Martin Lewis advice on how to avoid DWP £117.22 payment risk

Martin Lewis advice on how to avoid DWP £117.22 payment risk People approaching a key wages threshold could go over limit and be forced to pay money back Personal finance expert Martin Lewis has given important advice to parents claiming Child Benefit and at danger of approaching the threshold - and be forced to pay it back. On his BBC Radio 5 Live podcast, the money man was asked about the benefit - and how a listener was on the verge of being hit by tax after getting a pay rise above £60,000. Child Benefit is a UK government payment made to parents or anyone responsible for raising a child. For the 2026/27 tax year, parents receive £27.05 a week - approximately £117.22 per month- for your eldest or only child, and £17.90 a week for each additional child - about £77.57 per month. Child Benefit is tax-free, but if a parent or their partner have an individual adjusted net income over £60,000, they may have to pay a tax charge. The listener asked: “I recently gained a significant promotion in April taking my annual salary up by £16,000. Prior to me gaining that promotion I’d started the process of getting an EV car through work on a salary sacrifice scheme that subsequently arrived in June. I’m the primary earner and my wife works part time in a minimum wage job. “She claims Child Benefit for our two children but I’m now concerned about hitting the higher earner Child Benefit threshold.” The person said he had 2 parts to the question - does the salary sacrifice EV scheme reduce his income for Child Benefit calculations. He also asked that if his EV payments started later in the year this could mean he ‘tips over’ the threshold and if that’s the case should he increase pension contributions to ensure taxable income is below the £60,000 threshold. Martin explained: “A salary sacrifice scheme is effectively you pay for something through work and they reduce your salary to do it - so you get the car, but you have a lower salary and effectively as you’ve got a lower salary you’re not paying tax and national insurance on your income and you’re just getting the benefit that you would get.” Mr Lewis said on Child Benefit it ‘reduces once the highest earner in a couple earns £60,000.’ He added: “It’s totally gone by the time the highest earner earns £80,000.” He said the money is taken off through the high income child benefit tax charge. He said: “If you do salary sacrifice on a new electric vehicle that does reduce what is called your ‘adjusted net income’.” He said this is the £60,000 - £80,000 threshold. He said the EV scheme would reduce the adjusted net income - but not by the full amount as a calculation has to be made about ‘benefits in kind’. On pensions he said any contributions to pension schemes in this way could be used to bring the person below the threshold. He added: “What I would say is make the right decisions for yourself. Remember it isn’t a cliff edge on child benefit - it starts at £60,000 and reduces over £30,000 of earnings, so if you were to see £60,500 you would see a very small reduction, it wouldn’t be that big an impact “As you’re close to the edge do what’s right for you whilst trying to keep hold of the child benefit, but don’t be too extreme to keep hold of the benefit would be my overall guidance.” Listen to the full podcast here.