child benefit cut(43 Posts)
Just wondering if there is an e-petition that has mumsnet backing to ask the government to reverse the cut to child benefit for higher tax earners?
And no we're not on stacks of money! Missing out as dh just in the bracket. I work part-time to work around childcare so the changes will hit us really hard.
sorry if this should be on a different thread/chat....
I seem to remember my DH starting one on this subject when the cuts were first announced. Not sure what happened to it or whether it gets MN backing. Like you we're just in the bracket but as a SAHM it seems unfair that we'll be penalised as my tax allowence is not taken into consideration.
Our catchment school is poor so we've opted to send our DS to an independent school, with our DD starting when child benefit is cut it will hit us hard too.
Given that so many others are really struggling I guess I just feel we have to do our bit and take it on the chin unfortunately. There have been a lot of threads recently where people are in a desperate state with their finances so I don't know how much support their would be.
I totally agree that those who can afford to take a hit should but I don't think the changes ensure this at all. A family with one main breadwinner earning £44k will get their CB cut yet a family with 2 parents working earning £39k each (so nearly £80k pa joint) will still get child benefit every month. Even if the first family has 4 children and the secnd family has 1, the first family still get it taken away despite being on £34k less per year!
The way they are using household income as an arbitary cut-off regardless of how many children you have is unfair. For people on middle incomes living in cities where housing costs are enormous, they are not rich on £44k per year. In fact if they have two young children and childcare costs as well, they are probably just about able to break even as long as fuel and train prices don't go up as predicted.
It will also lead to a lot of fraud or fiddling the system. Some in the private sector will ask their employer to give them a lower official salary and throw in a lap top or rail card worth £2k or other perks in order to artificially keep their salary just below the cut-off point. People in the public sector or larger organisations probably won't have this option.
Whilst it's true that a couple both earning just under the HRT threshold will keep CB, I wonder how many households that's going to apply to in practice? And how many people are going to accept the idea of keeping their wages down or saying no thanks to promotions, just to stay under the threshold? Perks in lieu like laptops or rail-cards will get taxed heavily - HMRC isn't thick. I'm also a little fed up with the tired old whine that people 'aren't rich on £44k a year'.... maybe not, but they're on nearly twice the average household income, they have options and, with the change only coming in in 2013, they have chance to adjust.
Of all the horrendous cuts the government has made, cutting CB for incomes of £44k+ a year is NOT the one that keeps me awake at night.
I hope people don't take offence to this as is it an honest question and not criticism.
barely and most months manage to cope on k23 household income, no benefits apart from tax credits which help pay for childcare but don't cover the full cost. Sometimes I complain, moan, etc but I get on with it and make cuts wen an where necessary.
How on earth can a family on almost double that income complain about losing £80 a month?
At the very least they need to change it so lone parents just over the threshold don't miss out. Isn't it going to be the case where a couple both on £39k can keep their CB while a lone parent on £41k will lose out.
Do we know much in the way of detail yet? Will it be an absolute where if you earn even 1p in the higher rate you lose it all or will it taper off losing £1 for every £2 over the limit you earn like age related tax allowance for pensioners? Or some other way?
If it is an absolute cut off then it seems very damaging as it puts an effective ceiling for many families at a time when they are talking of universal credit to remove this kind of cliff edge. If it is a taper then that seems fairer as no-one will suddenly become worse off as a result of a pay rise or promotion.
As far as I understand it, it's a all or nothing. There's no taper. So you earn a penny over the HRT band and your CB is gone.
The full details aren't known yet but we can all see the dilemma. The classic example of why CB was unfair was that Cherie Blair QC on a salary of £000s got the same £20/week for young Leo as a mother with no income got for her child. They could have opted to augment CTC and remove CB entirely..... my preference, and something I still think will happen over time... but, short term, that would have meant families on >£25k would lose both. They could have made CB dependent on the household income rather than that of the highest wage-earner.... but there may have been accusations that it was a backward step for women who have been taxed separately for many years now. Similar issues surrounding making CB a taxable allowance (effectively a taper).... because then it would go to the higher wage-earner, which is often not the mother.
FWIW I don't think lone parents will get an allowance.
I think £44k should be it if I'm honest...too difficult to police otherwise to require honestly over a joint income
I know that this isn't a popular answer but it's honestly how I feel about it. If someone brings in £44k in a salary, you are well off enough not to need CB.
It will still need to be policed though, and more importatnly clawed back through tax the following year if one partner claims and the other earns over. Whatever system is introduced, even the supposed 'simple' one that has been mooted, there will still be a great scope for maladmistration or over-complication.
It isn't £80 a month. We have three dcs and our CB is £188 every four weeks and yes we will miss it.
Perry, £44k isn't exactly a huge income nowadays. But I'm not overly bothered about where you draw the line. As long as it's consistent.
It's hard to argue it's 'too difficult to police' when tax credits goes off joint income. I'd have thought it's fairer to just merge CB into tax credits then change the thresholds through that.
The problem with the proposals as they are is that if you earn £1 more than the threshold you lose all your CB. That is whilst your neighbour who both work and can earn nearly double continue to get it.
Take my example. I earn a little bit more than the HRT threshold. OK you can argue I don't NEED it. Fair enough. But then does my friend & her husband 'need it' when they earn about £30k more than me but they will continue to get it?
The thing with taxes is that there are always laws of unintended consequences. Whilst the Tories are extolling the virtues of marriage, we've planned ahead and my OH has got a job already as there's no way we'd keep our head above water once we lose our CB for three kids.
I'm confused. I thought CB hasn't been withdrawn, but the £44,000 threshold was for tax credits?
CB will be withdrawn for HRT payers in 2013. The tax credit thresholds and rules were changed at the start of this tax year and households with incomes over £42k (or thereabouts) now do not qualify for CTC
When CTC was first talked about it was based on HRT but they changed it to household income before it was introduced. Hopefully they will do the same this time. I know 44k sounds a lot but depending on where you live in the SE, you possibly need to earn 10k to cover the commute to work. And agree, with three children the CB makes a difference. However a joint income of 78k, the difference is not so much I would have thought, so let's concentrate on that ridiculous anomaly!
So, how will it work in reality? Traditionally CB has been paid to the mother, so if the mother is not in paid employment, presumably it would be based on her income, rather than household income?
They did talk about it being paid to everyone who claims for children but that anyone in that household who is earning enough to pay HRT will have their tax code change to get it back from them. That is why I wondered if there would be a taper. It also throws up issues where (for example) a young mum is still living with her parents who may be HRT payers.
I don't think they've thought through how it will work in reality. For those who are SAHMs, without income, who don't get tax credits, and whose husbands are Higher Rate Taxpayers (HRT always reminds me of Hormone Replacement Therapy!), the husband is supposed to declare if the wife gets CB. However, as we are supposed to be taxed as individuals, and our details data protected, I don't see that this can be policed. What if the wife doesn't tell her husband that she receives it, as their finances are separate? Will he get done for lying on his return? Will they start sending returns out to all Higher rate taxpayers, when that doesn't happen at present if they earn under a certain level and all income if PAYE? How will HMRC cope with this?
Really good point about being taxed as individuals scary.
Since we're on tax - if it was put up instead of cutting benefits with the 'no taper' approach, it would be cheaper (already got info and system) and fairer (based on exact income). Also gets round 'rich, mean husband' 'impoverished wife' problem.
The idea of making child benefit means-tested is a fine one. But the implementation looks ghastly. As a first step towards eliminating child benefit, it would be much better to limit it to two children per claimant. It would be difficult but not impossible to be prescriptive in the case when families are split up many times, etc - but it would also send a clear message about personal responsibility: people should think very hard about affordability before having children.
Philosophically, though, it is fantastic that this government is dismantling the universality of the welfare system. Of course, they are being utterly hypocritical, keeping the universality principle for pensioners' benefits like Winter Fuel Allowance - but then, those pensioners, by and large, vote Tory. The hypocrisy is a small price to pay to dismantle Labour's welfare-as-lifestyle-choice culture.
LFN the stigmatisation alone will keep us warm at night. Well, that and the burning buses...
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