Labour Scraps Child Benefit Reform, Impacting 700,000 Families

The decision to maintain the current system leaves single-income households facing higher tax burdens compared to dual-income families.

Labour has decided not to proceed with the Conservative plan to reform child benefit calculations based on household income, citing a fiscal cost of £1.4 billion.
The current system calculates benefits based on an individual's income, leading to perceived inequities for single-earner and single-parent households.
Under the existing rules, households with a single earner making over £60,000 lose benefits, while dual-income households earning just under £120,000 retain full benefits.
Critics argue the decision overlooks the financial challenges faced by single-income families, exacerbating existing disparities.
Efforts to simplify the repayment process for those affected by the High Income Child Benefit Charge will continue, but broader reforms have been shelved.