Families not told of benefit change
"Extensive" media activity is being employed to inform people of the imminent changes to child benefit, the Government said, as it was revealed almost a third of families affected by the new means-tested rules had not been formally contacted.
It estimated 1.1 million will be affected by the move, but HMRC had been unable to contact everyone as it held incomplete data on some customers following changes to their income, relationship status, or address. It added that those affected would need to complete self-assessment returns.
The comments came as warnings were voiced from some quarters that the new system and its implications for certain taxpayers could catch people off guard.
Under the new child benefit rules, families where one parent earns between £50,000 and £60,000 will have their benefit reduced on a sliding scale, and stand to lose the benefit completely when a parent is earning over £60,000.
From next week, families in which one parent earns more than £60,000 a year will lose all their benefit, which is currently £20.30 a week for the first child and £13.40 for each child after that. Families where one parent earns between £50,000 and £60,000 will have the benefit reduced on a sliding scale.
The change will cost families with three children and at least one parent earning over £60,000 about £2,450 a year. And it will produce anomalies, as two-earner households where both parents earn £49,000 will keep all their benefit, while neighbours who have one parent on £60,000 and the other staying at home will lose all of theirs.
The Government previously outlined plans to cut child benefit for high-earning families as part of its drive to save the Treasury approximately £1.7 billion a year.
A Treasury aide said: "We must deal with Labour's deficit so that our children don't have to and do so in a way that is fair - it is very difficult to justify paying child benefit to the wealthiest 15% of families."
It is understood that the total number of opt-outs from the payments so far received by the HMRC stands at 169,550, with the deadline closing at midnight on January 6. The total web hits for the High Income Charge online guidance is currently at 1,014,000.