im so anxious about threats to cut ctc...

One of the reasons that is costs so much to rent or buy a house is because people have inflated their salaries with tax credits/ child benefit. Landlords/ estate agents can only charge what people are willing to pay. Tax credits are great for the poorest in society but a poison to most.

I don't think saying that people should control the number of their children makes you some kind of fascist.

We are a middle income family, we can afford one child so we have one. We would like another but we can't afford it so we don't have the child. I don't think someone with my kind if income should think we want a child that we cannot afford - I know we will claim child benefit and tax credits.

In a similar manner I would love to be a SAHM but I can't afford to be, so I go to work. Someone should not be able to claim benefits to fund a lifestyle choice such as staying at home - unless you are a carer.

Tax credits have added to a sense of entitlement and enabled big companies to pay the working poor a pittance.

If people earning an above average wage need benefits to survive something has gone very wrong.

I don't claim anything and never have so I probably don't understand the system BUT
I presume the level of Tax credits are the same wherever you live in the country.

This could explain why some people seem to manage nicely on an average salary and others struggle. I mean it costs £800 in my area to rent a 2 bed flat and at least £1100 for a house. As housing is most peoples main expense it doesn't seem right that the current system doesn't take this into account.

I wonder without govt interference via tax credits whether wages and rents would be at affordable levels. I remember something about demand and supply when I did a A Level Economics back in the dark ages!

I'm very worried about what it means for us - we have two kids and rely on the CTC to help us pay for childcare -without it I wouldn't be able to afford to work

my husband is disabled and cannot work nor look after the children. I work in the public sector and am facing a pay freeze (even if I get to keep a job given the public sector cuts) so we are facing

less tax credit
less child benefit
higher income tax
higher NI
frozen ill health pension for DH
increase on VAT
lower income for me

The point is if you deduct the childcare cost, it is no longer a good salary and can even mean you can no longer afford to work. Definatly think this government is going to force women out of work.

I take the point that there might need to be some sort of tapering off over time, to allow people to adjust but reject the idea that welfare is only being used for when things go tits up.

Plenty of people are planning on having children and using CTCs et al to help them do so. This is what New Labour intended to happen and is why it wanted more than simply "the poor" to get such benefits. By increasing the number of clients, it sought to enhance its electoral chances - a cynical manipulation of the welfare system is ever there was one.

And as for the idea of lifting children out of "poverty" - it is a relative concept and based on people's earnings relative to others...extended to its logical conclusion, my getting a pay rise or bonus makes you poorer, relatively speaking at any rate.

Still don't see why people in work earning a good salary need benefits?

Thanks TWFU that is the most logical way that it can be done and if it is reduced every April say then this would alleviate a lot of worries and would not be so bad on the purse strings.

Heres hoping that they see it that way as well

are you sure about the family element only being effected [and not the childcare bit]? I havn't seen in the media there being any distinction being made, or anywhere else for that matter? By the way, I hope and fingers crossed you are right!

If you're getting childcare costs then you will be getting more than £545 a year and so wouldn't be affected by lowering the threshold at which the family element is withdrawn.

But what about families earning 35k who get that £545 + childcare costs? It is one thing to take away £545 a year but another thing to remove the childcare?

If you earn 35k on one way with a SAHP then thats one thing but if you both earn 18k each (am guessing about 2k take home between you?) then pay out childcare for two children at £1200 a month then you will have £800 left over - one of you is better off not working. Your pay would then be 18k which would put you in the bracket that could claim

35k as a single income would put you in the 40% tax bracket, and by mn's standard you would then be considered one of the filthy rich.

Me too em. We can hand hold!

Not a good position to be in.

Noddy, that isn't my arguement at all, i agree that outgoings should be considered. I was just pointing out that is what others/the government may argue.

Thanks for that TWFU, I think that makes sense .

It does seem though, from what you say, if you have one child that those earning £50k will lose the same amount as those earning £25k, is that right?

You can't just disrupt a family set up by upping sticks and miving away from friends and family though!

thanks thewoman interesting

Noddy, i agree that outgoings are not calculated but then it could be argued that why should people be subsidised for living in a more expensive area.

en83, I am worried to as it looks like we too may fall into the area that is cut, 25 to 35k, if this is the case we will be up shit creek.

As I previously said dh has had no payrise for 2 years and the company has made massive cutbacks already. I am a midwife in the nhs so not on mega bucks myself! Without tax credits we will struggle.

I've had a look at the IFS report, which is what all the news reports are being based on and from what I understand there is some massive scaremongering going on (probably because most journalists don't understand Tax Credits). This is my understanding (please note I cannot predict what will actually happen in the budget!)

It might help to briefly explain how tax credits are calculated. Basically, there are a number of amounts of money called 'elements' (working over 16 hours a week, working over 30 hours a week, couple and lone parent element, the amount spent on childcare up to a certain amount, a family element and then an amount for each child) which are added together to give a total theoretical entitlement to working and child tax credits. This amount is then gradually reduced based on the household income. The first £6420 of income is ignored and then for every £1 that you earn above this, 39p is taken off your tax credits entitlement.

Once the amount of tax credits has been reduced to £545 it is currently frozen at this amount until your income reaches £50K. So, in practice if you only have 1 child then anyone on an income between about £24 and £50K will get £545 a year.

For anyone with an income of above £50K the current system dictates that they have their family element (the £545) reduced by 6p for every £1 they earn over £50K. So, you will continue to receive something until your income reaches about £59K.

The proposals about 'no child tax credits if you earn over £25K' which we keep reading about in the press are actually that this £50,000 threshold at which you are guaranteed to receive at least £545 is removed completely. Because of 39p being removed for every £1 you earn, in practice this would mean that if you have 1 child then you would not receive anything in tax credits once your income reached about £25,000. If you have more than 1 child then you would carry on getting some money until your income reached a higher level (about £31K for 2 kids, £37K for 3 kids etc etc).

The jist of all this in case you didn't follow this (hideously complicated system) - if you currently get more than £545 a year in tax credits (£1090 if you have a baby under 1 year) then you shouldn't be affected if these proposals are put into practice. If you currently get £545 or less then you may get a reduced amount or nothing.

Hopefully this should reassure people a bit. Certainly don't go giving up your job or reducing your hours - tax credits are currently are likely to continue to be reduced on a gradual basis and you should never be in a situation where you will be better off overall by earning less money at work, at least in terms of tax credits.

is it the child tax being cut in my case i get £130 a mnth
or child benefit which i get £40 a mnth?

I agree riven.salaries mean nothing when filling in forms as there is no 'outgoings' calculated.Eg housing costs vary everywhere abd some people pay a fortune to travel to and from work