Martin Lewis addresses ‘unfair’ Child Benefit rules

The Money Saving Expert addressed four areas of concern he has ahead of Jeremy Hunt’s budget in March.

Mr Lewis addressed the lifetime ISA penalty hitting young first time buyers, mid-contract broadband and mobile price hikes, and substantial real term cuts to student living loans.

He also addressed unfair Child Benefit rules penalising single income families.

In his letter to the Chancellor, Mr Lewis said: “This was by far the biggest single topic the public asked me to raise with you. In our interview, I read a question from Alan which highlights the unfairness in the way Child Benefit gains start being withdrawn spending solely on one parent/guardian’s income hitting £50,000 (and wiped at £60,000).”

The question from Alan said: “My son’s partner tragically died 34 days after giving birth to twins. My son has taken a new job that now pays him £60,000 and is struggling with the cost of living and mortgage repayments after loss of a second income.

“HMRC has asked him to repay the Child Benefit. This seems grossly unfair that a couple can bring in nearly £100,000 but a single breadwinner loses out once they earn more than half of this. Are there any plans to change this?”

Continuing, the Money Saving Expert said: “I can see a few people arguing that it is right that Alan’s son’s family should lose their child benefit even though their total family income is lower. I was very pleased that you accepted there is an ‘unfairness’ in the structure that penalises single-parent families, single-earner families, and families where there is one dominant earner.

“While I agree, as you point out, that there are many structurally problems in the tax system, this one is exacerbated by the face the £50,000 (and £60,000) thresholds have been frozen since 2013 – which fiscally drags 100,000s more families into this situation each year. I’m sure it would be very popular measure if it were addressed in the budget.”