Guidelines for eligible families to claim the child benefit during COVID-19 crisis

Many people who haven’t historically claimed child benefit because the income of someone in the household was too high will probably now be eligible said the leading tax and advisory firm Blick Rothenberg.

Robert Salter, an employment and expatriate tax service director at the firm said that: ‘Lost income associated with the COVID-19 pandemic means that many families, who haven’t historically claimed child benefit in respect of their minor children, because one of them has had an income above £60,000 per annum, should reconsider their position in this regard.

‘However, it is only possible to claim child benefit retrospectively for a period of three months so people need to claim now (or in the near future), or they could lose money that the family is entitled to.

Salter added that: ‘Child benefit (£21.05 for the eldest child and £13.95 for subsequent children) is available to all families in theory, but from a practical perspective, is only in full, where the highest earner in the family earns under £50,000 per annum.

‘Where the highest earner in the household has income between £50,000 – £60,000 per annum, the Higher Income Child Benefit Charge (HICBC) a tax claw back, gradually reduces the real value of child benefit to £nil.

‘The HICBC has meant that many families who have traditionally had at least one earner earning over £60,000 per annum have simply waived their entitlement to child benefit, e.g. to avoid subsequent tax return filing requirements.

He noted that: ‘However, with many employees being furloughed on reduced salaries and the self-employed subject to income losses, many families who have historically opted out of child benefit may now become entitled to child benefit again, whether in full or in part.

‘While furloughed salaries and payments under the government’s coronavirus self-employed support scheme would be considered income for child benefit purposes (along with regular salary, self-employed profits, letting income and the like).

‘Many families will still have the highest earner having significantly lower incomes in 2020–2021 than has previously been the case.

He added that: ‘Some families might be tempted to wait for a few months, to see how long the COVID-19 lockdown lasts and get a better understanding of what their income could be for 2020–2021.

‘But it is only possible to claim child benefit retrospectively for a maximum period of three months. So, unless they are careful, many families could lose money they are validly entitled to needlessly.

He concluded that: ‘If the position is unclear, claim the child benefit now, if one’s income subsequently is higher than £60,000 for the year, one can always settle the position via filing a tax return and paying the HICBC.’


Image credit: Freepik