Should I Still Claim Child Benefit if Earning over £60,000 - £80,000?

Child benefit (2024/25) is £25.60 a week (£1,331.20 per year) for the eldest or only child, up from £24 and £16.95 a week for another younger child, up from £15.90.  Currently, child benefit can only be claimed for up to two children.  That’s a total of £42.55 per week i.e., £2,212.60 per year.

High Earners

Previously,

• If just one parent in the household had income in excess of £60,000, the household became ineligible for child benefit and the whole amount paid would need to be repaid under the High Income Child Benefit Charge.
• If just one parent in the household had income in excess of £50,000 but below £60,000, child benefit was then reduced on a sliding scale being only partially eligible for child benefit and any excess payments would need to be repaid under the High Income Child Benefit Charge.
• If both parents had household income below £50,000 e.g., total household income of say £99,000, full child benefit was payable with no refund charge due.  This is unfair where if just one parent (or needed a family with just one working parent) had income about £60,000 then the household was ineligible for child benefit.
• This was changed in the Spring Budget 2024 and effective from 6^th April 2024.

Today (from 06/04/2024)

• Households where both parents earn up to £60,000 each i.e., total household income £120,000 are eligible for full child benefit.
• There is still a sliding scale if one parent has income between £60,000 and £80,000.
• If one parent earns over £80,000, they are the parent responsible for paying back all child benefit in full (if claimed) even if the benefit was paid to the other no income/lower income parent.

Should I even bother to claim child benefit if one parent’s income is over £80,000?

Our view is that is you should always claim child benefit even if you are not eligible.  The reasons for this are:

• Your child will automatically be issued a National Insurance number that will be released to them just before they are 16 years old rather than the delay of having to apply for one.
• Social security credits are automatically credited to any parent that claims child benefit. 
• If one of the parents is to stay at home to care for children and not work or only work part-time on a low income and not pay national insurance contributions, they will lose entitlements to credits for NIC and therefore credits towards state pension.
• The lowest earner/non-earning parent should always register to claim child benefit (online or form CH2) and then receive child benefit payments (to be refunded if the other parent is a high earner) or tick the box to not receive payments.  This means state pension credits will still be earned even if child benefit has not been paid.

Our view is that even if you are going to have to refund child benefit £1,331.20 per year (one child) or £2,212.60 per year (2 children) under the High Income Child Benefit Charge, you should still opt to receive payments as the money can be left on deposit to earn interest before being refunded at self assessment time on even buy premium bonds that may win the jackpot and then be sold again at self assessment refund time.  

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