COVID-19: Child benefit – time to reconsider?.

Article | Michael Dean | 3rd May 2020

If you have any questions or concerns please do not hesitate to speak to your PEM contacts directly

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Following the outbreak of COVID-19 and the financial impact on the economy, more of us are seeing our ‘normal’ income levels drop. This may be due to being furloughed, taking a reduced salary or simply being unable to work altogether. Any sources of additional income or benefits at this challenging time are welcome.

With this in mind now is the time to consider claiming child benefit, especially if you have disregarded it in the past due to being caught by the High Income Child Benefit Charge (HICBC).

If your expected income for the current tax year (2020/21) has dropped below £60,000, you should review your position and potentially make a claim for the benefit.

It is still worth considering a claim even if your expected income is above £60,000, as although you will be required to repay the benefit in full this will not be due until 31 January 2022! In the meantime, a cash flow benefit is available.

What is child benefit?

A tax-free payment, paid on a four weekly basis, that individuals can claim for their children or children under their care. The benefit may have to repaid if you are caught by the HICBC.

Who qualifies?

Parents/guardians of children under 16 (or over if they are within an approved education/training programme). For further details as to what is an approved education/training programme click here.

How much is it?

From 6 April 2020 child benefit is paid at £21.05 per week for the first child, and £13.95 per week for subsequent children.

For a family with two children, this would provide an additional £1,820 per year, increasing to £2,545.40 per year for a family with three children.

Can child benefit claims be backdated?

Yes, it is possible to retrospectively claim child benefit up to a maximum of three months.

What is the High Income Child Benefit Charge HICBC?

Where an individual has income for the year totalling £50,000 or more, they are considered a high earner and any child benefit received will then be subject to a partial claw back following the end of the tax year. If total income exceeds £60,000 child benefit is clawed back in full.

For households with two adults that are either spouses/civil partners or an unmarried couple living together as spouses/civil partners, the HICBC will be applied to the higher earner of the two.

Where the income thresholds are exceeded any claw back of the benefit will be dealt with via the individual’s self-assessment tax return for the year in question.

How to apply for child benefit or claim for an additional child?

Simply follow the link below and complete the appropriate form – https://www.gov.uk/government/publications/child-benefit-claim-form-ch2

What if I have stopped claiming in the past and want to start again now?

You can simply phone HMRC on 0300 200 3100 to re-start claiming, make sure you have your National Insurance number and/or your Child Benefit number to hand when calling.

Further questions

If you have any further questions on this matter or require additional guidance please do not hesitate to contact us.

About the author

Michael Dean

Michael is an Assistant Manager in our Private Client team. He joined PEM in 2014 and is responsible for a Read more …

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