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Child benefit changes - what do you think?

(1000 Posts)
KateMumsnet (MNHQ) Thu 25-Oct-12 13:50:35

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.

mumnosbest Thu 25-Oct-12 14:23:00

Luckily we don't fit into these categories because we're underpaid and poor. It seems very unfair that the amount is different for single and duel incomes. How do they justify that. For a single parent do they take childcare costs into consideration?

HauntedLittleLunatic Thu 25-Oct-12 14:23:58

The nice thing about child benefit at the moment is that it is a simple system, that is easy to understand and is unbiassed.

Tax credits are the means tested 'child benefit' (amongst other things). If child benefit is effectively going to become means tested why to scrap it and add it as an element of tax credit. Not that I necessarily support this...just sounds as tho they are making it complicated and could actually cut costs by only having to administer another means tested benefit.

ZombTEE Thu 25-Oct-12 14:25:36

It's as insane and ill thought out as all other changes to the benefit system that have been announced.

Anyone ready to riot yet?

mumnosbest Thu 25-Oct-12 14:39:27

I'm in ZombTEE!

Boggler Thu 25-Oct-12 14:54:33

Count me in for the riot too!

I'm going to lose all child benefit because my husband dares to work bloody hard to keep us and we are just over the 60k limit but have no spare cash! We are not rich we don't swan off on exotic holidays and we live in a very modest house. I'm currently on maternity leave with dc2 and am thinking of staying home completely due to astronomic childcare costs - but because husband earns a tidy salary we are being penalised! I think it's bloody unfair considering that a dual income family with £99k coming in will not lose a penny - totally unjust. Tories are not just kicking the unemployed but mothers as well. Why mess with a system that works well? Who is paying for the extra HMRC administrators? I bet when all extra costs are calculated the net saving will be minimal.

Tax breaks for millionaires - penalties for hardworking families!

onelittleclara Thu 25-Oct-12 15:12:20

For a start, 50k in London/SE for a single income family does not a rich person make, in fact we rely on the CB most months to feed ourselves, so I take huge issue with the figure they have put on it, secondly as is now widely argued, next door can have two single incomes of £49k and not be penalised.
This piss poor Government are way to reactionary and cannot seem to think past the next election. I think CB should be restricted to two children though (I have 3DC), and people should be encouraged to opt out of they only use the money for savings.I would argue that nationally a FAMILY income of £80k is a logical cut off and reflects both single and joint incomes. We will be hugely affected. I am currently a SAHM and it is hugely cheaper for me to stay at home than pay for childcare and travel into central London where my job is based (and no I cannot do my job locally as I work in a Government department who has closed all local offices). We are just on the cusp and I write this sitting in a undecorated housing association property (which isn't hugely cheaper than the private rental we were in six months ago) that we sat on a list for 7 years for to get. We are not rich, we just about survive. I don't ask to be subsidised by the taxpayer, but I do think CB is and should remain a universal benefit for children, not parents and that I am being penalised by being a female who earns less and had to sacrifice her job for the sake of her family.

BTW it hasn't been Inland Revenue for several years, so you may want to correct the departmental name smile

izzywizzyisbizzy Thu 25-Oct-12 15:13:28

It's appalling, it's going to cost a fortune to administer and I agree it penalises single parents and SAHMs - why should a couple on £99k keep it and a single parent on tens of thousands less not.

Utter utter madness.

Declutterbug Thu 25-Oct-12 15:14:15

I do not object to cost savings being made, nor to our family having to bear some of those costs. There are 3 objections I have to the implementation of this change:

1 it goes against a manifesto commitment.
2 it penalises me as a sham, as not only does our family lose this because dh earns too much, but unlike a double income family where both earn more moderate amounts that add up in total to over 60k, we only get one tax allowance and do pays 40 percent tax on some of his income. So, we already have less in our pockets than a family with 2 adults who earn 30k and 31k. Given the wealth of research on the early years, I am hugely disappointed that families where one parent decides to stay at home are penalised in these ways.
3 It's apparently fine to have independent taxation when it comes to married couples allowance being abolished, but now my husband and I are considered together for child benefit. So he has to declare a benefit I claim... I am expected to tell him I claim it and he's supposed to tell me his salary. How will they enforce this?

It pisses me off because it's not fair.

BlueGuinefort Thu 25-Oct-12 15:16:19

what Boggler said.

And I am less annoyed about losing the money than I am about the sheer bloody unfairness of the single/dual income discrepancy. Penalises SAHMs and single parents sad

ZombTEE Thu 25-Oct-12 15:17:52

I'm not a SAHM because I freelance but I do feel like I am penalized for trying to make my own company. I currently work very part time as my son is only in school 3 hours a day, with the intention of ramping up when he starts full time school next year.

I do have a childminder 2 afternoons a week, because that's all we can afford. I can't make enough to cover more time than that. As it is my income is just above what it costs to keep my son with her those 2 afternoons.

Before he started preschool he was in daycare 3 full days so I could work and we were just barely breaking even.

I also have health issues that means I need to set my own hours so I can rest during the day.

The government pretty much hates me. They like my husband though. grin

AtiaoftheJulii Thu 25-Oct-12 15:19:32

I'm so upset that in the 2+ years since this was announced that they haven't come up with a fairer way of doing it. It's not that I think we have a right to CB, but the way it's being implemented just feels like a big fuck you to stay at home parents and single parents. My partner pays proportionately more tax than a dual income couple earning the same as his single income, and we're the ones being penalised. If we were all in this together I would not be feeling this resentful!

WipsGlitter Thu 25-Oct-12 15:19:47

DP earns above the threshold (assuming it means all taxable income including bonus), I don't and our joint earnings are below the £100k level. We are assuming that means we are going to lose our child benefit, but only in that I will continue to recieve it but DP will have to pay it back through his self assessment?

I don't think we will be alone in having a not straighforward situation so no wonder they are struggling to find wording to cover all the permutations.

shinyblackgrape Thu 25-Oct-12 15:28:37

Yes - completely agree with the comments above. Cannot believe that the coalition think this is a fair way of dealing with things viz the double incomes.

I'm expecting first DC in November some will get for a few months. Our tax team at work (legal firm - stuffed with ex HMRC) inspectors have advised that it is likely to be a bloody shambles - with the system not being properly updated to show that people have given up their entitlement in January. Therefore, I'm going to opt to keep taking it. DH is self employed so can account for it in his tax return. We always intended to try and save little and often for DC so will probably stick in a savings account and then at least I'll feel I've got something back in my 2p a year interest!

I'm thoroughly pissed off about the whole thing as I feel that we pay a fuckload of tax, which is ever increasing, and get nothing back from it.

shinyblackgrape Thu 25-Oct-12 15:32:19

wips - yes that is my understanding. However, on the advice from work, keep taking it and declare on your DH's tax return as he is doing one anyway. The view at work seems to be that people will waive the right, but the HMRC systems won't be able to process this quickly as it will be a big job updating the systems. Therefore, some people will slip through the net and there will be demands for repayment etc and it will be a huge faff having to call/correspond with HMRC

Piffpaffpoff Thu 25-Oct-12 16:01:55

I am still raging about this. DH earns £55k so we will lose out. We can probably manage on the reduced rate but, as I said on a thread about it when it was first was announced, it's the inequity of it that angers me the most. I have 2dcs and we will lose out. My next door neighbours with only one child could earn £99,999 between them and still get it in full. That's just not right or fair, its just plain wrong. But this government dont appear interested in right or wrong or fairness.

It should be based on total household income IMO.

JackThePumpkinKing Thu 25-Oct-12 16:03:43

How the does spending all this money on assessment and letters and everything else that this involves cost LESS than just leaving it how it is. Does this actually save any money at all. If so, How much?

HOW is it actually going to be implented? I am not a stupid person but I fail to see how on earth this is actually going to work in practice.

OwlLady Thu 25-Oct-12 16:05:32

We live in the home counties and my husband earns over the threshold and we cannot afford to even buy our home. I cannot work because I care for a severely disabled child and I have two other children as well.

Whilst I really in no stretch of the imagination do I class us as poor, it would be vulgar to do so, it does rather grate on my nerves that someone on a dual income of much more will still get. It's a poorly thought out policy and tbh I think David Cameron needs to be brought to task about it. He specifically said in all his pre election talks/information that he would not target those who had children with disabilities and yet we seem to be affected by rather a lot of cuts, including those at a local authority level. Thanks Dave

MsIngaFewmarbles Thu 25-Oct-12 16:05:49

Not happy at all here. DH is a HRT. I am a student. 2/3 of my DC are his stepchildren. He will have money clawed back from the tax return for dc which aren't his sad

MsIngaFewmarbles Thu 25-Oct-12 16:06:13

We rent as we can't afford to buy too.

issimma Thu 25-Oct-12 16:06:27

Message withdrawn at poster's request.

Tincletoes Thu 25-Oct-12 16:16:18

But issmama, while I agree it's unfair on single parents, where me and my DH both work we have to pay childcare fees of nearly £1000 per month. Presumably most couples where there is a SAHP don't?

The thing is, it all just depends on individual circumstances, doesn't it? I could say isn't it unfair my friend who is 10 years older is able to work very part time because she was able to take advantage of the house price increases and so will be eligible. The nice thing about the old system was that it was ultimately just a "fair" benefit really.
It is just stupid that I bet it costs more in admin to implement than it will actually save.

Asinine Thu 25-Oct-12 16:19:08

Exactly what Issimma said.

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'.

I have no problem with CB being taken off any family with combined income of 50k+ as long as the money saved is actually spent on children in lower earning households who will suffer under the universal credit system.

MrsArchieTheInventor Thu 25-Oct-12 16:25:04

I know cuts have to be made and we're all in this together but I thought child benefit was the golden universal benefit that doesn't get touched. Means test tax credits, means test jobseekers' allowance, means test bus passes, but child benefit I always thought was the one thing you could rely on for at least one stable source of income for a family, usually the mother.

As for the argument that child benefit is sometimes used by well off families to buy feed for their horses etc etc, that's a dangerous step towards dictating what benefit is actually spent on. It's none of my business if a person on jobseekers' allowance spends that allowance on fags and booze. Or is it?

MsIngaFewmarbles Thu 25-Oct-12 16:26:19

We are paying £1k a month childcare whilst I am at uni and not earning sad

It is desperately unfair that others with a much higher household income will be unaffected. I also would never claim we are poor but with one income of 55k, 4 dc and 1k per month childcare costs we certainly aren't booking the Bahamas for our hols.

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