Reform Needed for Child Benefit: Impact on Single Parents
Chancellor Rachel Reeves has decided against reforming child benefit, leaving it to be based on individual income rather than household income. This decision has been met with criticism from money expert Martin Lewis, who believes it will negatively impact single-earner families.
Under the current system, child benefit is withdrawn if an individual earns over £60,000 annually, resulting in a high-income charge. This charge is applied regardless of whether the individual is a single parent or part of a couple. Many single parents have expressed their dissatisfaction with this system, arguing that it is unfair and could limit their career choices to avoid reaching the income threshold.
Martin Lewis has been vocal about his disappointment in the lack of reform, emphasizing the inequities faced by single parents and single-earner families. He previously campaigned for a change to base the charge on household income rather than individual income, but this proposal was not implemented in the recent Budget.
Despite calls for reform, the government has decided to maintain the current system due to the significant fiscal cost associated with changing it. The proposed reform would have resulted in a cost of £1.4 billion by 2029-30, making it financially unfeasible to implement.
In addition to the child benefit issue, the Budget also included other changes such as an increase in national insurance rates for employers and adjustments to the tax relief for first-time property buyers. Martin Lewis warned individuals on minimum wage to ensure they are receiving the full rise next year, as there may be factors such as uniform costs or work hours that are not being considered.
Overall, the decision to not reform child benefit has raised concerns among single parents and single-earner families, highlighting the need for a fairer system that takes into account household income rather than individual earnings. While the government has cited financial constraints as a reason for maintaining the current system, the impact on those affected by the high-income charge remains a point of contention.