The High Income Child Benefit Charge was introduced as a way to reduce child benefit payments to higher-income families. Before April 2024, the charge applied to families where one parent had an adjusted net income of over £50,000 per year. The charge increased gradually, with families losing 1% of their child benefit for every £100 of income over £50,000. Once a parent’s income reached £60,000, the entire child benefit was effectively cancelled out by the charge.

This system led many families to opt out of receiving child benefits rather than go through the process of claiming it only to pay it back through the tax system. While this simplified matters for many, it also meant some families missed out on important National Insurance credits linked to child benefit claims.

The New HICBC Thresholds

From April 2024, the government introduced significant changes to the HICBC thresholds:

• The income threshold at which the HICBC begins to apply has increased from £50,000 to £60,000.
• The rate at which the charge increases has been reduced. Now, families lose 1% of their child benefit for every £200 of income over £60,000, rather than for every £100 over £50,000.
• The point at which the charge cancels out the entire child benefit has increased from £60,000 to £80,000.

These changes mean that many families who previously saw no benefit from claiming child benefit may now be able to retain some or all of it.

Who Should Consider Restarting Their Child Benefit Claim?

If you or your partner have an adjusted net income between £60,000 and £80,000, and you previously opted out of receiving child benefits, you should seriously consider restarting your claim. Here’s why:

1. If your income is just over £60,000, you’ll now be able to keep most of your child benefit.
2. Even if your income is closer to £80,000, you’ll still be able to keep some of your child benefits, whereas previously, you would have lost it all.
3. Claiming child benefit can provide valuable National Insurance credits, which can be crucial for your state pension entitlement, especially if you need to work or earn below the National Insurance threshold.

How to Restart Your Child Benefit Claim

If you decide that restarting your child benefit claim is the right move for your family, here’s how to go about it:

Online Service: The quickest and easiest way to restart your claim is through the online service provided by HMRC. You’ll need your Government Gateway ID and password to access this service.

Online Form: If you don’t have a Government Gateway account, you can complete an online form to restart your payments.

Phone: You can contact HMRC’s Child Benefit Office directly on 0300 200 3100. Be prepared for potentially long wait times, especially during busy periods.

Post: If you prefer, you can write to HMRC at HM Revenue and Customs – Child Benefit Office, PO Box 1, Newcastle upon Tyne NE88 1AA

After restarting your claim, it can take up to 28 days before you receive your first payment, so it’s important to act promptly if you decide to reclaim. While restarting your child’s benefit claim can be beneficial, there are a few important points to keep in mind:

Backdated Payments: The Child Benefit Office will inform you in writing whether you’re eligible for any backdated payments and, if so, how much you’ll receive.

Tax Implications: Remember that if your income is between £60,000 and £80,000, you’ll still need to pay back a portion of the child benefit through the HICBC. Make sure you’re prepared for this when you file your Self Assessment tax return.

Future Income Changes: If you expect your income to fluctuate, remember that you may need to opt in and out of receiving child benefits as your circumstances change. Always keep HMRC informed of any significant changes to your income.

National Insurance Credits: Even if you decide not to receive the payments, it can still be beneficial to make a child benefit claim and then opt out of receiving payments. This ensures you receive the valuable National Insurance credits associated with the claim.

Claiming child benefit isn’t just about the money. It ensures your child gets a National Insurance number and can help protect your State Pension. Recent changes to the High Income Child Benefit Charge have opened up new opportunities for families. If you previously opted out due to the HICBC, consider reassessing. If you’re unsure, consult a financial advisor. Stay informed and proactive about your child’s benefit entitlements for your family’s financial security.