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Child benefit changes - what do you think?

(1000 Posts)
KateMumsnet (MNHQ) Thu 25-Oct-12 13:50:35

Next week, the Inland Revenue will write to 1.2m families about upcoming changes to child benefit eligibility. The changes mean that from next January, single-income families earning more than £50,000 per year will no longer be eligible for the full amount (currently worth £1,055 for the first child) - and those earning over £60K will no longer receive it at all.

The changes are controversial. Dual-income families who both earn just below the 50K cut-off - who have, in other words, a family-income of just under £100K per year - will continue to receive the full amount, leading to criticism that the changes penalise both stay-at-home mothers and single parents. Accountants are warning that new partners of divorced parents could also lose out. And the entire process is so complicated - with families forced to fill out complex self-assessment forms for the first time - that the Inland Revenue has reportedly postponed sending out the letters because they can't find a form of words that families will be able to understand.

What do you think? Will you be affected by the changes, and what will it mean for your family? Are stay-at-home mothers being unfairly targeted - or is staying at home a luxury which shouldn't be subsidised by the taxpayer? Should child benefit be universal - or should it be available only to families who are really struggling? Let us know what you think here on the thread, and don't forget to post your URLs if you blog on this subject - we'll be tweeting them over the next few days.

Asinine Thu 25-Oct-12 17:03:27

Have emailed pm on radio 4 with the '99k £ question'.

BurntToastSmell Thu 25-Oct-12 17:05:01

OwlLady it makes me feel sick to my stomach. My great country is turning into an even bigger patriarchy than it was before. Women are seen as so unimportant. We need to organise ourselves.

partystress Thu 25-Oct-12 17:05:27

Agree with all those who think it is an ill-conceived, unfair, hopefully unworkable system. Am determined to minimise the benefit the ConDem omnishambles crew take from us and so we are transferring my childcare vouchers to DH because, as I understand it, salary sacrifices like cc vouchers, pension AVCs, are taken off salary before the reduction in CB is calculated. Won't save us all of it, but will mean we can hang on to a bit more of it - and it is much needed in our house.

soverylucky Thu 25-Oct-12 17:06:22

It can not be worked in a fair way. If you do it on joint income you would need to take into account that a family with two incomes would probably have childcare costs that other familys do not have. If you base in on one higher rate tax payer you are penalising single parents and you have the discrepancy that one family on 60k lose out whereas next door with 99k will keep it.

I propose to save money that the government ammend child benefit so that it reduces for each child. You currently get more for your first child and then all subsequent children entitle you to a lower amount. It could be something along the lines of £20 for first child, £12 for second child, £8 for third child etc. ( I haven't really thought this through - it is just an idea so feel free to pull it to pieces)

Ultimately though I think that far more money could be raised by, oh I don't know, getting all the people who avoid tax to pay it and not wasting money on war. But I am a dreamer.....

noseymcposey Thu 25-Oct-12 17:08:19

So on a scale of 1-10 what do you reckon the chances are of it not happening?

CelineMcBean Thu 25-Oct-12 17:08:40

It is incredibly unfair at the moment and I have huge issues with having my finances tied to my husband via his tax return. I am not his chattel angry

I would rather give up child benefit instead of having to bother with all the form filling. I can't pretend we need it although our combined income is less than £70k in London. We can manage without.

However, I am concerned that I may lose my state pension and other rights if I am not claiming child benefit. Should I be completing a CF411A Application form for credits for parents and carers if I give it up?

Happybunny12 Thu 25-Oct-12 17:09:48

EdithWeston - 'hard won principle of independent taxation'. Not sure I understand this, I've always thought it unfair that households are not assessed for tax as one unit (like I think they kind of are in the States?)

But am prepared to be persuaded otherwise- why is it important that we are all assessed for tax independently?

noseymcposey Thu 25-Oct-12 17:10:01

burnttoast and that is the number one reason why it should stay as it is in my view

Pyrrah Thu 25-Oct-12 17:10:15

State Pension Credits - I got a friend who is a Labour MP to ask this as a question in Parliament earlier this year and the answer is that yes people will still get the Credits.

Either because they continue to claim CB and it is clawed back as a lump sum at the end of the year from the higher earner via the self-assessment tax form (just what everyone wants to look forward to).

Or because you fill in a form every year to say thanks for offering but I don't want the money but please do give me my credits.

Whole system is a total shambles and will cost more than it will save IMO. The easiest people to 'get' are married couples, where you have blended, single and changing families it's a nightmare.

Even though DH and I are married, we still have separate bank accounts and I actually don't know how much he earns... has never occurred to me to ask.

We are just over the £60k threshold, but live in London (have to for his job), have a very small flat, no car and one child. We are fine on that, but can't afford to have another kid without serious financial issues and the idea of foreign holidays is a distant dream. I'm planning on going back to work now that DD has started at pre-school, but till then the cost of childcare was more than I would earn.

noseymcposey Thu 25-Oct-12 17:12:03

happy because not all couples share their incomes equally. The lower earner has to depend on the higher earner sharing fairly.

JustFabulous Thu 25-Oct-12 17:16:10

We will lose it and tbh it saves us every month so not sure what we will do tbh.

EdithWeston Thu 25-Oct-12 17:16:38

Because women are no longer considered chattels of their husbands, and all adults are treated independently.

And budget cuts can be made, fairly and simply. Freeze or even reduce the level of CB. No new administration costs, nor change to underlying principles of UK taxation, nor new unfair thresholds, nor continual need to update/reassess, nor increased risk of pensioner poverty as consequences of gaps in NI record are so ill-publicised.

Happybunny12 Thu 25-Oct-12 17:17:53

Sorry nosey, still don't get ot. The way I would see a combined tax status working would be, where there is a single earner in the household, they can 'claim' the other person's personal allowance (eg a SAHP) on their tax return. So you'd have to actually claim it at the end of the year and it wouldn't be on PAYE. In terms of 'sharing' the money, aren't SAHPs reliant on their OHs doing this anyway?

JustFabulous Thu 25-Oct-12 17:18:09

I can't remember who said it but it really pissed me off when the female MP said that SAHM were "a problem."

Happybunny12 Thu 25-Oct-12 17:22:43

And Edith, I'm really not trying to pick a fight here, but wouldn't the 'women as chattels' point be moot if we could designate a financial 'head of the household' as the American poster above described?

Asinine Thu 25-Oct-12 17:23:01

Have just emailed today, world tonight and pm on radio 4 about the 99k£ question.

Feel a bit better albeit a bit middle aged blush

Sandrute Thu 25-Oct-12 17:23:22

Families live only on 20000 income. And families cray on 60000 income?

Trazzletoes Thu 25-Oct-12 17:34:40

<applauds Declutterbug>

EdithWeston Thu 25-Oct-12 17:38:52

Here's a paper which includes a section on the history of the struggle for independent taxation.

Now, no party is putting forward a proper set of proposals about cancelling this principle. If someone were doing so, then it coukd be properly critiqued.

Instead there is this kind of chipping away at the principles, either because they simply do not see that independent taxation is a worthwhile thing in itself, or (worse) because they do want to put second earners in any family unit into a disadvantaged position. It might however increase the tax revenue in the short term, as second incomes are then taxed on highest rate applicable to the household but in the longer run it will, once again, tend to lower participation in the workforce.

CelineMcBean Thu 25-Oct-12 17:39:11

What can you say to someone who doesn't see why being treated as chattel of someone else is a problem?

Where to even begin?

shinyblackgrape Thu 25-Oct-12 17:39:48

asinine - think I'll need to tweet question time on the night the show is on as cant see how a question can be submitted in advance unless you're an audience member

MUMSNET - is there any possibility that you can set up an urgent web chat re this? Accept the government may very well say that the decision has been made but a number of serious issues regarding the practical implication have been raised on this thread. From what I can see, no guidance has been provided so that can be done in the course of the web chat.

CelineMcBean Thu 25-Oct-12 17:40:31

Ah, that's where <<applauds Edith>>

BettyandDon Thu 25-Oct-12 17:41:18

I disagree with the cuts as I believe that £50k for a single family income is not a lot in the SE. However, I think CB is not really the main issue for families with pre-schoolers - childcare costs are. The 'squeezed middle' are completely crippled by these...

I'm a SAHM. If I was not a SAHM and used full time child care for 2 under 3, it would cost me £3600 gross pcm, so I would need to earn £43k to break even.

I've just calculated that if I was still employed and paying taxes the govt would get £26k off me PA. Now they get nout. How can this be good for the economy?

I feel that poorer families get a huge amount of help with the cost of raising children from the various elements of tax credits and contribution to childcare costs. I think the same rules should apply to all children - they do for school age children (all have access to state schools), so why shouldn't this start earlier? Maybe that will be the next thing - anyone that earns over £50k needs to fund their own primary school place ?

Asinine Thu 25-Oct-12 17:43:27

shiny good idea, and good luck with that.

To me the policy is so random, it's like picking your tax code out of a hat every year.

morethanpotatoprints Thu 25-Oct-12 17:48:43

I think that it should be means tested on family income not dual or single. Families earning more than 50K shouldn't receive anything, when the disabled, unemployed, incapacitated, pensioners etc are being penalised.

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