Families with annual income of up to £120,000 will be able to keep all of their Child Benefit, the Conservatives have pledged if they win the General Election.
The move will leave 700,000 families on the top level salary an average of £1,500 a year better off, according to analysis by the party.
The current rules base entitlement to Child Benefit on the basis of the earnings of a single individual within the household and sets a threshold of £60,000.
Once any parent earns about that figure, the benefit starts to be removed before it is then wiped out completely when the annual income of that individual reaches £80,000.
However, the Conservatives have now drawn up a new Child Benefit regime that would decide eligibility based on a household’s overall annual income using a figure of £120,000.
Jeremy Hunt, the Chancellor, said: “Today we have announced a £1,500 tax cut for parents to boost families’ financial security and give them more money to spend on the things that matter most.
“Raising the next generation is the most important job any of us can do, so it’s right that, as part of our clear plan to bring taxes down, we are reducing the burden on working families.”
Mr Hunt said there was a “clear choice for voters at this election” between “bold action to cut taxes for working families” under the Tories and potential tax rises under Labour.
The announcement is part of a policy blitz from Conservative campaign headquarters in an attempt to narrow Labour’s opinion poll lead.
Child benefit allows parents to claim £25.60 a week for one child and £16.95 for each subsequent child.
There is a two-child cap on claims, something some MPs, including Suella Braverman, have argued should be scrapped.
The new Tory moves on child benefit build on similar changes that Mr Hunt set in motion in his spring Budget.
Some former senior Treasury figures, including George Osborne, the Tory ex-chancellor, questioned whether the change would ever be implemented because it was so complicated.
Moving from an individual approach to taxation to a household one would see the Treasury have to gather financial data on each household, something that is not currently done.
The policy would cost an estimated £1.3 billion in 2029-30 and the Conservatives say the money would be paid for by a crackdown on tax evasion.
A Labour spokesman said: “This is another chaotic scattergun announcement from Rishi Sunak, adding to his list of desperate and unfunded policies that he knows can’t be delivered.
“Rishi Sunak clearly wants to pretend the last 14 years didn’t happen, because almost all his policies reverse decisions his own party has taken.
“The choice at this election is five more years of Conservative chaos or stability with a changed Labour Party.”
