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 don't knowif they are deductibles as I haven't needed them, but I would think they would be since they are a salary sacrifice scheme - you give up the amount before you pay tax or NI.....

Agreed by - you get the vouchers in return for an agreed reduction to your gross salary. That's why upping pension contribs ( if also done by way of sal sac) and taking up as many vouchers as possible will be able to be used by some employees to reduce their gross salary down to hopefully below the 50k level either pre or post the other deductibles

Sorry Xenia, I hadn't realised that all single mothers live in Central London!!!! Seriously?????!!! With the greatest respect Xenia, you're not really representative of lone parents / single mother are you, earning a 6 figure salary.

I can't afford to live in Central London.

@boggler - I could have written your post word for word - that's exactly what I was going to say!

LIVID

These child benefit change are potentially illegal - see recent Daily Telegraph article: www.telegraph.co.uk/news/politics/conservative/9641766/Child-benefit-cuts-may-be-illegal.html

Shocking how the 50p top rate of tax for rich people was reduced but now they're removng middle income earners child benefit. The Minister in charge, David Gauke, today says people should stop moaning and live with it! www.dailymail.co.uk/news/article-2226622/Child-benefit-protesters-fiscal-nimbys-says-Tory-minister-demands-people-live-means.html

They said trebling student fees may have been illegal, remember Scottish and Welsh students don't pay them, and there were legal challenges but, they got away with that one and they will this one.

Nick Clegg:

?I perfectly understand why people who don?t feel wealthy ? who may not feel wealthy at all given all the costs they face today ? don?t like this change,? he said.

?But I will ask them just to reflect for a minute that there are many, many others, the vast majority of people in this country who are on much lower incomes than them, who are also having to make sacrifices.?

Fair enough Mr Clegg, but why are the Govt not asking households with equivalent incomes who do not have children to make equivalent scarifices? We are going to see a 9 percent fall in our take home income from Jan. Childless couples or singles with the same income lose nothing.

PS Mr Clegg if you're reading this, I voted Lib Dem and will never ever vote Lib Dem again. Pairing up with the tories, tuition fees and now supporting this sort of badly implemented policy. Your party's done a fantastic job of committing suicide, eh?!

Declutterbug - are you suggesting that people with no children should have a tax rise of 9% ? I guess that would be quite an encouragement to have kids! Or is the suggestion that everyone in the country should have a tax rise of 9% and that people should then receive a cash payment per child?

Not quite seing the 'Childless couples or singles with the same income losing nothing'. That's because they are not receiving handouts from the state. I was a bit sympathetic to this cut at first but now I am totally in favour. Especially when anyone earning £9,000 or so per year pays tax. To fund somebody earning £50,000 and above to have children. How on earth can this be in any way fair.

No Grendel, just suggesting if the driver is cuts then a small percentage income tax increase is fairer than cuts only affecting families. As it is the govt have just cut the top rate of tax

Vivienne your hypothetical situation is nonsense. Someone on 9k is not likely to be a net contributor.

If they pay tax then they are a contributor. Surely.

To find out if someone's a net contributor or not you need to work out how much tax they pay and then deduct from it the benefits etc they receive from the state. A positive number means they are a contributor (pay more in tax than they get back), a negative is the opposite. Fairly simple to understand

Totally unfair. We have friends who earn loads more than us on a combined salary but individually earn within the limit so will not be affected and are also able to have grandparents close by to help out. We haven't had a night out in years as it would cost too much but it was our choice to go where the work was and when we still couldn't get a job near family it was our choice to start one of our own and cope. We keep being penialised because we manage to do without if necessary and live within our means. But when the government keep taking away what we have it's like again being told we have to ignore the original contract and accept the new one with fewer rewards hence everything keeps rising except the income which keeps shrinking. The government seem intent in causing yet more worry and friction amongst the people. We all know people who have a lovely home and car and go on holidays without earning a penny. Being on benefits lowers peoples self esteem - when are they gong to realise? Going out to a rubbish job and working long hours where they can sack you at any time does very little for a persons well-being either. Totally unfair to always be taking money from those work so hard and be penealised for doing so. You try to convince your kids that they really need to get a good education so they can hopefully get a good job while trying to shield them from reality in the hope it will change by the time they are allowed to leave school and try and find work. Really makes you want to give up... might as well get a divorce.

nope we don't all know people like that. i don't know anyone who has a lovely home, car and goes on holiday without earning a penny. well there is the queen i guess.

stop the lies - it is irresponsible and ridiculous.

might as well get a divorce? lol because you got married for CB? ffs. i should try getting a job first.

I read an article in the Mail today (I know, I know) about a woman bemoaning the loss of her CB. She and her husband being home over 7k a month and she refers to the CB as "a measly amount" but feels she is entitled to it. Would just love to hear her views on a single mother with three children in a one bedroom flat asking for a house move....no doubt she would refer to her as "entitled" too.

They never have any money left at the end of the month (admittedly they DO have two children in private school) and I was ldt wondering g how she would cope on MY income per month where my CB makes a real difference to us.

So they are saying if Jane in the office is UK resident for tax she gets CB and then has it clawed back on her tax return as I will but Marie from France in the same office who gets UK child benefit as she lives here with her child keeps it all as French tax authorities do not take it back from her and that that difference is discriminatory?

So would you be taking people's health care into net contributer calculations. And children's education and so on. From a simplistic viewpoint I cannot see why somebody should pay tax on a very low income to supplement people on £50,000 plus per year. I think it's a good decision.

Forget arguments about whether something is 'fair' or not. The reason this benefit still exists is because successive governments have argued getting rid of CB would be the first step towards dismantling the entire welfare state in all its glory. This is because unless all people, wealthy and impoverished, receive something out of the welfare state then it will not be universally supported and it will wither and die, and with it certain groups of citizens (as in the US, where infant mortality rates are rising, amongst other things).

Instead of tackling the Government on this basis, they have effectively managed to divide and rule us with countless people both resenting higher paid workers and arguing they need the money for various things.

The devil is not in the detail in this case. This is not about individual families, it's about whether we want to be an inclusive European-type country or whether we want a hard nosed marketised model like the US, where the individual counts for very little.

I for one do not want a US type model and will fight pretty much to the death to avoid this happening on my doorstep.

Choose the right path and write to your MP with these arguments unless you want to have sleepless nights in the future.

Yes, I feel less included now that the one benefit I ever got is going.

However I feel very included in the NHS and in fact most people use it in the UK and often its care is better than private so we still buy into it. When the better off do not use a state provided system it does worse or so the argument goes.

However I don't really mind as I am an individualist free market libertarian who thinks we should all have a lot more personal responsibility and a lot fewer assumptions that the state will provide and I expect I as a single mother can manage without the child benefit. I have never however felt it was so spare I could save it.

I'm in a similar position in that a lot of the services we have used as a family are private, but when it comes to things like occupational therapy for disabled children, there are no private services and you're always glad the NHS is there. If that goes there will come a point where a lot of higher earners will start resenting shelling out, I think.

That is the psychological issue and the same with high tax rates - we got up to 99% taxes in the 1970s as very top rate and even my father working for the NHS paid 65% top rate of tax with 15% on top of that on savings interest. When that happens and even our upper rates of tax inthe UK are 4th highest in Europe without the very cheap childcare the high tax other states tend to provide, you lose your feeling of being part of it all. It then becomes worthwhile legally to reduce tax, put savings in a spouse's name or move abroad or use all lawful tax breaks. If instead you feel the rates and system are about fair you just pay up and get on with life. We are over the tipping point now and the sad thing for the poor is when the rich feel like this there is much less for the poor.

When tax rates came down to 40% under Nigel Lawson the tax take went up even if the poor resented the lowering of rates for the rich.

I know I lost my argument at the end swallowedfly it is just the sheer frustration of working out what you can afford and how much you need to keep spare because every year things rise and income gets less in comparison. I may not be able to articulate myself properly because every penny counts and when we calculate CB in our income it does make a difference to what the two dc we have get each month. I don't expect the state to fund our children but when they take away what they have it hurts - as I said every penny counts and it's not just CB that is being taken away but that a totally different story. Unfortunately in our area I can hardly walk to the shops which ever route I take without passing at least 3 homes where I know for sure that they are surviving on benefits and have not worked for at least 10 years. Just another fact that makes you think why do I bother - but I know why I bother and why we insist that our dc do their very best to improve their lot.