Child Benefit

RebekahR

I'm so confused over my husbands salary! I'm not claiming child benefit as he says he earns too much. But now he's taken a pay cut to do compressed hours. I send him this from MSE: "You still gain from Child Benefit with income up to £80,000. Child Benefit is means-tested, meaning once one parent or guardian earns over £60,000, some of it is clawed back via tax as the High Income Child Benefit Charge, until you hit £80,000 earnings when it is all paid back. So that means at £70,000, you'd still be due over £1,126/yr if you've two children. The lower threshold was increased from £50,000 to £60,000 in 2024, and some parents still don't claim, thinking it isn't worth it. Almost 750,000 families are missing out on some money so, being plain, as long as no parent in the household earns over £80,000, it is worth getting it.

It's worth noting the £60,000 to £80,000 threshold is based on your 'adjusted net income' after pension contributions, charitable donations under Gift Aid and, for the self-employed, trading losses. So it's worth noting that increasing the highest earning parent's pension or charitable contributions can increase the Child Benefit you can keep. See more in minimising the Child Benefit charge."

Now he has come back saying this: "It's a complicated answer, but I'm in/over that range

I was in the middle of the range, butwith the 10% pay cut I'm near the bottom of the range, but with the shares that are currently releasing every year I'm forecast to be over that range this year

So in a few years time it might be worthit

Last year I was just over the top all things included

The shares - I got 3 lots of shares, that each release a quarter every year for 3 years, so they've now peaked because all 3 are releasing

That's "taxable income", which is all that matters"

Is he right? I swear I'm too dumb for all this finance tosh!

kimwp

Are you earning enough to get national insurance credits? (For your state pension)

kimwp

Ps, you're not dumb, this stuff is quite complicated and the guidance not that clear. Plus, your husband isn't explaining his income fully (he may not even be right/understand it)

https://forums.moneysavingexpert.com/discussion/6324666/adjusted-net-income

QrizB

Personally, I'd claim the Child Benefit. You can always pay it back through your tax later if you end up earning too much.

p00hsticks

kimwp said:

Are you earning enough to get national insurance credits? (For your state pension)

And if you are not, and your youngest child is under 12, then there is an option to just claim the NI credits but not the money which you should take up.  

Dazed_and_C0nfused

QrizB said:

Personally, I'd claim the Child Benefit. You can always pay it back through your tax later if you end up earning too much.

The (potential) wrinkle with that though is you are aiming it at the op.  But it would be the op's husband who would actually have to pay it back.

And based on the original post he seems to think it will all have to be paid back and as a result doesn't want to have that hassle.  Albeit it isn't really that much of a hassle.  Especially now HMRC have introduced a new system so people can avoid having to file a tax return (where HICBC was the only reason for one).

https://www.gov.uk/child-benefit-tax-charge/pay-tax-charge-paye

kimwp

Dazed_and_C0nfused said:

QrizB said:

Personally, I'd claim the Child Benefit. You can always pay it back through your tax later if you end up earning too much.

The (potential) wrinkle with that though is you are aiming it at the op.  But it would be the op's husband who would actually have to pay it back.

And based on the original post he seems to think it will all have to be paid back and as a result doesn't want to have that hassle.  Albeit it isn't really that much of a hassle.  Especially now HMRC have introduced a new system so people can avoid having to file a tax return (where HICBC was the only reason for one).

https://www.gov.uk/child-benefit-tax-charge/pay-tax-charge-paye

Exactly. I have a friend whose husband told her not to claim child benefit (despite not working and having a child under 12, so losing out on state pension as a result) because he didn't want the hassle of having to pay it back. 

It is possible to claim it (and so get the ni credits) but not actually take the money though, so nothing to pay back.