Question to the HM Treasury:

To ask the Chancellor of the Exchequer, for what reason the Government bases Child Benefit on only one person's income and not the total income of the household; and for what reason the High Income Child Benefit Charge is not increased more often to reflect real terms wages and increases in the cost of living.

The High Income Child Benefit Charge (HICBC) is calculated on an individual rather than a household basis, in line with other tax policy. Basing HICBC on household incomes would mean having to assess the adjusted net income of everyone in each of the 8 million households registered for Child Benefit, as HMRC does not hold this data. This would effectively introduce a new means test, creating significant administrative costs and placing a disproportionate burden on the majority of families who receive Child Benefit.

The Government is committed to managing the public finances in a disciplined and responsible way by targeting support where it is most needed. The adjusted net income threshold of £50,000 used in the administration of the HICBC only affects a minority of those who receive Child Benefit, with comparatively high incomes. The Government therefore believes that the current threshold for HICBC remains the best option. As with all elements of tax policy, the threshold is kept under review.

The Government recognises the challenge that many are facing with the cost of living. This is why we are providing support worth over £20 billion across this financial year and next that will help families with the cost of living. This includes cutting the Universal Credit taper rate and increasing work allowances to make sure work pays, freezing alcohol and fuel duties to keep costs down, and the £9.1 billion package announced in February 2022 to help households with rising energy bills. In addition, we are increasing the National Living Wage by 6.6 per cent to £9.50 an hour in April 2022, which will benefit more than 2 million workers.