Chancellor George Osborne has revealed child benefit payments will start to be reduced for families where there is a person earning over £50,000.
Giving his Budget statement today, Osborne said families where there is a wage earner with a salary of £50,000 are to lose 1 per cent of the benefit for every £100 that they earn over the new threshold.
Families where there is a person earning over £60,000 will not receive any of the benefit.
Osborne said today that the changes would enable 750,000 families to keep some or all of the benefit.
He said: “We want to avoid a cliff-edge that means people lose all their child benefit when they earn just a pound more.”
Before the Budget, child benefit was due to be scrapped for anyone earning more than £42,475, the threshold at which people pay 40 per cent tax, in January 2013.
The proposals would have meant that a single earner on more than £42,475 would lose child benefit but a couple each earning £40,000 would retain the benefit.
Child benefit is currently paid to parents at £20.30 a week for their eldest child and £13.40 a week for each of their other children.