Child Benefit Increases from 7 April: What Employers Need to Know

From 7 April 2025, families receiving Child Benefit will see an increase in their payments. HM Revenue and Customs (HMRC) has announced that the weekly rate will rise to £26.05 for the eldest or only child and £17.25 for each additional child. This means an annual payment of £1,354.60 for the first child and £897 for each subsequent child. These payments, usually made every four weeks, are automatically into claimants’ bank accounts.

One way parents can manage their Child Benefit is via the HMRC app, which allows them to make and adjust claims and update their details.

What This Means for Employers

While Child Benefit is a personal entitlement for families, there are several ways this update can be relevant to businesses and employers:

• Supporting Employees’ Financial Wellbeing: This increase in Child Benefit can provide a small but valuable financial boost to employees with children. Encouraging staff to check their eligibility and claim what they are entitled to can help reduce financial stress and improve overall wellbeing.
• Payroll Considerations and High-Income Employees: Employees earning between £60,000 and £80,000 may be subject to the High Income Child Benefit Charge (HICBC). From summer 2025, affected employees will be able to opt to have this charge deducted via their PAYE tax code, reducing the need to file a Self Assessment tax return. Employers may need to provide guidance on this option and ensure payroll systems are updated if and when new tax codes are received from HMRC.
• Maternity and Parental Leave Advice: Employees taking maternity or parental leave should be reminded to claim Child Benefit as soon as possible after their child’s birth. Claims can only be backdated up to three months, so prompt action is crucial.
• National Insurance Credits Awareness: Claiming Child Benefit also provides National Insurance (NI) credits, which contribute to an individual’s State Pension entitlement. Employees who choose to opt out of receiving payments (to avoid HICBC) should still make a claim to secure these NI credits.

Key Actions for Employers

• Inform staff about the Child Benefit increase and encourage eligible employees to claim.
• Educate high-income employees about the upcoming PAYE tax code option for HICBC.
• Ensure payroll teams are aware of the changes, particularly around HICBC deductions.
• Remind new parents of the importance of claiming Child Benefit promptly to secure payments and NI credits.

By keeping employees informed about these changes, businesses can contribute to their financial wellbeing and support parents in managing their family finances.

If you or your employees would like any further information or help, please feel free to contact us. We would be happy to help!

See: https://www.gov.uk/government/news/child-benefit-boost-for-millions-of-families