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.

smelly - totally agree. It is the complete arbitrary unfairness of this that really pisses me off. I'd actually have more respect for the government if, rather than desperately trying to justify the unjustifiable, they just said look, we know it's unfair but we don't actually give a fuck.

I don't suppose you could put the letter you received on your profile page. I would be very interested to read it. Understand if not.

They're doing a lovely job of pitting SAHPs against WOHPs, aren't they?

I haven't got a scanner shiny - I'll see if I can dig out the letter and if I still have it, I'll re-type it out and PM it to you.

3bunnies I agree, its completely unfair, but there are a number of generalisations that make me annoyed. I don't doubt your experience, but my experience is different. Most of my mum friends work - some because they want to, some because they have to. Most (if not all) do not have term time only jobs and don't have relatives that can help out with childcare.

My parents and my in-laws all live abroad and I work throughout the year (term time and holidays). We have 2 children of school age but can't afford holiday clubs so we try to juggle the holidays by working from home, my husband and I working stupid hours (I'll get to work at 6am and be home for 2pm (then work when the children are in bed), he'll go to work when I get back at 2pm and come home at midnight) or he'll have a day off in the week and then work all weekend to make up the time. We haven't had a proper family holiday for years because we can't afford for us both to take annual leave at the same time.

Yes, life would be a million times easier logistically if I was a SAHM, or had grandparents on tap, or only worked term time, but thats not reality. The generalisation that 2 parents only work if the mothers job is term time only or she has help is just wrong (IMO).

Fab smelly. Many thanks or could you just take a photo of each page and send it? Might be easier? yiu could cut your name and address off the top.

I'm going to write to my mp and I'd really like to reference in your response (no names, I promise!) just to put them on notice not to send another nonsensical reply courtesy of the exchequer

I would have no problem with it, IF the system was fair, i.e. that those families where the combined income is over £50k have their CB reduced (or stopped all together if it's over £60k).

It is outrageous that a single income family (whether that be where only one parent works or a single parent household) will lose out, but a dual income family where (lets say for example) both parents earn £49k will still get CB. No-one needs me to tell them, a family with a combined income of £98k is far better off then a family with a single income of £50k.

Utter madness.

We are going to lose half of our CB.

We have three children I am a SAHM and do rely on the money it brings us, it's used for basics such as food.

I feel very bitter that we are going to lose money yet dual income families who can earn almost double between them won't. It's the unfairness that makes the cuts hard to deal with.

What's the betting that the thresholds won't change?

Before too long, £60k will not be a decent salary and child benefit will only be payable to the poor.

Even if we get a change of government next election, it will be quite difficult for them to reinstate this as a universal benefit.

Yeah were gonna be pretty screwed here!! Were struggling as it is!

Smelly

Would love to read that letter, too.

I just want them to admit it's illogical and unfair. It's as though they think we're all too daft to realise what's going on. If we all wrote letters/tweets/emails like smelly and shiny it would have some impact. I'm emaiing radio4 news about it, it only takes a few minutes.

Totally agree about getting tax out of the multisquillion pound businesses, also people should boycott all those shops if they think their ethics stink.

wrt single/dual income families, the outgoings of a dual income family are generally higher than that of a single income one. Probably not £49k higher, to be fair, but it still isn't so clear cut.

BUT child benefit should remain a universal one. The moment you start messing with that, you get anomolies such as the family on 2 * 49k qualifying and those on £50k not.

Hopefully the government also have a 'pleb' employed to read these threads to pass on what the littlefolk think.

I'm sorry but I really don't understand why this us considered to be more unfair to sahm than to mums who work.

tilder for some SAHM , hopefully not many, CB is the only money that they feel is their own.

If it ensures that there are many fewer housewives it is a very good change. If a woman marries a rich - ish man (over these limits) and does not earn her own money I don't see why she should winge about the change.

However as I said above removing universal benefits means richer people as I am then do not feel bought into the system so the compact between us and the state disappears. If you feel you get nothing back for supporting so many benefits claimants from your taxes, those of us who pay heaps of tax, then you feel less amenable to the state.

I don't think it's as unfair as soe are making out tilder - but it is an anomaly that a single earner family with a household income of 60k will get nothing, whereas a dual earner family with a considerable higher income will continue to qualify.

Right, am a speedy typer so here is the letter in full. I won't print the name of the person who sent it as they may have an issue with the same being reproduced here but suffice to say, it is from a member of the Correspondence Team of HM Treasury in response to one of my letters to George Osbourne. Re-reading it now, it is not as anger inducing as it was on first receipt - albeit, I have written many letters and every time fail to get sufficient answers on why they are not addressing this discrepancy.

Anyway, letter in full below.

Dear >>, Thank you for your further letter dated 13 August about Child Benefit. As it is not practical for Ministers to respond to all the letters they receive, I have been asked to reply on their behalf.

CB will continue to be paid to all families who claim it and who are entitled to it. From January 2013 a tax charge will be used to withdraw CB so that people on lower incomes do not continue to subsidise those who are better off. The tax charge will only apply to people on an income over £50,000, who claim CB or whose partner claims CB. This charge will increase gradually for taxpayers with an income between £50k ? 60k.

You have asked about the affect of the new CB tax charge on single income families. It is important to note that average incomes are actually higher in single income households with one person earning over £50k than in households with two incomes and a joint income over £50k. The average income for those affected by the charge is £88,000. This compares to £60,000 for families with a joint income over £50,000.

As well as this, looking at total household income would mean finding out the incomes of everyone in each of the 8 million households getting CB. This would effectively introduce a new means test. The Government?s approach will withdraw CB from those on high incomes whilst leaving the majority of claimants unaffected. 85% of families will be completely unaffected by the changes. Those families with at least one taxpayer with an income over £60,000 can choose not to receive the CB which means that they do not have to pay the tax charge at all.

The Government realise that the cost of childcare is one of the most important considerations for working parents. Government spending in this area is high, we support low income families with up to 70% of childcare costs through the Working Tax Credit as well as providing 15hours a week of free early learning for all 3 and 4 yr old and all disadvantaged 2 yr olds. In addition to this Employer Supported Childcare is a Government initiative that allows participating employers to offer their staff childcare vouchers exempt from income tax and disregarded for National Insurance Contributions. The aim of this support is primarily to encourage employers to engage with the issue of childcare, but it also helps to make childcare more affordable for working parents

The support the Government provides is focused on low income families but childcare vouchers and free early learning are available to help parents regardless of income. Unfortunately, increasing the childcare voucher cap would result in a shortfall of revenue and mean either further reductions in spending or raising revenue elsewhere, for example through increasing overall tax limits to account for the loss. In a world with limited resources, the Government has to prioritise support for childcare costs on those who need it the most, but policy in this area remains under review.

Yours sincerely....

I agree wholeheartedly with most of that post, Xenia. But I do see why SAHPs are unhappy.

Ok. So its based on the idea that a sahm may not get money directly from her partner an therefore cb is her independent income?

Thanks guys seeing my point of veiw.

when i tell family freinds that hubbys on 41k gross they think we minted but we not.

we dident buy house at right time.

now banks want 20-30%deposit.

a few years back when eldest was tiny went to barclays at time both working had combined income of £52k and got offered £125,000 not enough to buy flat where we are.

We looked into gettng on housing list stood no chance.
so we stuck i private rental with costs going up every year.

Since giving up job retail managemnet which is hard as not allowed holiday xmas and easter. 50hours a week area manager ringing all time and if childs sick getting huge lecture on how my stores more important,.

But do kind of feel like lesser person not working.
I would love to work but dont have any reliable affordble childcare and last few years sepnt looking after family allowing hubby to get promotions.

But I have been on school pta last 2years.
im on middle dd preschool committee
ocassionally help out rainbows.

peer supporter for breastfeeding running voluntry support groups at clinic . had to do 6week course with midwife.

So i guess im community minded and part of desired big soceity.

Also to me theres big difference in being a kept woman.

theres the ladies who go out for lunch, never worry about their grocery bill and reguarly go salon or shopping.

im a kept woman in sense

hubby pays rent, bills and majority of food.
i dont get pocket/pin money to spend on myself.

we both feel guilty buying ourselves stuff.
the kids always needs new things school shoes are 30-40quid a pair!

I dont like way sahm are demonised as lazy , choosing not to work and sponging off the state.

Apart from child benefit thats all we get-no other benefits.
we chose to have 3kids all 3planned and we supporting them.

or child tax credit stopped in april £40 a month which have missed,
did think could make up 40 by selling but ebay fees so high and really hard to sell things these days.

I tend to sell stuff which enables me to but new stuff.
started xmas shopping mostly sales /2nd hand to spread the cost with 3kids-it wont be an extragent xmas.

I do know people at lower income scale either unemployed or low income jobs tax credits and they never sort of worry can they afford another child as attitude is well we get extra cb and tax credits to make up shortfall, ohh could get bigger house.

I have in past looked at part time jobs even 4hour shop jobs who say must be fully flexible and unless you work in school job term time its very tricky as they have so many holidays.

Im looking for something to bring in extra money over xmas.
Its hard as copetative market.

Because I was senor manager and have degree i must seem overqualified. Really nights would be perfect but then wouldent see hubby much and be very tired in the day time.

middle dd starts school sept 2014 and youngest 2015 as have 20month gap.

want to start youngest in some kind childcare for his development. also treat all 3equally so they have chance to do clubs ect.

We could be much worse off so dont moan too much.

we live in nice area house bit small but we have nice garden and park nearby.

we budget very carefully but hard when energy and foods rises so quick.

kids never go without even if it is 2nd hand.

we manage around 4 paid days out a year the rest of time try do free stuff and cheap hols in uk as for me its about building happy memories.

I think many working families not looking for handouts.
but recognition that we bringing up workers of the future in aging population that our kids will still be paying pfi bills when they adults, the fact they may not afford to go university, they may not eb able to find well paid jobs and be living at home until they 30s, and never afford to buy a house pretty rubbish. we just need a break/breather in times of low pay rises, high inflation , low interest rates savings, low job security and rising food utilities its perfect storm theres no safety net it will be the middleclass kids that suffer.

Here they cant provide enough or decent state schools so some parents have strain of school fees too.

tilder, when CB was introduced that was a big reason for it being paid directly to the mother. I'd hope there is less of a need for that today (although reading the Relationships topic I'm not so sure that's the case).

It was paid directly to the mother as that was seen as the most likely way that children would actually benefit from the money.

If you are a single parent, you have all the child care costs AND only the one salary. They are the worst hit imo.

I was dissatisfied with the response I got from my Tory MP when I wrote to them. I decided to meet him in one of his surgeries. It was almost painful watching him try to justify the cuts. DH said that it was pretty obvious that he didn't agree with it either. He couldn't obviously tell us that of course.

I really hope someone from government is reading this thread. If not, they should be.

Mandy21 my experience could be different being in the SE, I don't know where you are, and having younger children, certainly for me when I was on 30000, child care costs and travel would mean with 2 children in full time nursery I would take home 2 pounds a day, as long as I went to work naked and didn't eat any lunch/ contribute to leaving presents etc. Neither my job or dh could be done outside of 9-5 (well I could work longer hours but would still need to be there 9-5 as well), so we couldn't juggle childcare. Happily now my employer is uber flexible so I can work whenever and wherever as long as the job is done. I like you will be up at midnight finishing my work and often work on weekends, but I am lucky that I can fit it in around dh and still earn a fair income, tax free! The only people I know who don't have grandparents / and both parents worked standard hours, had nannies and were earning silly money. That just seems to be the way the economics work where I live. It does change once the children are in school, and happily for us we are approaching that stage so the impact won't be as great.

I guess that is why I feel it is unfair that two people earning 30500 keep all of their benefits, or even earning 34000 and claiming 55 pounds a week childcare each can keep their benefit, but someone with a single income of 61000 loses it all, plus has no married tax allowance etc so is 8000 pounds worse off. If it were 1 or 2 thousand then maybe but 8000 is a lot, and a mother with three children at home is doing the same work (hopefully) as a childminder with 3 mindees. reminds self to get off mumsnet and check work e-mails

I am grateful that mine are getting too old for me to get it rather than just starting out. It is really unfair, particularly as the Higher level of tax is pitched so low.

I think it will get whittled down like you say Jenai.

also I think if they can pay it to people's whose children live abroad, they can pay it to all the residential children here regardless of their parent's income.