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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.
It is CRAZY!
How can they possibly justify the discrepancy in the new system?
I think it's fundamentally unfair because families with children need more money to live off than people without children - regardless of their income.
If you think that people on £60,000 or whatever don't need the money, then the fair thing to do would to to increase higher rate tax rather than pick only on those with children.
Why should someone supporting a family of 5 or 6 pay the same tax, as someone who is supporting only themselves, and get no allowance for the costs of supporting all those other people?
There's also a bigger argument that once child benefit becomes seen as not for the richest, there will soon be a drive to ensure that it is "effectively targetted at those that need it most" or something similar, so it will roll into Universal Credit, and disapear altogether. People won't value the welfare state if they see it as only for the poor and feckless - and when universal benefits are ended, that is the way it goes.
The way it has been set up is also wrong - Neither I nor my kids' father earn £50,000 (even if you added our incomes together) but my new partner does so he will have to pay it back if I claim. I'm not sure how the government expects this to work as there's no legal duty on me to tell him whether I receive it and we keep our finances separate.
Please can somebody explain what will happen to the state pension credits that I understand I am getting through claiming child benefit? I claim child benefit so what happens when I stop? Do I just come out of the system entirely?
I agree Boggler - my huisband earns £50K and everything comes out of his wage so we will lose it yet someone earning twice his amount will keep it. I work as a school dinner lady in the kitchens (casual contract) for 2 hours a day sometimes for a only an hour depending which school I am at for £6.65 per hour. I am giving up my childminding because there are too many private nurseries taking business as they get government funding. Next year my youngest goes to high school so I am dreading it when we have to buy uniform, football boots,trainers etc as well as the school holidays they offer at inflated prices.
I have no family near to help with childcare and I have worked it out that if I got another second job I would be out of pocket because of childcare for him (ds is 11 in March next year but too young to stay home alone).
This government seem to penalise people like us with one main wage earner and me trying to earn money yet looking after my own child because I cannot afford a childminder. This is the only benefit we have now, I think if you pay into the system (and working people certainly do via National Insurance) you should be entitled to some help back.
Working hard to provide for your family is becoming a mug's game!!!!
It does seem a bit unfair that households earning over £95,000 or so will still be able to claim it but households with one person earning a lot less won't. But no more unfair than the student loan system leaving future students with huge debt when students in the past had no debts or much smaller debts. I wouldn't be in the least bit surprised if there was a re-think on the new child benefit rules.
I like the way Call me Dave was an advocate of traditional families prior to the election campaign too
I would love love love to hear a government minister being pushed hard (preferably by Paxman) to explain why a dual earning family on 99k can keep child benefit. That's outrageous given the situation of the vast majority of people already struggling financially who are being stamped on by welfare 'reform'.
Is it worth emailing news night to see if this could be picked up on? May also try submitting a question to Question Time. If enough did, it might be asked.
I absolutely think that high earners should not recieved it but it should be based on the household income.
Or can we get a minister on mumsnet for a chat
I think it's ridiculous. Utterly unfair that if our income was split evenly between us, we'd qualify for child benefit, whereas because my husband is a higher earner, we miss out. It's the same amount of money at the end of the day, just differently split. Why should a family with both earners on £40k get it, and a family where someone earns £25k, and the other £55k miss out?
I don't think it is penalising SAHMs as such. If one person earns over 60K then they will lose the benefit anyway, whether or not one person stays at home. The realtively small amount of child benefit is unlikely to be difference between staying at home and working full time (but it helps).
Yes WHAT? about the pension credits system?
This is the trouble with the election of a government who are all from extremely wealthy backgrounds and who have no actual idea of how working or even middle class people live.
They have spent their lives surrounded by privilige.
I really hope that one day they realise all the problems they have caused people.
I cannot see them lasting much longer to be honest. It just seems to be one shambles and poorly thought out policy after another
I don't really get it.
Do the earners in the household have to be the parent of the child or can they be another relative ie how will this affect multigenerational households and step households. Will the baby of a single mother not be entitled to CB if the mother lives with high earning parents. My
minted brother used to live with me, but does he count?
Is it based on the actual parents, adults in the household, or adults in the household whom it can be presumed the child's mother is having sex with.
I think it is very, very wrong that the NI credit component of CB is overlooked in just about every pronouncement on this.
It's a flawed system, for it penalises single earning families, as family A on £90k might keep all of it, whereas family B on £60k could lose all of it.
And undermines the hard won principle of independent taxation, to the extent that if an official looked up the information required to append person A's income record to person B's income record, they would be committing a criminal offence.
It is omnishambes par excellence. A disastrously conceived measure, beyond anyone's manifesto commitments, administratively impossible, and unlikely to save much money, as claw back will be expensive and require continuous attention.
For if they were honest to the general public, there would be a very clear message that, in the interests of your long term financial position, you need to keep claiming CB for the NI credit. Do not let the earnings now of someone, who may not be around by the time you reach state pension age reduce your pension entitlement.
Whilst I also understand the vulnerability of older people and that many are on fixed incomes with no potential for their income to increase. It seems so ridiculously unfair that people over 60 are completely removed from any cuts. What really gets my goat is the universal Winter Fuel payment and well as free bus passes.
Some of the recently just turned 60 are amongst the most priviliged of any generation there has ever been. Full employment, untouched pensions, cheap property.
Whilst Pension Credits already means tests many of the kess well off older people, why can these things not be pegged to that?
Oh, I know - pensioners are the most likely to vote in an election.
We need to make out presence known at the polls! Then they will have to listen more.
It's ridiculous that they are taking child benefit away. It must cost a fortune to administer it in this way thus wasting a stack of money that could be put to better use if they continued to pay it out in child benefit.
Despite the fact that we will lose it due to DP income, CB is currently essential to our budget. >50k may seem a lot but where I live the cost of housing, commuting etc is so high that it doesn't go that far when you are paying for childcare as well (I work too but earn less). We are by no means extravagant but I am going to struggle to buy all the household things I need without it. In fact it is already a struggle.
Good idea, let's try and get that question asked, I want to see someone squirm.
Agree with the comments saying CB should be assesed on combined income. But would go further with the following points (just ideas):
- bring back married couples allowance or allow married couples (and civil partners) to 'share' tax free allowance to recognise the benefit to this country of SAHP. Assess households/families as one unit for tax purposes.
- consider scrapping CB completely and making it part of the child tax credits to save admin costs as noted above by HauntedLittleLunatic
- assess on combined income at a reduced limit of £75k (probably get flamed for this one)
- increase childcare voucher limits (ie increase tax benefit), make all employers offer childcare voucher salary sacrifice options and/or make childcare costs tax deductible (subject to a limit)
I think it is really wrong and engenders feelings of unfairness to have a system which removes money from people based not on how much money the family earns but how the money is earned.
I am also sick to death of hearing that "the changes penalise both stay-at-home mothers and single parents" -I work part time, I was paying childcare until recently and all of my income went on childcare and travel. (My husband earns too much for us to get child benefit.) Do we somehow not lose out by this? I have 4 dcs and will lose £232 per month.
I also feel that there will be a few people stuck on PAYE who will lose it, and a lot of self employed/ people near the threshold suddenly paying their spouse/ mum/ dad/ dog or making pension contributions to keep it.
Has anyone mentioned that for SAHMs, this change puts them completely reliant on their husband's good will? CB was the only benefit that women got as default.
This change is very dangerous indeed. Very backward.
Every other Western country gives a break to families with children. Here in the US, DH and I file a joint return and we get an allowance for each dependent. Dependents can include your parents too. The allowance is around $3K so not a lot but every bit helps. If both parents are working there is a small deduction for daycare of $5K but if you are low income there are quite a few credits that kick in. To help single mothers there is the head of household filing status so you get a higher standard deduction compared to a single person.
I think it is time that the UK changed the way they tax people. Children should result in a family paying less tax. I also think they should make childcare provided by a childminder or nursery fully deductible to remove the double taxation. A person supporting an adult plus child(ren) should not be paying the same as someone who is single.
Edith I was considering giving up CB but your post suggests it might be better to keep it for NI credits whatever they might be and pay HMRC back through a tax return ?
I can understand the need to make cuts but I remember emailing ( not like me at all to complain ) my MP when these proposals were first announced essentially because of what I felt and still feel was the unfair practice of a two earner household effectively being able to keep CB with @100K coming in but a single higher rate taxpayer earner losing out at 50/60K.
BurntToastSmell, which is why it was given to the Mother historically in the first instance
Women are being royally screwed over by this government from all angles from what i can see
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