Child benefit changes - what do you think?

[KateMumsnet]

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's ment to be for CHILDREN yet they give more to families with higher incomes than others. How can this be fair, just or a right way to distribute money?

shiny I see what you mean now but better to cap child care tax in that case as that's where the majority of larger families benefit. As far as I am aware, (I could be wrong) child tax is apx £50 per week per child for someone on income support. For 6 children that is £300 a week! Scandalous!

Sorry I mean child tax credits

HipHop, it isn't fair, I know it, you know, everyone knows. They know it too really. This cut is purely for political reasons, nothing more. They should be held to account when it all unravels, which it undoubtedly will. Many tax accountants have warned them it is going to be a disaster. They will push ahead though because they are twats.

ON a separate note it isn't a massive insentive for someone on say £50k to go for a payrise. It could be wiped out by losing the child benefit.

Yes CrackFox and also remember, you'd have to earn nearly twice that as well, as you'd pay the extra in tax and NI. DH would have to earn nearly £5k a year extra to make up for the loss of CB for 3 DC.

Yes indeed Crackfox. If you have 3 children, or £188/month net CB or £2,256/year, you'd have to think very hard how much of a pay rise you'd need to offset the loss of the CB.

These are the calculations that my full-time working single mother sister has had to make re tax credits and pay rises. Ex bastard contributes nothing towards their children's upkeep aside from taking them to McD every once in a while. She realised at one point that it wasn't worth her while going for a particular promotion as it would leave her worse off despite the pay rise.

crackFox and duchesse The benefit system is a complete mess from top to bottom. As a working single mum I was only £30 a week better off in part time work than being sat on my bum and for every £1 I earned over a certain amount I paid extra for council tax and lost housing benefit meaning I only earned 20 pence of each pound in effect. So if I worked full time I would have 16 hours at just 20p in each pound so around £1.50 per hour x 16 hours so another £24 for working full time as opposed to half time.

It's stupid and gives people no incentive to work! I chose to work because I want to set a good example to my son and feel that the money I earned was mine IYSWIM. I am all for people 'working' to 'earn' their benefits but the way the Government are doing this is very very wrong.

The whole system needs sorting out but I fear this Government is going about it all wrong.

We'll lose all our CB even though I'm currently a SAHD and am not earning.

I agree with the principle but just think it's being implemented in a really cack-handed way.

Either everyone should get it or no one should get it. But not this stupid mess where all that going to happen is it's going to go wrong.....

I'm sure this policy will come back and bite them on the arse in the not too distant future. It will certainly be a major contributory factor in bringing them down in 2015 for sure. Can't wait!!

tosh,it's not all have or none have at all
it should go to those who need it most.the v prosperous like cb but don't need it
whereas for others it's v important

Therefore, you'd agree scottishmummy that families on joint incomes of up to £100k don't need it either.

I agree that households that have an income of £60k plus should face cuts to their income, just as everyone else should. £60k is hardly on the poverty line.

However, even aside from the £99k dual earner issue, I do not see why families are targetted by the removal of CB instead of taking money from households with one childless earner, or a childless couple, or a retired couple. What cuts to their income are people in those brackets who earn £60k+ facing?

The fair thing to do would be to put up income tax for those with incomes over a certain level. Yet haven't the Govt just cut the top rate of income tax?

Like I said on page one, I can't argue a family with an income of at least £60k shouldn't face some austerity. It's the fact that this is unfair that pisses me off.

never voting Lib dem ever again

if you're on £100k you don't need cb
on that wage you like getting cb,but it's not essential it's a nice wee extra

YY EdithWeston "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." Exactly this, beautifully put!

The reasons why this is a stupid policy idea have been spelled out upthread. The minister would do well to read, reflect and then U-turn!

I agree scottishmummy, so why do this government seem to think that families on joint incomes of up to £100k are more deserving of child benefit than families on nearly half that. I just don't get it. It is mean, spiteful and divisive.

I completely agree govt all over the shop
coalition make odd uncomfortable bed fellows
soon they will have to orchestrate split to oppositonally fight election

Should be opt-out.

Tick this box if you feel the need to NOT claim this benefit from the government.

Job done. No expense.

And capped at four children, like The Queen, Tony Blair and David Cameron.

I'm a single parent about to loose the benefit and apart from the fact it is the only support I get for my child (Ex pays nothing) other than via me - I should loose it. I don't need it. (I am just over the threshold).
Benefits' are for those in need and as great as it is to get free money every month, in reality I don't need it and when I first started getting it, it felt strange and wrong. To me it is the same way with pensioners with a certain amount of income not getting £250 a year for fuel - give it to people who really need it. And it is NOT about mothers - when you have a child it is via parents' (remember I am a lone parent too) and it is child' benefit not mothers benefit, it is about the money available to benefit the child. If you choose to have three children, live in an expensive part of the world and think yourself responsible you should not then rely onwelfare' to bring them up.
The fairness issue of how it is worked out is difficult and there are those as with everything that end up worse off... i.e. me as if two joint incomes made up mine split `we' would not lose it - but as I started at the start, I don't need it -when you earn the amount set - you don't.

ihategeorgeosborne It will certainly be a major contributory factor in bringing them down in 2015 for sure. Can't wait!! and then what will happen?

and just one more thing - don't you think it is hypocritical to complain about the policy but yet not complain about the person/people on here with a household income of at least £60k complaining at loosing the money that could go to those under the threshold who need it more in tax credits/benefits? would those on sat £45k swap with the £60k household?
So the threshold is too high? how high should it be? if in a couple of years they say - ok we got it wrong - lets up it... to £100K they are then accused of just helping the rich?
£60k household income is not rich - no one said it is, the government just thinks that if you earn that you do not need `welfare'.

I think for me the major problem is the inequality, and I'm not just talking about the family with a joint income of 99k. Imagine two neighbours, couple 1 one parent works full time, earns 61k, other parent looks after 3 children. When CB is taken away they will take home circa 42,160. Couple 2 jobshare equally (and I do know a couple who do this - though have no idea what their income is), their combined salary again is 61k, but this time split equally, so they use all their tax allowance and retain CB, both earn 31.5k (sorry no pound sign on phone); their net income is circa 50400. They have no additional childcare costs because they look after their own children. (for this calculation I have ignored pensions, but if they were to contribute then both would have a decent pension)

The couple who can split their earnings have over 8000 pounds more than the single earner. This isn't fair.

We are on the borders of the 50k limit (though due to NHS rebanding might fall a fair bit lower, but that's another thread). I am looking to increase my modest income, as I only work about 4hrs a week, but my hourly rate is good. We would be better off if dh worked one day a week less and I worked then instead. Of course waiting lists would increase, and there would be no incentive to progress, but 8k can seriously improve your lifestyle!

I should say we are in SE, we will still feed and clothe our children, but I would feel happier about it if the couple on a joint income also lost the same amount of money.

I think they should do away with child benefit and give a deduction for each child and allow childcare costs to be paid from gross wages, not net.

This would help working families and enable those not working to afford taking a job. I had friends from school who had their children before they married and lived in separate addresses to their now husbands. This was so they could afford to continue working. If they didn't do this it would have cost them more than they made to go to work. It is madness that people are doing this. The government (taxpayers) paid housing benefits, childcare costs, credits and child benefit. Once the youngest was in school they got married and moved in together. I don't blame them, I blame the system.

The whole benefits system needs to be overhauled and this is just a piecemeal token change that is going to cost more to administer than monies paid out.

For those who think GBP100K is plenty to live off... It is in the North of the country but it doesn't go very far in London. As posted on here, two children in nursery costs GBP3600 a month. A single parent on GBP100K a year is bringing home about GBP60K at most after taxes. After childcare costs they are left with GBP16,800 to live off. That is equivalent of a single person earning GBP22-24K a year in London which is not a lot. This is why childcare should be paid from gross income and all parents should get a deduction for each child in their care. This would result in taxable income being GBP56,800 instead of GBP100K and tax home would therefore be around GBP34K instead of GBP16.8K. This is before any deduction for having a child under your care. I think it would be the most equitable way to tax families.