Martin Lewis explains Child Benefit update in Budget that 'no one else spotted'

The Treasury has confirmed it won't move forward with plans to launch a consultation on whether to change Child Benefit eligibility to being based on household income

Martin Lewis has reacted to a major update from Labour in the Autumn Budget regarding Child Benefit.

The Treasury has confirmed it won't move forward with plans to launch a consultation on whether to change Child Benefit eligibility to being based on household income, rather than on individual income. It comes after the thresholds for when you have to start paying back Child Benefit were increased last year.

Previously, you used to have to start paying back Child Benefit at a rate of 1% for every £100 you earn over £50,000 a year - this is known as the High Income Child Benefit Charge. You now only start paying back Child Benefit when you earn more than £60,000 a year, at a rate of 1% for every £200 you earn. At £70,000, half the benefit is repaid, and at £80,000, the entire benefit is wiped out.

Crucially these thresholds apply per person - not for the entire household. It means a two-parent household could earn just under £120,000 and still be entitled to the full level of Child Benefit, while a single person earning just over £60,000 would start to pay the High Income Child Benefit Charge. Martin Lewis has long campaigned for Child Benefit to be based on household income and warned existing rules "penalise" single-parent households.

Child Benefit is worth £25.60 per week for the eldest or only child and £16.95 for each additional child. Speaking on BBC 5 Live, Martin Lewis said: "I'm very disappointed. I don't like unfairness. The way our child benefit is paid is unfair to single parents and single-earner families."

Host Matt Chorley noted that Martin Lewis has "spotted this but no one else has". Labour said the decision to not move ahead with changing the system was down to cost. The Budget document stated: "The Government will not proceed with the reform to base the HICBC on household incomes. This is because it would have come at a significant fiscal cost of £1.4billion by 2029-30 if setting the threshold to £120,000-£160,000, where no families would lose out."

Child Benefit - what you need to know

You need to live in the UK and be responsible for a child - this usually means they live with you, or you pay at least the same amount as Child Benefit towards looking after them. If two people look after a child, only one person can claim Child Benefit. You can claim Child Benefit if you fostered a child, as long as the local council is not paying anything towards their accommodation or maintenance.

Child Benefit is also available if you adopted your child, as well as in certain circumstances where you're looking after a child for a friend or relative. You normally claim Child Benefit until your child turns 16, but you may be able to continue your claim until they turn 20 if they're in approved education or training. This can include A-Levels, NVQs or even home education, but it does not include university or BTEC qualifications.