Child Benefit is a regular payment designed to help you with parenting costs. You might use it to help with expenses such as clothes, grocery shopping, or childcare, and it can be a valuable resource for parents.
Yet, if you are a professional rugby player earning high wages, you might be less reliant on Child Benefit to cover crucial expenses for your children. Additionally, if you earn more than £50,000 in the 2023/24 tax year, the amount of Child Benefit you receive may be reduced.
As a result, you might think that you do not need to claim Child Benefit. However, there are potential benefits to claiming, even if you would not receive any money.
In fact, you could receive more State Pension in later life if you receive Child Benefit now.
Read on to learn how Child Benefit works, and why it could be worth claiming it.
You can usually claim Child Benefit if you have at least one child under the age of 16
If you have a child (or children) under the age of 16 who lives with you, you are likely eligible for Child Benefit.
In the 2023/24 tax year, you could claim £24 a week for your eldest or only child, and £15.90 a week for each additional child. You will receive a payment every four weeks.
In 2024/25, the payments will increase to £25.60 a week for your eldest or only child and £16.95 for each additional child.
This extra income could be useful when managing the cost of raising children, especially if your earnings fluctuate. For example, you might have a gap between contracts if you move to a new club, or you might have to take time out for an injury.
Your Child Benefit payments could supplement your income during these periods. However, if you or your partner are a high earner, you may not receive the full amount.
You may trigger the High Income Child Benefit Charge if one of you earns more than £50,000 in 2023/24
If you or your partner has an “adjusted income”, which is your total taxable income less your own pension contributions or Gift Aid donations, of more than £50,000 a year (in 2023/24), you may trigger the “High Income Child Benefit Charge”.
It is the income of the individual that matters here, not your joint income. For instance, if you both earned £40,000 you would not trigger the charge.
Conversely, if one person earned £55,000 and one earned £25,000, you would pay the High Income Child Benefit Charge.
If you are over this threshold, your payments reduce by 1% for every £100 that your adjusted income exceeds £50,000. Effectively, this means that if you earn £60,000, you must repay all your Child Benefit payments.
In his 2024 Spring Budget, chancellor Jeremy Hunt announced upcoming changes to the High Income Child Benefit Charge. From 6 April 2024, the earnings threshold at which you trigger the charge will increase to £60,000.
Additionally, the top of the taper at which Child Benefit payments are withdrawn altogether will increase to £80,000.
There are also plans to move to a household income system in 2026, meaning that the charge will be calculated based on the combined income of you and your partner.
These changes will likely reduce the number of people affected by the High Income Child Benefit Charge.
Yet, if you are a professional rugby player earning high wages, you may still find that you must repay all your Child Benefit Payments, even after the changes come into effect.
In this instance, you could either claim the payments and then repay them through self-assessment or you can choose not to receive them at all.
Many people decide not to claim because they are affected by the High Income Child Benefit Charge and will not receive any money from it.
Even so, you may still want to make a claim because there are other potential benefits.
You may receive more State Pension later in life if you claim Child Benefit now
While it may not be enough to fund your lifestyle on its own, the State Pension could provide a reliable income to supplement your other savings in retirement.
In the 2023/24 tax year, the full new State Pension is £203.85 a week (rising to £221.20 a week in 2024/25) and this amount typically rises with the cost of living over time. You also receive payments for the rest of your life, so it may be an important part of your retirement income.
However, you need 35 “qualifying years” on your National Insurance (NI) record before you are eligible for the full amount. A qualifying year is any in which you:
- Were working and paying National Insurance contributions (NICs)
- Received NI credits
- Paid voluntary NICs.
If you are a professional rugby player, you may miss out on some qualifying years for several reasons. For example, if you play for a team abroad, you may not pay NICs in the UK, depending on the country.
Additionally, you might be unable to play and earn an income due to an injury. You might not earn a regular income for a period after you retire from playing either.
Fortunately, you may be able to maintain your NI record and qualify for the full new State Pension if you receive NI credits.
If you apply for Child Benefit and your child is under 12, you automatically receive NI credits for those years. However, you will not receive the credits if you were not claiming Child Benefit.
So, even if you trigger the High Income Child Benefit Charge and will not receive any value from the payments, it is still important to claim Child Benefit.
Your child also automatically receives an NI number of their own when they turn 16 if you claim Child Benefit.
The government plans to introduce measures for those who failed to claim Child Benefit
You may have failed to claim Child Benefit in certain years if you and your partner were affected by the High Income Child Benefit Charge. In the past, this could mean that you missed out on valuable NI credits.
Fortunately, the government has recognised that this is an issue, and plans to introduce measures that allow people to claim those credits, even if they did not apply for Child Benefit at the time.
Under the new rules, you would be able to claim these credits from April 2026 onwards and backdate claims to 2013. If you are concerned that you may have missed out on NI credits, you may want to explore this option when the time comes.
Get in touch
If you would like more information about Child Benefit claims, then please do get in touch with us at DBL Asset Management.
Email enquiries@dbl-am.com or call 01625 529 499 to speak to us today.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
