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To not understand why CB changes are not based on household income

(15 Posts)
Tailtwister Mon 29-Oct-12 14:44:24

This isn't a thread about whether the changes are fair, or if people who earn £60,000 should get CB (think that's been done to death!)

I just don't understand why the changes can't be based on household income, rather than just the highest earner. Surely if they can target higher tax payers and are asking people to submit self assessments, they can base it on the joint income? It just seems strange to me why they aren't. Can someone explain it to me?

ShirleyRots Mon 29-Oct-12 14:45:44

I think it's easier to administer on a one wage basis. If they had to go into household incomes then it would require getting more information which would cost more.

I imagine that would be the reason they would give

PosieParker Mon 29-Oct-12 14:46:52

To make it simple.

Weirdly the change is coming in to make things fair and the change in itself isn';t fair. Tories.

LIZS Mon 29-Oct-12 14:49:55

Taxation is based on indvidual income not household

MrsMymble Mon 29-Oct-12 14:50:06

It's because they don't want women to stay at home with their children IMO

Tailtwister Mon 29-Oct-12 14:50:06

Surely they would save more if they did it on household income though? There must a fair number of households who bring in £60,000, plus all the joint incomes over that...

It just seems bizarre that they would make a change with such an obvious hole in it. Have they ever addressed the issue?

Mrscoghoul Mon 29-Oct-12 14:51:09

Yes it's due to admin costs - I read that the computer system that CB is administered on isn't set up to look at household income and to change it would cost way more than the projected savings. I think politicians would have liked to have made the change fairer by basing it on household income but it was a 'hands tied' situation... (have picked this up from media and letters to my MP)

Tailtwister Mon 29-Oct-12 14:53:23

I'm guessing too that there are ways and means around it, which people will take. Have heard friends say they will pay more into pensions to avoid losing CB and I'm guessing if you're self employed it would be possible too.

scarevola Mon 29-Oct-12 14:54:50

It doesn't make it simple. Merging - for first time ever - the tax records of the person who isn't necessarily the claimant with the benefits system, is a giant mess and all sorts of bodies (eg accountants professional body) have warned about how very, very bad this is administratively. Plus a conservative estimate puts about an additional 500,000 people onto tax returns because of changes arising from clawback.

Much better to avoid all the (utterly unnecessary) additional administration and just freeze or cut CB for all.

Or abolish in current form, and reapply as a household benefit (as other benefits are administered).

Plus introduce a parallel system for the NI credit - for one must never forget the protection that offers for those who step out of work in the early child-rearing years. Poverty in pensioners with an incomplete NI record is a disgrace, and should not be inadvertently be compounded by this poorly-thought-out and worse-executed measure.

BupcakesAndHaunting Mon 29-Oct-12 15:02:21

Honestly, I think it's being done in this way so that TwatFace Dave is not answerable to his rich mates but he still gets to shaft everyone else, the shiny-faced, bouffy-haired, ne'er-do-well.

If the government wanted to means test a household rather than an individual, they would do it.

PiggyPlumPie Mon 29-Oct-12 15:05:36

They do it with Tax Credits already so they should be able to do it with CB. We will lose most or all of it which I don't disagree with in principle. I am a SAHM though and a couple jointly earning way more than my DH will still keep theirs.

How is this fair??

LIZS Mon 29-Oct-12 15:07:25

But those losing it will already be out of the TC bracket. Given the chaos they manage to achieve do we really want to add to it ?

poppyknot Mon 29-Oct-12 15:21:41

And another strangeness to underline the inefficiency of it.

The child benefit 'ends' for the higher rate taxpayers on the 7th January next year. The tax year thety will be self assessed on runs from 5th April.

Will this require self assessing year 2012-13 and only clawing back 7th Jan - 4th April 2013? How's that calculation going to be made cheaply?

And does the year not begin till the 7th? Why not start the withdrawal with the tax year? Ot's aleready a mess after all.

Just adds to the oddness and appearance of chaotic thinking.......

Tailtwister Mon 29-Oct-12 15:24:26

It's obviously more complicated than I appreciated. I just wonder if it will be a workable system or not. Surely they must be confident it will work though?

Well yes, PiggyPlumPie it's certainly not fair at all. We would lose it either way (as it is or joint), but it does rankle a bit.

Tailtwister Mon 29-Oct-12 15:26:07

I can't stand the guy either Bupcakes, but that's a whole other thread!

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