UK households can apply for extra £170 a month as income threshold increased

HMRC has increased the income limit so that someone can earn up to £60,000 and still claim the payment

UK households are being urged to check if they can apply for extra cash of £170 a month on average. HM Revenue and Customs has increased the income threshold for claims to be made before deductions are made.

From April 6, the amount of Child Benefit was increased and the income threshold was raised from £50,000 to £60,000 before tax deductions are taken out. This means that either parent can now earn up to an 'adjusted net income' of £60,000 a year before the High Income Child Benefit Charge is applied.

Adjusted net income is your total taxable income before any personal allowances. It includes interest from savings and dividends. If both you and your partner have an individual income of more than £60,000, then whoever has the higher adjusted net income is responsible for paying the charge.

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Child Benefit entitlement is reduced to zero if either you or your partner have an individual income of £80,000 or over. You can either fill in a tax return to pay it back or opt out of receiving any Child Benefit payments. However, even if the payment is cancelled out by your income, you can still get the other advantages provided by Child Benefit, such as National Insurance credits that count towards a State Pension.

The amount paid out in Child Benefit is currently £25.60 a week for the eldest or only child and then a further £16.95 for any additional children. With families having two children on average, this is £42.55 a week. Child Benefit is usually paid every four weeks on a Monday or Tuesday, so this would mean a payment of £170.20 going into your account.

The High Income Child Benefit Charge (HICBC) has been halved and is now set at 1 per cent of the benefit being reduced for each £200 earned over £60,000.

HMRC said: "Raising the HICBC threshold will ensure the charge continues to withdraw Child Benefit from high-income families as it was designed to do, by gradually withdrawing Child Benefit from individuals who have an adjusted net income in excess of £60,000, and fully withdrawing Child Benefit from individuals who have an adjusted net income of £80,000 or higher, without unfairly penalising those on middle incomes. By halving the rate at which HICBC withdraws the Child Benefit gain, the government is improving people's incentives to continue working or take up more hours.

"Families have two options regarding Child Benefit. One option is to claim Child Benefit and receive payments, paying any HICBC due at the end of each tax year through Self Assessment. The other option is to claim Child Benefit but choose not to receive payments, and therefore not have to pay HICBC. This is known as opting out. However, individuals must pay any tax owed for each tax year up to the date they or their partner opt out of receiving Child Benefit payments.

"New claims to Child Benefit are automatically backdated by three months, or to the child's date of birth (whichever is later). For Child Benefit claims made after April 6, 2024, backdated payments will be treated for HICBC purposes as if the entitlement fell in the 2024 to 2025 tax year if the backdating would otherwise create an HICBC liability in the 2023 to 2024 tax year."

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