The HMRC suggests, in reference to the most recent statistical study, that 96%-97% of the eligible population claim child benefits. You may have heard about the impending slash in these benefits – among others coming soon – for people earning in excess of £44,000. Child benefits have been officially in place since 1979, so it is fair to say this is quite a drastic reform.

The BBC has compiled a Q&A relevant to the issue, and we here at 247Moneybox.com thought we’d take it upon ourselves to do a bit of jargon-busting and clarify some of the finer points in summary of that article.

• If you or or your spouse earn more than £44,000 then you will no longer qualify for the benefit; but as long as you both earn less than £44,000 individually then you’re fine. Many single parents feel targeted by the measure as your household could earn more than the threshold (up to £87,000) but still be allowed to claim (so I guess they haven’t thought that one through).
• This is estimated to affect 1.2 million families – approximately 15%.
• How this cut will be enforced is still under debate. Higher-rate taxpayers may have to declare the benefit on a self-assessment tax form, but it sounds a bit drawn out and susceptible to error. Surely it’d be easier to link the affected households to their tax records, as the BBC article suggests.
• The child benefit works out at £20.30 per week per child – a ‘child’ defined as being under 16 years and in your direct care. So if you are affected, you will stand to lose out on around £80 a month or £1,055.60 a year; families with two children claim £33.70 per week and will lose out on £1,752.40 a year, while families with three children stand to lose £2,449.20 per year (usually claiming £47.10 per week).

More information on current eligibility can be found on the HMRC website or by calling the Child Benefit Office on 0845 302 1444.