Means testing of child benefit could start next April, if Tynwald approves Orders made by the Minister of Social Care at this month's sitting of the court.
It will mean families with an annual income above ?90,000 will see child benefit stopped completely, whilst those with an annual income below ?60,000 - which accounts for 70% of the numbers - will still continue to receive benefit at the maximum rate.
The move is expected to save around two and a half million pounds a year, with ?500,000 of that earmarked to provide extra help for families to pay nursery fees.
Families with an annual income between ?60,000 and ?90,000 will have their child benefit reduced by 25% for every ?10,000 band of income above ?60,000.
Currently over ?16.5 million is paid out to over 9,500 families and Social Care Minister Chris Robertshaw says government can't carry on paying out the benefits to those who don't need it.
He believes the system they have come up with is fair and equitable and will require only a minimal amount of resources to operate.
Subject to Tynwald approval, the Department will be writing to all existing child benefit recipients over the next few months to explain the changes being made.
Anyone with concerns should email the Child Benefit Unit at childbenefit.dsc@gov.im or telephone them on 685107.
The Department of Social Care this week is also sharing the recommendations of its Housing Review with Members of Tynwald and Local Authorities prior to their submission for approval at the November sitting of Tynwald.
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