you are in need of child benefit advice you should contact a free debt charity such as Debt Support Trust or Citizens Advice Bureau.