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.

i got a mortgage when i was on 19k starting out in a profession - i was lent 100% of just over 5 times my salary as a single woman.

obviously i wouldn't get that now the banks have stopped lending that way but very many people are paying mortgages they got into before the market crash and recession that they have managed to cling onto. tons of people will be on 30k household incomes or less and paying mortgages. i'm afraid it just shows more naivety on the part of high earners that they don't realise this.

apart from which very often rent is more expensive than a mortgage anyway - i certainly pay considerably more now that i am renting than i did on my mortgage.

Not sure where you live, but yes you can easily get a mortgage on £30k in some parts of the country - did you know, in some parts of the country you can actually buy a whole house for £120K, flats for less than £100k and bedsits for less than the wage needed for child benefits to be cut.....

In some parts of this country £60k is a fortune. You know the state pension provides you with a guaranteed £140 a week (plus council tax relief) - some people actually live on that....

Mandy, I am self employed and never had a childcare voucher in my life. We paid the cost of childcare out of taxed income always even when I was only 22 years old. Someone says those who are employed (many higher rate people are not so we get no sick pay pension paid holiday maternity pay etc) get £143 a week child care vouchers where employers provide them tax free. That does not pay for much child care. You are probably looking at over £20k + full time out of taxed income in London certainly for us when we had 3 children under 5 and we both worked full time 5+ days a week.

ByTheWay1 It's that kind of sneering resentment and ill-placed envy that allows the government to shaft every single one of us.

I am not a higher rate taxpayer by the way - far from it. I just know that by taking away the universality of child benefit, the government are paving the way to make it a benefit only for the very poorest families. £60k is a decent income now - but it won't be in a few years and I can pretty much guarantee that if this government have their way the threshold will not change.

I am neither resentful nor envious - we may or may not lose CB, we are on the edge - sometimes DH earns over £50k, sometimes not.....

The government will do what it has been mandated to do by the electorate, or if they subsequently do something the majority of the electorate do not like, they will be removed from power at the next election...

This country needs to move away from welfare dependency, this is one of the "easy" benefits to cut as it is generally seen that people earning over £60k do not "need" it (as opposed to it making life a bit easier)... we are talking less than 10% of families in this country actually being affected (we may or may not be one of them).

No one ever wants to lose something they have come to rely on, people tend to spend to their income, so they could implement it differently, but I don't actually see every change as the government "shafting us" - merely trying to get us closer to balancing the books... what I DO hope it will do is GET PEOPLE VOTING next time.....

you're right bytheway - this is exactly what those who voted tory mandated the government to do. the sad fact is a lot of naive numpties thought the tories were about 'people like them' who 'do the right thing' ya da ya da ya da and thus voted for them only to find, quelle surprise, that they were small fry the tories didn't give a toss about. the 'us' is a very broad reaching category, the 'them' in this case is a minute few. the foolish aspirational 'middle classes' will hopefully realise the reality of where they stand next time they vote.

if you have to work to survive you are working class. the club the tories work for is not you.

Far be it from me to defend Conservative voters, but scrapping universal child benefit was not in their manifesto. Besides, this government do not have much of a mandate at all imo.

And yes, I couldn't agree more about particular sectors of the middle class discovering that they are small fry. I just don't like some of the schadenfreude.

(posted too soon)

I don't think this was an easy benefit to do away with tbh. The universality of child benefit was once upon a time valued by pretty much everyone - if anything because it was so blinking cheap to administer.

Considering the way this government are dismantling the NHS with such frightening ease however, it's not suprising they're getting away with this.

There are other people affected much harder since this coalition came in power, it's already happened, than wealthy families losing a relatively small benefit, that they can easily afford to lose. 60K is a massive income to me and lots of other people.

do the tory party really need a manifesto? is it not obvious by now?

they will:
-sell off public services, institutions and property for virtually nothing (and there will be no accounting for where the money raised went or what was invested in to replace what was sold)
-try to weaken employee rights, drive down pay, benefits and protection for workers
-create tax breaks and loopholes for the rich (as well as handing over forementioned public services, property etc to them on a silver platter)
-target single parents, the sick, disabled and elderly for sanctioning with increased poverty.

they've never made any secret of what they are or what they are about and they've always done the same things. why it would be a surprise to anyone i don't know.

£50k is £216 a week after tax and childcare and mortgage for a single mother. The non working poor are subsidised so that their rent is paid and of course they have no childcare cost and no travel cost to work and someone on state benefits is not too much worse off than the single mother on £50k. I don't think the poor realise.

xenia No I didn't realise. That is pretty shocking actually. However a single mother on benefits with two children has roughly £155 a week and most have to top up on housing as councils will only pay a certain amount, (not enough for a decent 2 bed terrace in my area) so are still at least £100 a week better off which is a big difference when every penny counts.

I think you have changed my mind on this one, if there is to be a limit on income it needs to be implemented fairly, the threshold higher and tbh like many have said, it is going to cost more to implement than what is paid out so why bother in the first place. The Government needs to do a U turn and fast!

Sorry read that as £260 a week in my befuddled state

I did rough calculations the other day, £50ker gets 35 700 net after tax. Benefits c.aimants think she keeps the £50k. INstead she pays £14,300 tax and NI.

Then she pays a mortgage say 90% loan on £150k outer London flat and then childcare one nursery place for one chilkd fulll time and then her transport into London to work.

That leaves her £216 a week for food clothes etc and her council tax and her work clothes.

I agree the benefits claimant is a bit worse off but she doesn't have prescription charges to pay and gets council tax benefit. I had the benefits claimant on £170 net including council tax benefit child tax credit (and of course all her housing paid for - although she may have to top that up - if she feels she is entitled to rent without sharing with others etc).

My piont was the £50k full time working single mother does not end up with much more than the one who c hooses never to do a day's work in her life EXCEPT our woman on £50k might in due course earn even more ands econdly once her child is at school she has no child care costs or not as many so she will certainly be better of then.

I just want people to know that your £50k mother does not really have that much more net income than one on benefits.

Yes I do see but at least the house she lives in will one day be hers and she has the satisfaction of knowing she is a good role model for her children.

Consider me a convert on this topic.

I have 4 children and as a result we have to work extremely hard to keep our heads above the water. My husband spent 5 years travelling every week for work in Europe while I handled all the kids and worked in a home working job at night. It was tough. He has finally landed a job at home. He earns well.

He earns well because of the sacrifices we have made. We have to live away from family help - no help with childcare means to earn extra money we have to work back to back - we never see each other. He works very long hours and has a very long commute with high fuel costs. He travels for work leaving me at home juggling my work and the kids. We will not even get maintenance grants for my clever eldest child at university next year - we will struggle to help him - he worked very hard and is predicted 2 A*s and 2 As - we've even considered if he should go at all.

For all this effort and work we might also lose child benefit. We would be better off not trying and claiming everything.

The cut in benefit only takes into account EARNING power - it says nothing about whether you have your mortgage paid off or money in the bank from inheritance. Some parents may be able to work in a 9 to 5 job earning less than my husband and get child benefit even if they have thousands in the bank.

The hardest times to cope with children are when they are babies. If child benefit is to be cut do it AFTER THE CHILDREN ARE 5 YEARS OLD. Women have many more options to go out to work then as childcare is not as crippling and we are not so vulnerable.

trust me a single mum on benefits does not have £170pw in her pocket after rent and council tax. i've been that mum. with her tax credit, child benefit and income support she'll have more like £125. she also will not have the investment of paying off a mortgage that will see her owning her home outright or selling it and having a large sum of capital in her old age.

and of course there is a huge difference between £125 and £216pw - look at that as a percentage ffs. one barely covers food, nappies, electric and gas and water and that''s your lot. to be honest thinking £90 a week difference is 'about the same' says a lot about how much money you have. £90 a week more is a fortune when you're living on the poverty line.

i'd also dispute the £216 figure. most single working mums are not living in london and buying £175k flats. i'm only an hour away from london and you can buy a 4 bed house for that sum.

however i'm in complete agreement that the single mother shouldn't lose her child benefit.

we're also completely ignoring maintenance here. the 50k earner is receiving maintenance likely from someone around the same or higher income level than her. the benefit claimant is receiving from someone on low pay or benefits in likelihood and that will massively increase the gap once again.

We will lose ours. In principle this is fair, we do not need it and the benefit system is not set up for households like ours. I am a sahm but am retraining for a different career now my DDs are older. I will never go back to work full time though and my DH works hard so we can have a great lifestyle, I do not have to work at all. It is fair that we lose the child benefit, don't get me wrong it was a handy top up and I use it as petrol money but that is not what it should be for.

It is very unfair that duel income families earning over the 50K between them can still claim child benefit. That makes it a bit of a bitter pill and not very fair at all! I assume that the admin involved to make it fairer would cost more than it is worth to make it fair!

As far as I can see, I'm in the position of losing my right to be my children's primary carer, and I'm really concerned. Where can I ask for help?

My husband and I are getting divorced and we have 50% residency. Therefore the person with Child Benefit (me) is considered to be the 'resident parent'.

HOWEVER, I want to move in with my new partner. He is a higher-rate tax payer. What do I do? If I STOP claiming Child Benefit, am I still the resident parent? What is to stop my ex-husband claiming the Child Benefit then, and declaring himself to be the Resident Parent, and then claiming 15% of my income?

If I KEEP claiming it, my new partner will have it deducted from his earnings! How is that right?

What can I do? I'm really worried! :(

I didn't realise the amount that HR earners were allowed to claim was £143 - this is a change apparently from April 2011 - before then everyone was allowed to claim the same amount of vouchers. That was obviously advantageous for HR earners - saving more of their childcare costs than BR payers - hence why the government cut the amount HR earners could have in vouchers to even things out.

So its not a case Xenia that HR earners always pay more / end up supporting the rest of society, quite the opposite in this case until April 2011!!

Is it £50k before or after tax?

It is £50k before tax but net of deductibles - like pension etc - so it is £50k of TAXABLE income.

Many many workers are not eligible for any kind of childcare voucher or help. You have to be an employee. Many of us are self employed.

(Going back to my example yes the single mother may own her £170k or £150k place out right but only if she has a repayment mortgage and only if it does not reduce in value - she also risks owing more than she borrowed; The benefits calculator I used got the single mother of one on £170 a week. My single mother on £50k a year has £216 before food and work clothes and other things you need to pay to work, probably some lunches out. I just don't want benefits claimants to think these single mothers are living a wild life when their net income is not too much more than the cliamant and yet they are probably commuting 2 hours a day into Central London and working long days; don't assume she gets maintenance. iIam a single mother of 5 and get none. )

Thank you! Do you know if childcare vouchers are considered a deductable?