UK benefits will increase inline with September 2022’s inflation figure of 10.1 percent this year to help people make ends meet. Millions of families receive Child Benefit which is paid by HM Revenue and Customs (HMRC) to parents of children aged 16 and under, as well as those who stay in full-time education until 20 years old.
Child Benefit will rise from £21.80 to £24 a week for the first child and from £14.45 to £15.90 each for any additional children this year.
Child Benefit is usually paid to the parent who lives with the children if parents are separated and cannot be paid to more than one person.
However, it’s important to note if a claimant or partner earns more than £50,000, they may have to pay the High Income Child Benefit Charge (HICBC).
At least 45,000 families could be at risk of building up tax arrears by not knowing they have to declare and pay this charge, an accountancy firm recently warned.
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There is a Child Benefit tax calculator on GOV.UK where people can check what the High Income Benefit Charge would be.
Meanwhile, older Britons could miss out on a full state pension by giving the wrong Child Benefit details.
Around 200,000 parents apply for Child Benefit in the wrong parent’s name every year which could cost them their full state pension when they retire.
Parents who stay home to look after children may be missing out on National Insurance credits, which means they may not qualify for their full state pension when they retire.
It’s a costly mistake which could mean parents miss out on thousands of pounds, because Britons need 35 years of NI credits to claim the full new state pension according to HM Revenue and Customs (HMRC).
More than seven million families receive Child Benefit but 1.1 million of them who earn over £50,000 are affected by this.
Britons still need to claim the benefit even if they opt out of receiving any money.
This ensures that people still receive National Insurance credits towards their state pension and that children still get a NI number when they reach 16.
What is the High Income Child Benefit Charge?
Since 2013, if one of the parents earns over £50,000, they will pay the charge, which means paying back a chunk of their Child Benefit.
The amount someone repays rises with their earnings, until someone earning £60,000 repays it all.
To repay it, people need to complete a self-assessment form every year.