Child Benefit Changes

The changes to child benefit could cost the Government nearly £50 million over the next three years. This expenditure will amount mainly from the extra staff that will be needed at HMRC to deal with the increased workload the changes have brought about.

The start of 2013 sees families with at least one parent earning more than £60,000 losing child benefit entirely and those with one parent earning more than £50,000 having the benefit reduced.

Although the scheme has been put in place to save the country money, the radical remodeling of how child benefit is paid will actually see the government spending considerable amounts on establishing it. The biggest cost is around £11million for each of the next three years for ‘HMRC Operations Resource’, which is the cost of the staff needed to do the extra work.

Over the next three years, there is also estimated to be a £9million total bill for IT and £2.3million for communications.

£1million is currently being used to ‘produce, print and issue around one million awareness letters’ although thousands of affected families have not even received the letter.

The estimated total bill for the next three years will be £47.8million. This is the equivalent of child benefit for more than 27,000 families with two young children for a year.