Child Benefit is a government payment in the United Kingdom designed to help families with the cost of raising children. The amount you receive depends on the number of children you have, and in some cases, your income may impact your eligibility. Below is a comprehensive guide on how Child Benefit is calculated, including eligibility, payment rates, and potential reductions due to the High Income Child Benefit Charge (HICBC).
Eligibility for Child Benefit
To qualify for Child Benefit, you must meet the following criteria:
- The child must be under 16 (or under 20 if they are in approved education or training).
- You must be responsible for the child (even if they do not live with you).
- There are no income limits to claim Child Benefit, but higher earners may need to repay some or all of it through the tax system.
Child Benefit Payment Rates (2024-2025)
The amount you receive depends on how many children you have:
- £24.00 per week for the eldest or only child.
- £15.90 per week for each additional child.
Example Calculation:
If you have two children, your total Child Benefit per week would be:
- £24.00 (for the first child)
- £15.90 (for the second child)
- Total: £39.90 per week (£1,675.80 per year)
High Income Child Benefit Charge (HICBC)
If either parent earns more than £50,000 per year, the High Income Child Benefit Charge (HICBC) applies. This means you may have to pay back part or all of your Child Benefit through a special tax charge.
How HICBC Works:
- If your income is between £50,000 and £60,000, you will lose 1% of your Child Benefit for every £100 earned above £50,000.
- If your income reaches £60,000 or more, you will have to repay the entire amount.
Example Calculation for HICBC:
If you earn £55,000 and receive £1,675.80 per year in Child Benefit:
- Excess income above £50,000: £5,000
- Reduction percentage: 50% (5,000 / 100 = 50%)
- Amount to repay: 50% of £1,675.80 = £837.90
- You keep: £837.90 (£1,675.80 – £837.90)
How to Apply for Child Benefit
To apply for Child Benefit, follow these steps:
- Fill out the CH2 form (available on the GOV.UK website).
- Provide the child’s birth certificate (if it’s your first claim).
- Send the completed form to HM Revenue and Customs (HMRC).
You can apply as soon as your child is born, and payments can be backdated for up to 3 months if you were eligible but did not claim earlier.
Payment Schedule
Child Benefit is paid every four weeks (usually on a Monday or Tuesday). If you are a single parent or receive certain other benefits, you may request weekly payments.
Why You Should Claim Child Benefit (Even if You Earn Over £60,000)
Even if you or your partner earn more than £60,000 and have to repay the full amount, you should still consider claiming Child Benefit because:
- It helps protect your National Insurance (NI) credits, which count towards your State Pension.
- It ensures your child gets a National Insurance number automatically at age 16.
Conclusion
Child Benefit is a valuable financial support for families in the UK, but your earnings can affect how much you actually receive. Understanding how Child Benefit is calculated, including the impact of the High Income Child Benefit Charge, can help you plan your finances effectively. Use a Child Benefit Calculator to estimate your payments and tax liability to make the best decision for your family.
For more details and the latest updates, visit GOV.UK or consult a tax professional.