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Friday, 13 January 2012 10:59

Child Benefit cuts 'looked at for fairness'

 
Culture Secretary Jeremy Hunt has said the government is looking at ways to make controversial plans to cut child benefit "fairer".
 
He spoke as David Cameron also hinted moves to scrap the benefit for families with one parent earning more than about £44,000 a year could be amended.
 
 
The PM acknowledged there was an issue with the threshold - amid criticism it unfairly hits single earner families.
But Treasury sources said there had been no change in policy. 
 
Critics say the proposals would mean that some parents will lose thousands of pounds if their income rises above the 40% tax threshold - currently about £44,000, but due to fall to about £42,000 in 2013.
 
'Unfairness' 
 
 
A couple with three children could lose around £2,500 if one parent earned just a few pounds over the threshold - even if the other was unemployed. 
 
But a couple who both earn just under £44,000 a year each, and enjoy a total household income of more than £80,000, would keep all their benefit.
 
In an interview with Parliament's House Magazine, Mr Cameron suggested he did have some concerns over how the proposed changes were structured. 
 
 
"Some people say that's the unfairness of it, that you lose the child benefit if you have a higher-rate taxpayer in the family (but) two people below the level keep the benefit," he said.
 
"So, there's a threshold, a cliff-edge issue. We always said we would look at the steepness of the curve, we always said we would look at the way it's implemented and that remains the case. 
 
"But again, I don't want to impinge on the chancellor's Budget." 
 
'Fairness issue'
 
 
BBC political correspondent Carole Walker said the so-called "cliff-edge" could be replaced with some sort of tapering of benefits, but any kind of rowing back on the cuts would cost the government money.
 
In an interview with BBC Radio Surrey's Breakfast programme, Culture Secretary Mr Hunt said: "We are looking at ways to make it fairer.
 
"Particularly, there's this sort of 'cliff-edge effect', that if someone gets over the top-rate limit they lose child benefit, but there could be two people who are just under the limit in a household and have a combined income of much, much more than that who continue to claim it. 
 
 
"So we just want to look at the fairness issue there and see if there's anything we can do to improve it."
 
And Education Secretary Michael Gove told the BBC: "The policy was right, but you need to make sure that when you implement it, that you deal with any rough edges."
Chancellor George Osborne will deliver his third Budget - where tax and spending changes are traditionally announced - in March.
 
Mr Osborne has defended the child benefit cut - which could save up to £1bn a year - as tough but necessary, saying those on higher incomes must contribute their share to helping cut the budget deficit. 
 
Labour have criticised the proposals, saying they have caused "huge anxiety" and that all families need support in tough times. 
 
Shadow Treasury minister Chris Leslie said his party had "repeatedly warned that the government's current plans to cut child benefit are unfair and highly bureaucratic".
 
"These ill-thought-through plans are due to hit families in less than 12 months' time, so David Cameron and George Osborne urgently need to come up with some new proposals," he said.