HM Revenue & Customs (HMRC) has revealed that over 214,000 UK households could lose Child Benefit, even if they are eligible. This comes at a time when families are already struggling with rising rent, electricity, and food costs, sparking public frustration.
What is Child Benefit?
Child Benefit is a government payment that helps parents or guardians cover the costs of raising children.
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For the eldest or only child: £25.60 per week
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For each additional child: £16.95 per week
For one child, this totals over £1,100 per year, and the amount rises for larger families.
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Why Are Thousands of Households Affected?
Key reasons include:
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High Income Child Benefit Charge (HICBC): Payments may be reduced or recovered through tax if one parent earns over £60,000.
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Lack of registration: Many parents miss payments because they do not register, putting National Insurance (NI) credits at risk.
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HMRC backlog: Slow processing and stricter checks mean eligible families may miss out.
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Policy requirements: HMRC asks families to update details or provide proof of eligibility.
The Real Impact on Families
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Households with two children could lose around £1,800 per year.
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Parents’ State Pension credits may be affected, reducing future retirement income.
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Some families are forced to repay large amounts due to administrative errors.
Changes Coming in September 2025
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More households will undergo automatic compliance checks for HICBC.
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Digital systems will flag parents whose income exceeds £60,000.
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Payments may be stopped if parents do not confirm their details, even if eligible.
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Who is Most at Risk?
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Households where one parent earns over £60,000.
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Parents who did not register for Child Benefit.
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Families who missed securing NI credits.
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Migrant families who did not complete required documentation.
How to Secure Child Benefit in 2025
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Ensure your income for the 2024–25 tax year is correctly reported.
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Register your child’s birth with HMRC.
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Create a Child Benefit account.
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Check your National Insurance contributions.
How to Apply
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Apply online via the HMRC portal.
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Provide proof of identity and the child’s birth certificate.
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Choose to register for payments or NI credits only.
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Keep income details up to date to avoid payment interruptions.
Why Some Parents Stay Out
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High-income parents sometimes avoid claiming to reduce HICBC.
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Not registering can result in lost NI credits, affecting future State Pension.
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Example:
Emma and David from Manchester earn £58,000 and £42,000 respectively. HMRC recovered Child Benefit through tax because David’s income exceeded £60,000. Emma stayed unregistered, impacting her child’s NI credits.
Political Debate and Future
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Critics argue the system is unfair.
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HICBC disproportionately affects single-income households.
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Administrative delays penalize eligible parents.
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Reducing Child Benefit during rising living costs could increase child poverty.
Proposed reforms:
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Raise income thresholds
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Enable automatic application of NI credits
What to Do if HMRC Stops Payments
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Appeal immediately via HMRC’s online system.
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Keep all documentation proving your child’s eligibility.
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Contact a local MP if necessary.
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Seek advice from organizations like Citizens Advice.
Conclusion
HMRC’s announcement impacts over 214,000 households. UK parents are advised to check eligibility, update records, and secure National Insurance credits to protect Child Benefit and future pensions.