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.

This is a very good Telegraph commentary - link

The comparison between a family with one earner earning 99k and a family with 2 each earning 49.5 is much greater than the child benefit that will be lost.

The family with 2 earners will be a lot better off because:

They get to use their full personal allowances x 2 - £8105 extra tax free income.

The amount taxed at the basic rate of 20% is a lot more : 2 x 34370 = 68740 vs 34370

The amount taxed at the higher rate of 40% is a lot less : 2 x 7025 = 14050 vs 56525

The net effect of these is that the family with 2 earners monthly take home pay before pensions etc would be c£5,900 whereas the single earner would take home c£5,300.

So both families have the same Gross income but the family with £600 less net income is the one that loses it's CB.

Doesn't make any sense.

the net effect figures are per month

Children are a luxury lifestyle accessory, like lap dogs, and the tax payer should not be expected to support all those fancy designer clothes, upmarket yoghurts and fancy breakfast cereals that parents buy for them.

You should have known when having your children that the global financial situation might change, so if you are going to be hard up, suck it up and retro fit your family size accordingly. That is what adoption and children's homes are for.

Meanwhile we have free TV licences, free bus passes, age related tax allowances and outsourced private providers to fund, so parents should bugger off and stop grumbling.

I haven't read all the pages, but I agree with the comments on page one. Single earners on £50k are already paying a lot of tax and the changes are unfair on single parents and SAHMs. Fairer for all would be child benefit for two children for everyone and nothing after that. For now I am lucky that the threshold was raised from £44k, which DH is on, to £50k as I am a SAHM, but it would not surprise me if it gets lowered in the future. BurntToast I agree and Mum2Luke that's why I don't work - no family/help with childcare and would be out of pocket if I worked.

As others have said, it does take the piss that dual income get to keep theirs.

(Sorry, don't think I posted link properly above)

headinbooks.wordpress.com/2012/08/03/whose-benefit/

We are one of the families who will lose our CB. We live in London and have a combined income of 75k. I earn 10k of this.

I am worried as to how I will manage as CB is the only guaranteed income I have (I am self employed in my part time work) that I am fully in control of. I find it very humiliating to have to go to my husband for money, even though he is a kind and respectful person. I buy all my clothes from charity shops, only get my hair cut twice a year and have no money for training or further education, which I need to get back into the workplace full-time. I have three children, one with special needs and I use the CB to support their education.

I really wish my DH would go part time so I could work more - very hard to organise family life if one of you is out 8 til 7 every day and the other person is also working. Then we would not lose our CB, we would have the same household income and I would have more respect for myself. I find my lack of economic muscle within the family depressing and disempowering.

avenueone,

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

The most likely outcome is that labour will get back in. I am no labour voter myself, but this policy is just so bloody unfair in every way. If a government cannot implement a fair policy then they should expect to get a kicking at the polls.

lancsdad I think you're missing the point by setting out those comparisons of 2 people each earning £49k or one person earning £99k.

The whole point of the CHILD benefit is that its only paid if you have children - which you have completely ignored in your analysis. If the 2 parents are both at work earning £49k, they WILL have childcare costs.

If as you set out, the difference between 2 x £49k incomes, and 1 x £99k income is around £600 per month net, that wouldn't cover full time childcare for even one child, never mind more than one child.

So 2 earners with children & child care costs lose out. A household with 1 x £99k earner where the other parent is a SAHM IS better off than a household with 2 x £49k earners with children

But why don't you Shamund go out there and earn £65k like you husband rather than £10k? There are far too many women on pin money being kept by Mr Big Bucks. Why is it that way round? It's awfully sexist.

We're going to lose our CB, dh is a GP on £100k so I don't have an issue with it.
But I do have an issue with losing my HRP pension credits. I work in the voluntary sector teaching young mums basic skills and we have chosen that I do this on an unpaid basis because we don't need my income (and I'm disabled so a job is much harder for me to find). I want to get my state pension when I retire. So I'll not stop claiming and they can claw it back from dh's tax next year.
I'm not worried about the loss of income - we have more than enough and all our cash is in a joint account - his salary and my DLA. There's no issue about 'his' or 'my' money. But I'm contributing (in a big way, 3 days a week) to Call-Me-Dave's "big society" and the response is to rob me of my state pension. Thanks, Dave!

morethanpotatoprints - I'm a bit annoyed about about your post to panda above where you say its how people choose to live and that "Somebody earning 15k but spending 13k on childcare can believe they only earn 2k" - thats not what I said in my post.

I completely agree that I earn all of my salary, of course I do, the point I was trying to make as I've said above in answer to LancsDad's post is the strict comparison that everyone is making against 1 x £99k or 2 x £49k earners over simplifies the issue. Of course, if it was just a straight comparison, if both households had roughly the same expenses then treating those 2 households differently wouldn't be fair.

BUT those households CANNOT be the same (and I'm not including single parents in this as I accept single parent families are well and truly out of pocket here) because it is a benefit which is ONLY PAID IF YOU HAVE CHILDREN. So it goes without saying that if both parents work, they will have childcare costs, which as everyone agrees are astronomical in the UK.

I wasn't suggesting that I only earn my salary, less child care costs, I was merely making the point that making a sweeping generalisation that a household with 2 x £30k earners is the same as a 1 x £60k earner is not correct.

Weegimum - we will also continue to claim. I think this is a unfair policy and the more it costs the Tories to implement it the happier I shall be. Yes that's right - the government has reduced me to being that petty. How statesmanlike of them.

Mandy21 most of the people I know who go out to work with more than one child can only afford it because they eiither only work term time, not everyone can do that, or the grandparents look after the children. As all our parents are 80+ this is not possile for us. Besides an easy solution to your arguement is to assess income after childcare vouchers have been claimed, or childcare costs off set. If that was done then it would be unlikely that the remaining difference was more than 8000pa which as I said in my previous post is the difference between one person on 61000 and two people on 31500.

I feel lucky we missed it as hubby not on 50k hes on 41k and thourght when announced was 42k.

Hubbys retail manager so orks some evenings/weekends/bank hols.

we have 3kids age 6, 3 and 19months.

we lost £40 a month tax credits in april.

we live southwest rent privatly going rent round here for 3bed is£700+. we not eligible for affordbale housing or housing benefit.
we cant afford to buy a house.
no free school dinners ,£130 a month council tax. no free prescriptions despite being close to border and everyone getting free prescriptions in wales.

I am currently a sahm as childcare costs are so high.

I did go back fulltime after my 1st but job was not child freindly was salary 20k a year gross £1200 i think net of which 800+went staight on nursery bills, then commuting hardly seeing child or hubby as did alternate shifts. I used to work in deprived areas where saw peeople gettng every benefit under the sun , wasting money, whinging used to make me slightly narked.

This year went to uni open day to look into retraining as social worker as when kids all in school i need to be earning decent salary to pay childcare costs to make it worth while.

but 9grand a year tuition fees mean cant go back uni and retrain.

childcare costs even in school as know someone with 4kids well 3 at primary and is a teacher.

breckfast club-£2.50
afterschool club £7-thats only until 5.30
say £10 per child £30 a day =£150 a week.

parents who use holiday club outside provider which covers only small amount of holidays ie 2/6week summer holiday is £65 per week per child.

I know a few kids in senior and more siblings in yera 6 bus moneys £60 per month per child.

School dinners is £40 month per child-we dont as too costly but 3kids at school-common number round her £120 a month.

middle dd just started preschool in sept shes sept born so just missecd school year dont get grant until term after jan but preschool wouldent hold place so paying £450 for sept-jan.
she already does private day nursery from 18months £40 a day some may describe this as luxury but fater having eldest in nursery due to working i can see how earky years education can benefit a child and their devlopment since dd started preschool shes scored higher than her age. shes got freinds too as i have no family with kids nearby or freinds with kids same age.

eldest does rainbows from age 5 which is luckily cheap, gym and cheerleading not so much but she enjoys it and think good for kids to have hibbies especially when her state school had no extra curricular.

uniform-huge cost as head wouldent allow no n official cardigans £10 which parents constantly complaining are lost mine lost hers 3times last year £30 labeled with name looked in lost property nothing.

Another freind has to buy new uniform as her schools converted to an academy.
Senior parents say the secondry uniform costs are huge.

There are so many costs with families and think the changes penalise families where 1parent works.

Its uk kids i feel sorry for we such an expensive country feel family life is rubbish as people working alternate shifts, long hours. when i worked fulltime i missed a lot of my eldest as a toddler.

Even when they older they still time consuming

school runs
playates
parties

homework

just general parenting
we havent ever been abroad with kids as its £300 just for new passports.

we dont use private schools.
we rarly go out.
we shop at lidls.

my local fb selling group very affluent area is very busy I can see how squeezed middle is affected as see it every day. It feels worse now than during. the crunch

Do the lower earners really need any more when they get loads other benefits.

be much better cap at 2kids

put more money into childcare.

consider outgoings as well as income as childcare so high and not very flexible

most nurserys dont open until 8am and shut at 6
shut banks holds and our old one whole week at xmas when we worked in retail!

Also the whole mum not having money worries me as know some with some very tigh controlling dhs.

The winter fuel for wealthy pensioners who live in spain winds me up.

yes there are some poor pensioners just not near me.

mam29, We are in similar situation to you. Live in rented in SW as can't afford to buy. Similar aged children and similar out goings. DH works away a lot so it would be very difficult for me to work at the moment. Our youngest is 18 months. I too went back to work when my oldest was a baby, but child care, running two cars, etc made it not financially viable.

DH is between 50 and 60k so we will lose most of our CB for 3DC and yes, I will miss it. This income does not make you 'rich' whatever anyone says. Also, it makes me feel like SAHP are insignificant in the eyes of government. I thought the conservatives were pro traditional families with a SAHP. David Cameron went into the election promising tax breaks for married couples and ending shafting them more than they could ever have imagined.

The more I read of this, the more I woukd really like to see if a web chat could be organised with someone to explain the position based on my earlier post above. I've reported that to mumsnet but no response yet. Will keep trying.

The outgoings of a dual income family will usually be higher than a single income family bringing in the same amount.

BUT that isn't the point. Child benefit, as a universal benefit, is easy and cost efficient to administer. The changed system is not.

It is typical ideologically driven policy at its worst.

That was a good post Mam. I feel as though I have to justify why I don't work, but my old job only paid £20k, which for the area we live in is as good as it gets. I do not have professional qualifications so cannot become the breadwinner and if I work then it is not worth it for the reasons Mam listed. ShinyBlackGrape, that was an interesting article too.

We will lose some of our CB because DH earns over £50,000. My earnings (around £20,000) make no difference to that. We have three dcs but all are at school now and we only have childcare costs after school and in holidays for our youngest. My friend has 4 dc, one of whom is still under school age so if she chose to work she would have a big bill for that and for holiday etc care for at least two other dcs. They will lose ALL of their CB because of her husband's earnings. I have another friend with two dcs under school age and big childcare costs. They will also lose all their CB. This policy is so unfair it drives me crazy.

"But why don't you Shamund go out there and earn £65k like you husband rather than £10k? There are far too many women on pin money being kept by Mr Big Bucks. Why is it that way round? It's awfully sexist."

Because I'm 46 Xenia, and my last permanent salaried post was working as a teacher in FE, where the majority of teachers doing the type of job that I was now earn about 28K a year. (salaries have hardly gone up since I started in the sector in 1995).

What jobs pay 65K a year to new entrants to the profession with no experience?

My husband is an IT manager with 20 years experience under his belt.

One way of offsetting the cost is by reducing the taxable income below 5/60000; this can be done by increasing pension contributions and/or claming 55 pounds a week childcare vouchers, if both were above the level then both could trim their salaries!

I think I am lucky, dh is probably close enough to bring his taxable salary below 50k, my youngest is soon going to get free nursery place (for as long as that benefit continues); my employer is v childcare friendly, and if I am able to increase my hours it can largely be done at a time to suit me, from home during term time.

mam29 and ihategeorgeosborne I was in your positions a few years ago and I know how tough it can be, some places are very expensive, and it's not as easy as saying that you can just move, as then there may not be the work available. In expensive areas there will be a catch 22 with childcare costs too expensive, but one salary not enough. It will get easier for you both though when you can work once the dc are in school.

Weegimum - they have changed it now so that you will still get your HRP credits.

Like others here we're likely to lose some of our child benefit. We will manage (fortunately we live in a cheaper part of the country), but I'm still v annoyed by the way this is being implemented. I can't imagine it being anything other than a complex shambles that costs more to administer than it saves.

I've just written to my mp about it and would encourage others to do the same. The Tories have already been forced to do a u-turn on other policies they've tried to bring in.

Hi,

Have posted on other threads about this but delighted it's being kept in the spotlight as it is a ridiculous proposal and totally unjust.

Without disclosing too much information about our personal circumstances, we will lose our CB in January. Our total household income is nowhere near £100k but one salary will tip us over the limit. I agree it is completely unfair that under the new rules proposed, a family can each earn £49,999 each and still claim 100% of their CB yet if one parent earns over £60, you lose it altogether. There is no thought for SAHM in this that have sacrificed careers to bring up children nor of the squeezed middle classes that pay extortionate childcare costs in order to work to pay our fucking taxes.

I am just so bloody incensed by the arrogant and ill thought out way that this policy has been conceived.

I have actually written to Cameron and Osbourne on many occasions since the April budget asking them to have the decency to rethink this policy and to ensure that its application is at least fair. They couldn't give the first fuck about this and the responses I have had from their communications team say as much

The last letter I got from the Treasury's office was just so nonsensical - I have passed it to friends to try and decipher and they all agree, it is 2 pages of utter bollocks that makes no sense whatsoever. One of the paragraphs in response to a question I had asked about single income familiies and the CB changes stated that if you were on a single income over £60k, you would be wealthier as a family than a two income family each earning £50k. Go figure.

What is all the more galling about this is that now the discrepancies are being pointed out to them, they are so arrogant that they refuse to change them and make for a fairer system.

I have no problems with our CB being taken away but why then should another family earn £50k each (so more than us) and they end up getting 100% of their CB - it makes no sense whatsoever.

This Government and the key figures within it are immoral. They have no care or concern for the hard working families that make up this country and it plainly shows through their policies and actions. Look at Osbourne and the arrogance shown in the 1st class rail carriage last week. Look at the outrage shown for Jimmy Carr et al by our own Prime Minister for making the most of a Jersey tax haven - the same Prime Minister who used the legal loopholes available to avoid paying inheritance tax on his late father's estate.

It's one rule for them, another for the little people. If they truly wanted to reduce the deficit, stop consistently hitting the hard working families of this country and start getting the really higher tax earners to delve a little deeper in their pockets, stop the Philip Greens of the world manipulating the system to not pay taxes in the UK and implement measures where the Starbucks, Vodaphone et al of the world pay some fucking taxes in the country in which they are operating.