Treasury is proposing changes to make the income test for child benefit more flexible in response to concerns the current system is unfair to families who experience a sudden drop in income..
Those concerns were highlighted by Douglas couple Deb and Paul Cripps who were told their son James’s child benefit will be cut by 25 per cent this year as it was calculated on their earnings before the baby was born.
Mrs Cripps said she could not understand how it can be fair to penalise stay at home new parents just because they used to have a job.
Assessment of entitlement to child benefit is based on a family’s income in a previous tax year, and currently does not take account of subsequent reductions in circumstances.
