Wednesday, 1 February 2012

Child Benefit cuts slammed

The respected Institute for Fiscal Studies has branded the government's planned cut in Child Benefit as "neither efficient nor fair".

Child Benefit is due to be removed from families with a higher rate taxpayer from January next year.

The IFS is warning that the cliff-edge effect of withdrawing the benefit if one parent goes above £42,475 in earnings will hit hundreds of thousands of families.

200,000 could find themselves with a lower overall income after a pay rise.

Another 170,00 could actually increase their income by taking a pay cut.

The IFS recommends a gradual withdrawal of the benefit for higher rate taxpayers.

It says one route would be to integrate it with means-tested Child Tax Credit.

Ministers have already indicated that they are looking at making the planned Child Benefit changes fairer.

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