The Chancellor announces a cap on total household benefits payments and withdrawal of child benefit in higher tax rate familesWednesday, October 6th, 2010
On 4 October, the Chancellor announced two reforms to the welfare system from 2013:
- Total household benefit payments will be capped on the basis of average take-home pay for working households (estimated to be around £500 per week in 2013).
- Child Benefit will be withdrawn from households that include a higher rate taxpayer.
According to the announcement, the restriction on the level of benefits payments will be handled by local authorities by reducing, as appropriate, the amount of housing benefit paid. The restriction on payment of Child Benefit will, the announcement states, be implemented by HMRC “through the existing PAYE and Self-Assessment structures”.
How will this be done? There has been no further explanation at present.