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Anyone heard about new changes to c'tax benefit and having to pay 20% when on benefits?

(72 Posts)
zumbaholic Thu 24-Jan-13 13:35:23

Thats it really, has anyone else heard of these changes? I found out about them today, apparently people of working age(under60) will have to start paying 20% towards their council tax becuase of money deficits within councils.
The thing worrying me is the child maintainance aspect, they will now count this as a income and people will be means tested. I think thats shocking since no other organisation counts child maintainance as income as its for the upkeep of the children.

On ringing the information line, they couldnt give me any more information or tell me when this may be put in place but im assuming it could be this aprilconfused

CogitoErgoSometimes Thu 24-Jan-13 14:02:13

I found this story about a plan like that from Birmingham council. Whether it is applicable more widely I don't know.

HappyMummyOfOne Thu 24-Jan-13 18:30:26

If your ex lived with you his income would count so seems very fair they include child maintainance as then its fair on couples and single people.

20% is not much to ask for all the services provided and still 80% less then most people pay.

Booyhoo Thu 24-Jan-13 18:35:22

the reason CM isn't counted is because historically when it was counted it ended up costong the state far more in reassessing claims week in week out due to NRPs not paying or changing the amounts. it worked out less expensive to just not count it in calculations.

mercibucket Thu 24-Jan-13 18:35:59

I don't know why child maintenance isn't always taken into account. Surely if the 2 parents lived together it would be.
I am also in favour of everyone paying a contribution towards council tax as then everyone who votes in local elections has more of a financial interest in what the council does, but it is cruel to do it whilst simultaneously cutting benefits.
I think each council will be making its own rules about this btw so you could lobby your councillors

tbh, I think child maintenance should be taxable/accountable for the recipient and deductable for the payee. It seems mad that someone could be getting a lot on top but still qualify for benefits/top ups.

By any logic of course CM SHOULD be included in income - maintaining our children is what parents spend a proportion of income on grin It just hasn't been cost effective to count it before. Obviously now it is - or it's politically expedient to do so. Another crap coalition policy which will disproportionally disadvantage women. 20% of some council tax can be a pretty large sum of money......

Booyhoo Thu 24-Jan-13 18:45:36

taxable child maintenance? it has already been taxed in the NRP's income. it isn't payment for a service! it's the NRP's contribution to their child's upbringing.

expatinscotland Thu 24-Jan-13 18:48:02

I think there needs to be a way for maintenance to be counted.

expatinscotland Thu 24-Jan-13 18:48:39

It's not being taxed, it's being factored into your benefit entitlement.

Booyhoo Thu 24-Jan-13 18:51:06

i was responding to notactually who suggested it should be taxable from the CS recipient.

MN044 Thu 24-Jan-13 18:51:34

it's a very recent change that maintenence isn't counted anymore. Certainly within the last 4 years. The reasons i think are good ones- non resident parents can dick around with maintenence from month to month leaving you not only without the maintanance,but without the benefits as well. I know many many people (let's face it, women) who this was a real problem for. But yes it does mean that you can be eligable for benefits and yet be getting hundreds of pounds a month on top.

Booyhoo Thu 24-Jan-13 18:53:31

and before they can count CS in benefit entitlement they need to come up with a way of making sure it's paid in the first place. but of course that would require effort and spending on the govt. part and it's just too easy to take it from the person they can keep tabs on.

JuliaScurr Thu 24-Jan-13 18:56:24

http://www.guardian.co.uk/money/2013/jan/14/poorer-households-postcode-lottery-council-tax

Happy 'All the services' are also being cut - disabled day-centres, Sure Start centres, social servivices, libraries- you name it. Along with the cuts go the jobs. All those made unemployed (mainly women) will be able to use the free time looking after all the people who now have no council services. Welcome to the Big Society.

George Osborne's last budget gave all those on £1million p/a a £45,000 tax cut.

Booyhoo - my post also suggested it should be tax deductible for the payee, so it wouldn't be taxed twice. Might be an incentive to pay it? Also, it would only be taxed it it was part of your taxable income.

CarriedAwayAnnie Thu 24-Jan-13 19:05:10

Child maintence isn't counted as it isn't reliable income.

If the NRP decides not to pay then the RP and the child suffer.

Labour tried to do it but it simply doesn't work, and won't work until they can find a way to ensure the NRP always pays.

For example if NRP doesn't pay and the RP has had her housing benefit cut to include Child Maintence payments then how does the RP afford her rent?

Booyhoo Thu 24-Jan-13 19:05:58

if it was made tax deductible for NRPs then 15% of pwc income would also have to be tax deductable.

and no it shouldn't be taxed for pwc, it isn't money earnt or payment for any service. if you want to play by the same rules as if it were a couple together then it wouldn't be tax deductible for either and one partner wouldn't be expected to pay tax on their own and 15% of their partner's income with the partner having to pay no tax on that amount.

Booyhoo Thu 24-Jan-13 19:08:24

you would essentially have PWC paying their own and their EX's income tax on that 15% how is that right?

CarriedAwayAnnie Thu 24-Jan-13 19:09:51

And tbh if they did count CS payments, most people would just go off the books.

My friend agreed with her ex to recieve less money from him in order for him not to tell the CSA he was paying her anything.

Suited them both. He paid less, she got the full amount of benefits as she wasn't officially receiving anything.

Booyhoo Thu 24-Jan-13 19:11:08

carried it would also affect their tax credit and income support/job seekers allowance claims if it were to be adjusted every time the amount changed/disappeared. you would end up with people not receiving anything other than CB for weeks at a time while they system tried to add up what they were entitled to. it would be absoloute chaos. and people would be applying for crisis loans left right and centre in order to survive.

Booyhoo Thu 24-Jan-13 19:12:18

how long ago was this carrie?

gallicgirl Thu 24-Jan-13 19:18:13

These changes have been in the pipeline for over a year. Council's consulted several months ago and most had their plans agreed before Christmas.

Central government has cut funding by 10% and told councils to protect pensioners. If you live in an area with a lot of pensioners on benefit, you might want to think about moving!

MN044 Thu 24-Jan-13 19:21:01

But why are pensioners protected, and not other more vulnerable people too? I'm sure it's no picnic to be living on a pension, but nor is life on benefits. Is it because pensioners are more likely to be tories? If they start counting maintenance towards council tax it'll raise the question of why funds are available to process that data, but not to assess which pensioners actually need their winter fuel payment hmm

CarriedAwayAnnie Thu 24-Jan-13 19:29:23

The dc was in infants Booyhoo and is now 17 so a fair few years ago.

CarriedAwayAnnie Thu 24-Jan-13 19:30:45

Lone parents on income support will be playing £11 a month in this area.

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