Policy paper

HMRC issue briefing: explaining Child Benefit

Published 24 April 2019

This briefing explains what Child Benefit is, how it works, and who should claim.

1. What Child Benefit is

Child Benefit is a universal benefit which enables the person claiming it to:

• receive Child Benefit payments
• protect their state pension by receiving National Insurance credits until their child turns 12
• help their child to get their National Insurance number automatically at 16

Child Benefit is paid at a weekly rate of £20.70 for the first child and £13.70 for each additional child.

Where 2 or more people share responsibility for the care of a child, Child Benefit can only be claimed by one person. There are priority rules that apply when parties cannot agree who should make the claim.

2. Who should claim Child Benefit

Child Benefit is claimed for 12.8 million children and by 7.9 million families in the UK. Parents can claim Child Benefit if they are responsible for a child under 16 (or under 20 and they’re in approved education or training).

Every parent and carer with responsibility for a child should complete the Child Benefit claim form so that they receive the non-financial benefits listed above.

Not doing this could mean missing out on receiving National Insurance credits which build qualifying years towards the state pension.

Parents should also consider who should fill in the form. For example, if there is one non-working parent in the household, they should consider making the claim to receive National Insurance credits to protect their future entitlement to the state pension.

Households can transfer previous years’ National Insurance credits from one parent to another to ensure the right parent protects their state pension entitlement.

Households that already claim can also choose to transfer the Child Benefit award into the name of the parent or carer who is not in work to ensure their entitlement to the state pension is protected in the future.

This page does not give customer guidance - for this, go to the Claim Child Benefit page.

3. Wider advantages

The benefits of claiming Child Benefit are not just financial. In addition to receiving National Insurance credits to protect the claimant’s future entitlement to the state pension, it will also help children to get their National Insurance number automatically at 16.

To ensure that they receive these valuable non-financial benefits, every parent with responsibility for a child should complete the claim form.

4. High Income Child Benefit Charge

The government introduced the High Income Child Benefit Charge in 2013. This introduced a tax charge on Child Benefit payments and applies to anyone with an income over £50,000 who claims Child Benefit, or whose partner claims it.

Anyone who has to pay the charge will need to pay an amount equivalent to some or all of the Child Benefit that they or their partner is entitled to receive

For example, in 2018 to 2019, if you have 2 children and your income is £55,000, you will receive £1,788 in Child Benefit payments and pay the charge of £894. So you keep half of Child Benefit payment. If your income is lower - £53,000, for example - you keep 70% of Child Benefit.

Families can use the Child Benefit tax calculator on GOV.UK to work out how much tax they may have to pay.

You can read more information on the charge, how it works and how to pay it in the Issue briefing: High Income Child Benefit Charge.

5. Opting out of the High Income Child Benefit Charge

Parents who may be liable to the charge can decide to opt out of receiving the Child Benefit payments so that they do not have to pay the charge each year, but can still receive the non-financial benefits.

To ensure the non-financial benefits are still received, they must still complete the Child Benefit claim form and consider, as above, who is completing the form (for example, the non-working parent) to protect their state pension by receiving National Insurance credits during this period.

6. What people need to do

Households need to:

• consider who is completing the Child Benefit form to protect the state pension entitlement of the non-working parent
• complete the Child Benefit form, even if they decide not to receive the Child Benefit payments – there are important non-financial benefits
• understand that if someone claiming Child Benefit or their partner has income of £50,000 or above and they receive Child Benefit payments, they will need to notify HMRC by registering for Self Assessment tax returns