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No decision yet on child benefit cut-off
NO decision has yet been made on where the threshold for means-tested child benefit will be set, the Chief Minister insisted
In his Agenda for Change statement to Tynwald setting out the government’s priorities for the future, Allan Bell MHK revealed that the Department of Social Care would ‘introduce means-testing for universal benefits, in particular child benefit, from April 1, 2014’.
In the UK, there were accusations of unfairness when a cliff-edge threshold of £42,475 was proposed. Households where one person earned just above the threshold would lose their child benefit but households with two earning just below would retain it.
A U-turn by Chancellor George Osborne saw that proposal replaced with a phased scheme where child benefit will be phased out by 1 per cent for every £100 earned above £50,000, and completely withdrawn for people earning £60,000.
Mr Bell told iomtoday: ‘No decisions have been taken as to where the threshold might be.
‘There is a great deal of work still to be done to develop a scheme appropriate for the Isle of Man, bearing in mind the weaknesses in the changes brought in in the UK.
‘Means-testing is new to the island and we have to ensure the structure works effectively. Childcare is one area that has been highlighted in the past but means-testing might be applied to other areas.’
Treasury Minister Eddie Teare has already hinted that the threshold might be £70,000.
In his Budget speech, he pointed out that a quarter of families with child benefit earned more than £70,000 a year, costing £3 million a year.
Mr Teare told the Examiner that the threshold level was ‘still being worked on’.
He added: ‘It would be wrong to pick on child benefit in isolation. We are looking at all benefits.’
But he said he would want to see the details of the changes announced as soon as possible. ‘We need to deal with the uncertainty that’s now been created,’ he said,
There have already been some cuts to child benefit, with payments for the second and subsequent children reduced from £20.40 a week to the UK level of £13.50 in a change announced in the Budget. It’s a move that saves £2 million a year.
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Weather for Isle of Man
Tuesday 21 May 2013
Today
Sunny spells
Temperature: 9 C to 13 C
Wind Speed: 36 mph
Wind direction: North west
Tomorrow
Sunny spells
Temperature: 6 C to 12 C
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