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.

Xenia - you really do seem to have a bee in your bonnet about women who aren't high earners.

Not everyone can be a high earner, there aren't enough of those types of jobs, and at the same time we need people to do every type of work.

Who is going to care for our sick and elderly, if everyone studies to be a lawyer?!

As jobs go "belly up" that's why it is better if both keep their careers. Also yes women may marry for love but surprise surprise 4 in 5 marry someone who earns more s, there may be no conscious money seeking there is an attraction to the good provider. If you look at any number of mumsnet threads women are with men who just happen to earn more. They were not attracted to the doc tor's surgery male cleaner but to the doctor himself etc etc. Anyway it's off point except for my piont that if we make it hard for housewives financially such as this measure (and I am delighted if we can say Cameron is the working mother supporter who will equalise more maternity and paternity leave and chase housewives back into positions of power) may be more of them can rise to the top.

I certsanily agree the upper rate tax level is pretty low now for 40% but someone a pensioner writing in today's papers reminded us that we used to pay 35% basic rate tax - I think I paid that when I first started out, that was the starting point. If we merged tax and NI which together are aboutr 33% I think and had that as a flat including on savings and made the capital gains tax rate that too and abolished all these benefits, credits, CB for those in work we might get the economy moving again and everyone woudl think okay I've paid my third to the state and the rest is mine.

actually i agree,its prudent not to be dependent upon another waged adult
nor woukd i give up my financial autonomy
two wages is a good safety net and more than that i love working

Doh!! It's hardly surprising most women end up with a bloke who earns more, given that, statistically, men in this country earn more than women.

Throw a stick in the local pub and you'll hit one. And if he doesn't earn more than you now, he will in 20 years.

Mandy, those wraparound child care figures are eye-watering.

I'm in France at the moment where at DD3's school breakfast club is ?1.50 a day 7-9 and after school club (includes "goûter") is ?2.50, or ?3.00 for both where the facility is used more than 3 times a week. Total bill for a child if they use the facility all 4 school days of the week: ?12/week.

Wednesdays are a day off in primary school and the children of working parents can go to "centre aéré" where they do all sorts of activities on that day for a very reasonable amount of money.

I don't know if it is subsidised by the state, but all I'll say is that it's affordable, by pretty much everyone.

I am new to mumsnet but have been hovering for months ,this topic really interests me! we as a family earn 26K +a year after tax ,child tax credit and child benefit are included in this sum,we are not entitled to wtc ,my partner works full time40+hrs a wk and i work partime 2 /3 days pw.As a rule iv'e noticed many of you disagree with the morals behind some family's which are soley reliant on benefits, but throughout this thread you make it perfectly clear that despite you're own incomes of 55k+ you still feel you would be let down by the government should this privilage be taken away from you !

Can someone explain why £36 million is being paid out to children who have never set foot in this country (2/3rds living in Poland) merely because one of their parents is paying NI over here?

We will lose our CB. Sadly, we rely on it to buy things for the kids. Last month it bought 2 x shoes and, a winter coat and a cardigan.

Our standard of living has really taken a dive, both NHS workers, no pay rise in about 4 years.

Ok, means test us, but means test the rich elderly people in my neighbourhood who have no mortgage, no child care and don't need to run two cars. I'm sorry but those years when you are bringing up children are horribly expensive and we've never struggled like this before. It does make me resent my very wealthy elderly neighbours their winter fuel allowance/free TV licence etc.

Nobody likes to lose something they always had though. It has always been a non means tested benefit and such a small amount related to the amount of tax paid by HRT payers. I think the person who said increasing tax rate for all HRT payers would be fairer.

It has all be said before.
(1) families with one earner just over the very arbitrary limit (which I had heard was the 40% tax bracket, but which is being referred to on here as £50k) are being penalised, whilst a dual income couple on a combined income of up to £99,999 would be eligible for the benefit. I know people who have huge assets, run own businesses etc., and pay themselves lower tax bracket income salaries - they will continue to receive CB despite all their personal wealth.
(2) It will be expensive and difficult to administer - savings made will be minimal.
(3) An income of £50k in many part of the country, for a family, is not a fortune.
(4) If you're already being taxed at 40% on what you earn over a given amount, then have CB withdrawn, it hardly encourages people to work hard.
(5) If tax allowances aren't transferable between partners in a marriage or civil partnership, why should a SAHP's only income be withdrawn because his/her partner earns £x? Sadly there are a few relationships out there where SAHPs are given 'an allowance' by the wage earner, and this will really affect them. (Not that I think the state should subsidise financially controlling fuckwits people who treat their partners like paid staff.

Personally too, I think very young children do benefit from staying at home, if it can be managed financially by their parent(s), and if the SAHP/part-time worker is happy to do so. Also, for many families the going back to work / staying at home with preschool age kids is a no-brainer financially due the cost, availability and quality of childcare. The withdrawal of CB is a double kick in the teeth.

The only good thing that will come out of this is that the Tories will be lose the next election. They are so out of touch, and Osborne's arrogance means he will not renege on this poorly thought out policy. Whatever he says: We are not in this together.

From the independent article (linked above):

An HMRC spokesman said: ?Letters explaining the new child benefit rules will be issued in batches from next week, according to plan. There are no delays, and plenty of time for those affected to consider their options and make an informed choice in time for the 7 January rule change.?

Consider your options: which one of the kids is your favourite?!

I am a sahm. Dh earns just over 60k, some years more with a bonus. However he doesn't split this equally and is much much better off than me. We will lose it and he won't make up the difference or even half of the difference.
So I will be significantly worse off but to him, the higher tax payer, it won't make any change.

Having the small amount of money of my own made me feel better and safer. And I do know of couples where household income is nearly 100k with only one child who will keep it, versus families of single income of around 60k and several children who will lose it.

How can it be fair?

From the NBC website:

"HMRC says it will "expect" couples to give each other basic financial details to see if they must be taxed.

HMRC will also let taxpayers ask for rudimentary information from its records to see whether or not their partners receive child benefit, or have an "adjusted net income" above £50,000, and should be paying the new tax.

This runs counter to the general principle of taxpayer confidentiality, which has been a formal part of the income tax system since 1803, as well as against the policy of separate taxation of married couples which has been in place since 1991.

But HMRC says its rules give it the authority to do this."

REALLY??? Dh would be able to ask hmrc how high my income is and vice versa and they reckon this is legal? I'm thinking we should all go and look at the detail of the data protection legislation and the information commissioner's website.

BBC website. Stoopid iPad

I have no objection to the benefit being taken away - I'm afraid I am of the opinion that it is a personal choice to have a child and up to the parents to be able to provide for that child (no matter what they earn) - BUT I do object to the inequality of the system. Either husband and wife are taxed separately or they are taxed together, the government (or any other body) should not be able to pick and choose when to deem them one unit and when to see them as separate entities.

I waited til age 38 to have my first child partly due to finances and it's likely I won't have another as we simply couldn't afford 2 lots of childcare and couldn't cope on only one salary - we live in London and are bursting out of our tiny flat. If we want to move somewhere bigger then we need 2 salaries.

Child benefit shouldn't feature in anyone's mind when deciding whether to have a child.

Incidentally , we're not living in central London we're in zone 4 and my husband is only just over the threshold so we will lose the benefit even though I don't earn anywhere close to it - so this is not the opinion of someone in a 'privileged' position.

It is the taking away of something we have come to rely on which is what bites the most.... like taking a sudden pay cut at work.... if you spend to your income, then you need to find that money or find something to cut back on.

I looked athte confidentiality aspect of this too as raised above. At present you dont' have to tell your spouse what you earn. You won't under this either but HMRC has been given the power to let one spouse know if the other is over the limit. So if someone has told their spouse none o your business if I earn £1m or £10k nowHMRC will reveail if the person is above that or not but not the sum. If the spouse pretends to earn little people will now know. If the spouse is very very well off but lies to HMRC but keeps the tax evasion fdrom the wife or husband who now finds out Mr rolls Royce declares under £50kl to HMRC a year that could be interesting for some couples too.

As someone who thinks adults should earn their own mnoey and never live off the money of another and that it's very unwise to work part time or be a housewife I am not against the retention here of single person taxation but the confidentiality issue is interesting. however if the law has been changed to allow HMRC to do what it chooses that will trump the Data Protection Act as if things are disclosed which the law allows then it's fine. It must be a very weird marriage where you don't nkow what your other half earns, have no joint accoutns, never see their P60 or payslip.

ANyway the problem for people is change. Eg on student fees had we known at birth fees woudl be £30k for a first degree people could have spent 18 years saving for that as they do in the USA> Instead itw as announced without time for people to put money by. The child benefit change has come about quite quickly too.

By the way it replaced a child tax allowance that husbands tended to claim against their highest rates of tax because it was felt non working mothers were not getting money in their own hand and for the first 10 years at least it was onl paid to the mother and that was an important part of its concept. However before that you had a tax allowance for each child which I presume my parents would have had before about 1970 when child benefit came in.

I have a friend with 5 children who is expecting to lose 70% of CB. She is practically a single parent anyway as DH works late all the time. She can't work full time herself (does a little self employed work) due to ill health. She pointed out that CB goes directly to the mother and that she uses it for children's clothes, school trips etc. It is already vastly unfair that she can't use her personal allowance against her husband's salary.
I personally don't earn enough to pay tax - but DH earns less than the £50 grand limit so we aren't caught out here.

There are good reasons why couples cannot share tax allowances, rlp. Explained by cleverer bods than I upthread.

Very important that you cannot share allowances.

I would also like the immoral tax evasions of working spouses putting their savings into the names of their non working spouses too. HMRC ought to get on to that. They lose masses of tax that way every year.

Xenia makes some interesting points, and I'd like to build on that by saying that half the problem is independent taxation set against household benefits, which traps many women in non careers, as they consider overall household income as more of a factor in their career plans than their own independent lifelong earning power. If we want true feminism benefits need to be independent too. Spouses are not chattels.

Absolutely but I would be wanting to move away from housing benefit and tax credits for workers as they interfere in free markets and keep wages down - they are a state subsidy which means employers pay workers less.

It's an absolute scandal that working adults need housing benefit.