14:31 05 October 2010
The proposed changes to the child benefit system has delivered much political banter and comment over the last few days and with a little girl offering her tooth fairy money in order to combat the economic difficulties, it stands as a
stark reminder of the dire situation we are currently in.
With more changes expected to be announced over the next few week, we take a look at the changes in detail and evaluate how they will affect you.
Why have the changes been made?
The changes have been made due to the Government's decision regarding the economy. They have made it clear that extensive cuts will be made and in an effort to make the country fairer, have decided to impose the changes on those who earn the most.
How have the changes been judged and who will it affect?
It has been judged upon the already in place higher earners tax cut-off. Those who earn £44,000 or more pay a higher amount of tax than others, therefore it was deemed that rather than means test everyone it would be more simple to use this system.
Each family will be judged per earner, so this means that if two parents earn less than £44,000 they will recieve the child benefit - regardless of combined household income. Families in which only one parent is earning and that total is over £44,000 will not be entitled to the benefit.
Is it actually fair?
There has been high critcism of the changes. Those who are against the move say it is unfair to families with only one parents earning any money, as it is judged by how much one parent earns, not total household income.
How many will be affected?
It is estimated that around 1.3 million households will see a change in their child benefits.
When will the changes come into place?
The Government has proposed that 2013 is the year that will see the changes made. The current child benefit system will remain the same until this time.
How can I prepare for this?
You can check out our guide to saving money for your child.
What are the other changes I should look out for?
The Government plans to reveal all on 20 October, outlining the key changes in a speech. The current Chancellor, George Osbourne, has hinted that there could be cuts to the defence industry, pensions, general benefits and other areas in order to reduce the country's £155bn deficit.
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