The Catholic Union has welcomed the decision by the Chancellor, Jeremy Hunt, to scrap the High Income Child Benefit Charge as part of his Budget statement.
The policy, which was introduced in 2013, restricts the amount of child benefit that can be received by certain households. Under plans announced by the Chancellor, the threshold of the policy will rise this year and be abolished altogether in 2026.
The Catholic Union has consistently called for the policy to be scrapped, in large part because of the disproportionate impact it has on single-earner households.
As the Catholic Union has highlighted in previous Budget submissions, the current policy has meant that a household where two people earn £40,000 a year each can retain their child benefit allowance, but a household where one person earns £50,000 a year is penalised.
The Chancellor has said that the changes to the policy “will benefit nearly half a million families, saving an average of £1,300 next year.” Crucially, the change will see child benefit allowance calculated on the basis of household rather than individual income – another change which the Catholic Union has called for.
The Catholic Union has highlighted the case for a fairer tax and benefit system ahead of almost every fiscal event in this Parliament. Ahead of this year’s Budget, the Catholic Union worked with Catholic Bishops in England and Wales, and Scotland, along with CSAN and CAFOD to make the case for a Budget focused on poverty reduction.
While the Catholic Union welcomed the Chancellor’s announcement on child benefit, it said there was “a long way to go” in seeing measures that support all families across the country. The Chancellor was also silent on international measures, such as aid spending and debt relief, which had also been called for by Catholic groups.
Catholic Union Director, Nigel Parker, comments: “This is a significant announcement from the Chancellor. For years we have been making the case for a fairer tax and benefit system for families. These changes to child benefit do not address all of our concerns, but they are a step in the right direction. We will look to build on this, and encourage all parties ahead of the next election to set out how their policies will support family life in this country. It is clear that there is a still a long way to go in getting all families the support they need. Policies like the two-child cap are deeply unfair, and clearly we need to see action on the international level as well, but this is a welcome start.”