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Child benefit changes - what do you think?(1000 Posts)
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.
I'm a single parent who has always worked full time, before and after XP left us. I receive no maintenance. I do get some tax credits (thank you tax payers , oh wait! I am one! Thanks me...) I have three DCs aged 17, 14 & 13. My salary is currently well below the new chb threshold, but my career plan is to be promoted around about the time I would lose chb for eldest child. I still wouldn't lose my chb with that salary increase, but any subsequent increases would be wiped out by losing chb.
Where is my incentive to do well and progress in my career? The government wants single parents to work, but seems content to create policy that makes it more beneficial to stay in the lower end of the wage-earning spectrum. How can it be fair that dual-income families can earn £99k, but I would lose chb at £50k. Any income I receive from the state is deducted by increases in salary. I want to be a shining example to my DCs by working in a job that has the potential to change people's lives, but all I see is continual attacks.
I absolutely get the SAHP argument, however, there are two of you to hopefully share the responsibility and joy of raising children. I do all of this on my own.
The money saved will not be targeted at lower income families. child poverty will not be eradicated by removing child benefit from 'better-off' families. There will be no re-distribution towards minimum wage families having a worse time than I. Educational maintenance allowance has been abolished, sure start centres and libraries close, the cost of childcare and utilities spirals, all I see is attacks on what politicians love to call 'hard-working-families.'
...and I am vehemently opposed to bringing back a married couple or civil partners allowance. Dual income families with no children have far less need of state support than any (low-income) family with children, irregardless of that families make-up or marital status.
I've still to do my online self-assessment for 2011-12. Hope I don't have to do a further one straight after. I STILL don't see how they are going to enforce this. Incomes are individual. CB is paid to me. How the bugger do they do what my HOUSEHOLD income is?
Its hard isn't it? I think single parent families are slightly different, but where families choose to have one parent staying at home, isn't that a luxury that most people can't afford? My H and I don't earn £60k+ individually, but combined we do, so if it was based on household income, we'd lose our entitlement completely. Thats new £190 a month to us (we have 3 DC).
I work 3 days a week and pay around £1100 a month childcare in nursery for 1 child and after school for the other 2. I'm left with about £500 a month once I've paid for my commuting expenses. We don't qualify for any tax credits or any other form of benefit.
Our net income therefore is based on my H's salary (much less than £50k) and about £500 from me. So whilst we do have a combined income of more than £60k, its much less than a husband earning £60k who has a wife who chooses to stay at home and look after the children.
Do you know what, I am just so utterly fucking sick of it all. I'm fed up with the disabled, single parents, stay at home parents and carers being shat on by this government and I'm particularly enraged at the indirect sex discrimination that is being allows to happen because those groups are comprised of significantly more women then men.
I have had it up to here with cuts to services used by women and children. The blatant unfairness and inequality is indefensible.
In fact you can send this to Gideon: <<big, steaming turd>>
It's hard for me to understand why isn't the household income that take into account. Has anyone from the government actually explained this? What happened to the petition we all signed? May be it is just the government's way to get all parents back to work?
Penalising single parents arses me off big time. This government has no respect for single parents, treating us if we are some freakish abnormality. According to Gingerbread TWENTY FIVE PER CENT of families with dependent children are headed by single parents.
Also: the hypocrisy of going on about family values and then penalising mothers (or fathers) who stay home to raise their children. Infuriating.
I have never hated a government more than this one. And I was a teenager through Margaret Thatcher...
I am a sahm and have mostly been for 20 years. It doesn't mean we live a life of luxury. When my dc were little the childcare costs would have meant it would have cost me to work, how is that good household management.
Now we would be slightly better off, but only just over breaking even. We are a low income family and just about manage.
As has already Hermes mentioned, child benefit is most commonly paid to the mother. It was set up this way to empower women and ensure they had access to even just a small pot of money to call their own.
I can not believe this is going to be taken away from us. It is clear reading the relationships board that financial independence is vital for so many women. It empowers and enables us. This is worth fighting for, before we even get into the disparity in family household incomes or the ridiculous cost of implementing this half brained scheme.
I understand the anger at the dual income/single earner anomaly and the cut offs etc. In a sense, I feel this is beside the point.
CHILD BENEFIT SHOULD REMAIN A UNIVERSAL BENEFIT.
Once it becomes means tested it is a selective beneift. It is simply then a matter of time before anybody poor enough to claim it (in point of fact on behalf of their child) risks being labeld a scrounger, either dierctly or by implication. You can argue until the cows come home about whether or not the criteria upon which the means test is based. Once it falls into being means tested, those criteria can change fast enough to render much of this debate essentially irrelvant.
CHILD BENEFIT SHOULD REMAIN A UNIVERSAL BENEFIT.
Disclaimer: Our household income would have to increase massively to risk losing child benefit next year.
PS, expansive I totall agree: the hypocrisy of going on about family values and then penalising mothers (or fathers) who stay home to raise their children. Infuriating Child benefit, as a universal benefit, was the only recogntion of this. It is now to be removed.
Potato I'm in an almost identical boat to Mandy and I don't think for one minute she's suggesting a house with a SAHP is living a life of luxury. I would say it just all depends, doesn't it, and that's what's so unfair! I know a couple where neither work and so would qualify easily for CB. However, that doesn't take into account the fact they were both recently made redundant from v highly paid jobs in the city on v high salaries - they have no mortgage, live off rental income from their old London flat (but the income will be less than 50k a year) and have literally hundreds of thousands in the bank.
Life just isn't fair, but the massive advantage of a universal benefit is that there are little admin costs. This must be saving the government peanuts after excess admin costs. And of course the v rich will continue to get the CB by virtue of the fact their clever accountant will get taxable earnings down to very little.
I get a bit annoyed when people describe being a SAHM as a 'luxury'. I have four DCs very close in age and for our family me stayng at home to look after them has been the most practical option. I've tried to make the best of it and enjoy it, but often it's quite hard and very lonely, and sometimes I'd love the 'luxury' of a couple of days at work to live my own life and have a social network and some independence... We have no family around to support us and DH works crazy hours, so financially and practically me being a full time mum was our best option.
If DH and I were both teachers earning around £30k we'd get to keep our child benefit and have the holidays off so no child care required... Yet if DH is a doctor working mad hours for his £60k and I stay at home to accomodate that we lose our benefit! How can that be fair?
I am sorry if I came across narky, it wasn't intended. I was meaning to point out that for some they are better off not working. Its strange how some can afford to work and some cant / and the same for staying at home. I agree the rich get richer at the expense of the poorer.
Do you think the super rich will fezz up and donate their cb or not claim?
Basing any benefit on income is outdated. Many people sit on a fortune and have little income. Assessment should be made based on disposable income and take assets into account.
Would someone be able to answer me the following?
As a SAHM will I be legally obliged to declare my husband's income?
Will it be legal for me to continue to claim child benefit and then wait for the government to claim it back from DH?
Many thanks anyone who can help.
CelineMcBean if that comment was aimed at me you have SPECTACULARLY missed my point. At what point did I say anything implying it was ok for women to be chattels? Nowhere.
My point is that the argument has been made by many folk on this thread, that a household assessment would be fairer to avoid the 'couple earning £99k keep it, single earner on a lot less loses it' situation. If this were to be implemented (ie assessment of the couple/household) then this, ergo, calls into question the principle of independent assessment for taxation purposes.
The new CB criteria, as Edith has aptly pointed out, chips away at this principle already. So the principle is fairly fundamental to the debate.
Unless CB remains a universal benefit, for which some very good points have been made above.
I feel like my government undervalues me and my husbands contribution to out society. DH works very hard and it feels like we are punished for this.
sam - unfortunately, we can't fight for it. The decision has been made in this year's April budget and the provisions for removal were included in the Finance Act 2012. This received royal assent in July of this year and the legislation is now passed.
I don't want to be a smarty pants, I told you so type, but I was/am amazed at the relative lack of push back at the time.
In January of this year, the government said it woukd reconsider matters and then announced there woukd be a sliding scale removal. That seemed to be either relatively accepted or people didn't quite take on board the fact that many of the inherent issues were exactly the same - particularly the 99k one
SBG - Does this mean that there is absolutlely no way the decision can be reversed?
We are in the great position of SOMETIMES being between 50 and 60K - hubby is on performance related pay increases - so last year he would have been paying a quarter back in tax, this year none, next year a half etc..... mmmmm what incentive is there to perform highly if it gets taken away....
Freddy, not knocking large families, am expecting a 4th myself, but 4 children is a luxury.
Luckily, my husband is a
world-leading research scientist of 20 years' standing a civil servant and thanks to his 8-year pay freeze (not that you'd believe it if you read the Daily Torygraph) we are still eligible for it as my self-employed earnings are not high (hollow laugh emoticon). Over the last 8 years, as everything has doubled in price while our income has stood still, we have come to rely on the child benefit more and more. Thank goodness we are not losing it tbh- it pays for the children's extracurriculars (music lessons) and their shoes.
Tinletoes - thanks for your post - no I wasn't suggesting that a family with a SAHP live a life of luxury! I do stick to my guns though and say its a choice - and not everyone has the luxury of that choice.
morethanpotatoprints & freddo - I agree that a SAHM can be difficult, the point I was trying to make is that 1 spouse earning £60k with a SAHM means a higher net income than 2 parents, each earning £30k (so the same household income as you) but paying out £1100 a month in child care.
I therefore pay out about £13k in childcare per year, OK some of that is tax deductible but say I have to earn about £15k to pay for that. So my income isn't in fact £30k anymore, its £15k. If you then consider that we (as a household) pay 2 lots of commuting costs, plus we both pay tax and NI (more than if just one of us was paying tax and NI on £60k) and you can see why as a household, we're much worse off than you.
I agree that once you get into the semantics of it all, there is no fair system, but I just wanted to demonstrate that having a cut off based on household income where 2 parents work and pay childcare isn't fair either.
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