So child benefit to go for higher rate taxpayers

(1017 Posts)
foxinsocks Mon 04-Oct-10 07:22:32

So says George osbourne on breakfast telly. Missed the details but sounds like it comes in from 2013!

foxinsocks Mon 04-Oct-10 07:25:41

In fact Sian on the BBC looked so surprised that they had a breaking news story, they almost didn't know what to say!

Lougle Mon 04-Oct-10 07:26:39

I thought the whole idea was that women who relied on their husbands' goodwill in sharing his high wages were guaranteed some income to pay for their children's essentials?

bytheMoonlight Mon 04-Oct-10 07:27:22

He says it will affect anyone earning over £44,000.

I'm confused how they will work it out?

Will it be on joint income?

If one parent doesn't pay the higher rate of tax will they be able to claim if the other parent does pay the higher rate?

Wilts Mon 04-Oct-10 07:27:39

He is on Daybreak now discussing it.

pooka Mon 04-Oct-10 07:29:05

INterested in how it will be worked out. I earn nothing. DH earns more than £44000.

foxinsocks Mon 04-Oct-10 07:31:31

He is on sky next so let's hope someone asks some more sensible questions!

LIZS Mon 04-Oct-10 07:36:10

Agree so far unclear. On household income we might lose, on my own - it is paid to me -not confused Also income itself is not the be all and end all - if you have other financial commitments the net effect may be less income than in an ostensibly lower income household, especially bearing in mind it would n'l qualify for any other benefits (ie Tax Credits).

nymphadora Mon 04-Oct-10 07:37:58

Wonder how it works for mixed families. Dh did earn over 40k but is now unemployed ( not claiming) but I was getting CB for my daughters ( not his) whereas if they lived with their Dad with 2 adults on 20k they could claim it?

Not sure I've explained it well there though hmm

peppapighastakenovermylife Mon 04-Oct-10 07:38:24

Oh great news hmm

If it is on joint income I officially give up. We will be hundreds of pounds worse off by both of us working.

It will likely be gone for people earning much less than that in the future.

Chil1234 Mon 04-Oct-10 07:40:20

Single parents in the 40% tax-band for earnings will be furious if wealthy couples could still claim by transferring the benefit to the non-working or low-pay-receiving partner... Can't imagine someone hasn't spotted that one. Winter Fuel Allowance has to be next up.

bytheMoonlight Mon 04-Oct-10 07:46:17

Its not going to work is it?

I mean jointly a couple could earn £44,000 and not be paying higher rate tax individually, yet one person could be earning the sole family income of £44,000 and be paying higher rate tax.

The first family doesn't lose CB yet the second family does dispute the household income being the same.

confused

Why has no one asked him how he is going to work it out?

Haven't lived in the UK for years so have no idea how much child benefit actually is. Have one 9 year old and are moving back next year. and someone said to me the other day and I could start claiming child benefit. I assume not now!

I do agree that some people don't need it. But I do feel that the threshold should be much higher.

HowAnnoying Mon 04-Oct-10 07:49:30

THe 40% tax band is on earnings over £37,400. He is saying he is expecting that to rise to £44,000 by 2013 when Child Benefit will stop for people in that band.

I assume it will done on household, so if one partner is in the 40% tax band the household wont get CB, I can't imagine it would be much of a saving otherwise, as CB gets paid to the mother, and it's more than likely the mother either stays at home or works part time.

HowAnnoying Mon 04-Oct-10 07:52:32

I guess they've gone for using the tax rate as a cheaper way to adminster?

It's crap though, if you're earning £37,400 with 2 or 3 kids and you're either a single parent or your OH is SAHP then you're hardly well off, especially if you live in the more expensive parts of the country.

peppapighastakenovermylife Mon 04-Oct-10 07:53:00

On the bbc website it says family income.

However again the same problem arises - if family income is based one one wage with one SAHP and therefore no childcare costs then that has less impact than on a two wage household with childcare costs.

So if one of us gave up work then we would be around £500 a month better off.

If I split up from DH and lived alone I would be around even more better off a month.

And the tories think they are reducing their hates of the unemployed and single parents? hmm

MumInBeds Mon 04-Oct-10 07:54:53

"George Osborne said the decision was necessary to help the Government reduce spending.
He told Sky News the change will affect households where at least one worker pays 40% or 50% tax."

Sky News

HowAnnoying Mon 04-Oct-10 07:55:28

ANd are tax credits are stopping for families on over £40k?? Double wammy!

It's certainly going to encourage a bit more tax evasion/avoidance!

MollieO Mon 04-Oct-10 07:56:39

Chil that is what I thought. I'm a HRT but single parent so have high childcare costs. I need to find a partner who can be a SAHD!

HowAnnoying Mon 04-Oct-10 07:57:43

50% tax band I could understand, but not 40% there will be plenty of people in that band that use every penny they get.

pooka Mon 04-Oct-10 07:58:03

I also think that the threshold should be much higher. IN terms of "comfort" when taking into account childcare costs, mortgages and so on, there is a huge difference IMO between £40000 and, say, £70000 in household income.

Personally we don't rely on CB, and so I am not concerned about us losing it. But DB and SIL for example are much more likely to feel the effects of it going as they are on lower incomes (though jointly would probably creep over the threshold).

MumInBeds Mon 04-Oct-10 07:58:39

The devil is still in the detail. DH is waiting to hear if he is getting a promotion, if he does it will put him on the cusp of higher rate but what if he increases his AVCs so he doesn't end up paying 40%. I also work but at low pay for few hours so my pay is just under the level of CB.

Also seems daft that on the one hand they are saying that the Universal Benefit is so no-one loses by working but CB doesn't look to be tapered.

nymphadora Mon 04-Oct-10 08:00:38

Peppapig- but they are reducing unemployment rates by lots of people giving up work & not claiming jobseekers wink

If they make CB part of the universal credit + TC then taper it off up to 40k that makes more sense from an admin POV but just administrating CB on it's own will be expensive.

I also think we need to move away from 40k being a high earner. Many families are at this level yet still can't afford their own homes. In fact dh living on his own came north as he couldn't afford a house in Cambridge on a higher rate salary

"I mean jointly a couple could earn £44,000 and not be paying higher rate tax individually, yet one person could be earning the sole family income of £44,000 and be paying higher rate tax.

The first family doesn't lose CB yet the second family does dispute the household income being the same."

The household income is NOT THE SAME.
Single income household £44,000 take home £32,270.40

Dual income household on £22,000 each take home £34208

However the dual income household may have significantly higher childcare costs.

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