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 think hand wringing is what the Government wants us to do, whereas frankly we should be outside Downing Street with pitchforks refusing to let this go through, as an hommage to Barbara Castle.

I am a single parent. Get nothing from ex as he made himself voluntarily unemployed and am challenging this on grounds of indirect sec discrimination as 92 per cent of lone parents are female. I may or may not lose depending upon bonus that will take me over the threshold but I receive no other benefits and have a lower income than two parents averaging 28k each and pay more tax than the combined. It would pay me to go part-time and top up with tax credits but then I will be criticized for being a single mother scroungers. The system of one income only and the simple way to help single parents is that those who can prove through a single person council tax subsidy should keep the child benefit up to 98k. No means testing required. Single parents income will always be lower as they only have one personal allowance and childcare costs.

The system at the moment is fair except for one thing. Parents who have twins or multiple births do not get the same amount as the first child. Therefore I had twins as my daughter came out first she was entitled to the full amount, 2 minutes later my son was born and he gets a lesser amount as he is classed as the second child. It is an impossibility for the surgeon to pull out two babies at once from your womb. Unfortunately no one ever addresses this when talking about child benefit legislation.

Thanks Xenia for pointing out that a single woman on 50k is not earning much more than someone on benefits. It is true. I wonder why I do it sometimes . My ex told me just to give up my job so that he did not feel bad about giving up his but what a role model for our kids if I did the same and yes my house will be mine but not until after I retire and assuming I don't lose my job. I also miss out on attending school events and having any time to myself but for me if we all did the same where would the country be then and the tax I am paying keeps everything going.

Redtabby - I also have twins - but I don't understand why there should be any special treatment as far as CB goes just because we had two babies very close together, rather than a couple of years apart?

redtabby it's about number of children, not discriminating against your ds who happened to be born after your dd.
If you have one child, you get x amount. All subsequent children, regardless of when they are born, qualify for y amount.
Are you saying that with twins you should get double the higher sum?

I have been thinking about the lady with three kids who has three kids and earns a family income of 100k. She has been considered greedy but taking a different view - if those three kids went on to earn the same and a child's potentially earnings have been shown to be based on father's income their earnings and tax payable would massively dwarf the previous child benefit and really help to drive the economy. Just another way of looking at it but the more children that woman has theoretically the more the country would benefit in the longer term.

Yes, as I've said my mid 20s daughters who never used a state school place ever pay loads of tax already.

However we don't need more children. There are a large number of birthds of women from Pakistan and Nigeria in the UK at present and we have had lots of young hard working immigrants so we seem to have solved the problem of not enough babies and we are a pretty crowded land so we probably do not want to encourage loads of babies to be born. We have been in the middle of ababy boom with a shortage of state primary school places.

As I and losingt says a single mother sole supporting on £50k has not that much more money if she is paying for a nursery place (even less if more than 1 - we had 3 children under 5 at one time and both worked full time and then had twins) than a woman on benefits. The reason I would say carry on working is that benefits might disappear if we cannot afford them or reduce, secondly in terms of status it is generally better to work, thirdly it is a good example to chidlren, fourthly and perhaps most importantly if you are in work you can get more work and promotions and remember when peopleare my age (50) when children start to disappear you have no childcare so all that childcare cost disappears, in fact you have young helpers at home rather than babies, and you have 20 years to work and can earn a lot whereas single mother who has never had a job has 20 years in poverty. Worth working for lots of reasons.

I also hope IDS in Government is really trying hard to make work pay - that is our trend. We are not on a trend with either Labour or the Tories to make benefits better and make work not pay. Complete opposite.

How can everyone say that £50,000 is a lot of money to bring up a family. The big secret is that lower paid families are topped up quite a bit. According to a benefits calculator (turn2us) and using my own family (4 kids) as an example lets see - who is better off?

Husband earning £50,000 full time, Wife earns 8,000 part time (>16hrs at present) Childcare £140 a week. After tax and national insurance they get £7953.55 and £35782.05. TOTAL about £43,000. They get £0 in tax credits - plus £0 child benefit. TOTAL: 0. OVERALL TOTAL about £43,000. Grant child at uni next year: ZERO.: UNTAXED grant.

Husband earning £20,000 full time, Wife earns 8,000 part time (>16hrs at present) Childcare £140 a week. After tax and national insurance they get £7953.55 and £16134.55. TOTAL about £24,000. They get £12,224.25 in tax credits -plus £3,154.64 child benefit. TOTAL about: £15,000. OVERALL TOTAL about £39,000. Grant for child at uni next year: £2,416 untaxed.

Surprising isn't it. Should mu husband work part time? Should I leave him? What a couple penalty!

And in my single mother on £50k paying for a full time nursery place she is not much better off than a single mother on benefits not working if neither has anything from the children's father (as I don't).

Thsi is the dilemma all welfare states have. If you support the unwaged or working part time/low waged to levels which are too high then work doesn't pay. If you reduce it hugely so perhaps they sleep in dormitories with food provided by voucher and make them do work fare or move to parts of the country with cheap housing or jobs people think that is too tough.

IAD in Government is trying to make full time work pay with the new universal benefit which is coming outb ut I will believe it when I see it. My only advice is that we did work hard and after childcare costs one of us for a loss for a while but with promotions it all got better. You have no chance of promotions on benefits so longer term people who work tend to do better and childcare disappears in due course and then you are even better off than the person on benefits.

(By the way £50k I think you keep some of child benefit. It is over £60k you lose it all)

no it isn't. it's the problem when you allow pay to fall behind the cost of living so dramatically and you therefore have to subsidise pay for people to be able to survive.

it's the problem when you allow a few at the top to take multimillion pound profits without distributing it down through society to higher pay for all.

and how on earth would someone working part time and earning 8k need £140 of childcare?

My take on that would be as soon as you intervene in a free market to prop up negotiated wages with a minimum wage and housing benefit and tax credits things all fall down (as we can see they have(). If you don't provide that market interference then instead wages go higher and find their own level and the whole nation does better. On this the right and left can agree. It is just the Labour and Tory parties in the middle with hardly a difference between them who are our only choice of candidates who have a different view.

rubbish. this is a point in capitalism where the books don't balance anymore because the top have squeezed and squeezed it into a meltdown. if people don't have enough money they can't spend what you want them to. instead of putting pay up they then squeezed by encouraging everyone to get into debt so they could make money on lending and on people spending the borrowed money. they squeezed that too far clearly and look at the results. now they can't lend it to spend and they won't hand down some of those profits as they are still greedily trying to squeeze out more. so they'll cut public services and sell off whatever is left to squeeze a bit more out.

it doesn't work. it is an inverted pyramid - it can't stand up.

but yeah, right it's those poor people at the bottom who've ruined everything

We kept interest rates artificially high. We did not allow banks to fail. We intervened in the market with minimum wages and housing benefits and tax credits for those in work and we created a socialist system which rewards idleness.

If the state did not top up wages they would not find workers unless pay went up. Instead we have a system where a single mother working full time paying for child care for under 5s full time on £50k is in a similar financial position to one on benefits. We have made work not pay.

They always have. We havent' had the minimum wage for most of my life time and in the 1970s we had 18%, 20% and 22% infliation over 3 years. There was no minimum wage then at all. Free markets work best.

there were also strong unions and plenty of manual work. my dad talks of how you could get annoyed with your boss and walk out on monday and be in a new job by wednesday maybe even with better pay.

different times.

and no matter how many times you say a single mother on 50k and a single mum on benefits are in roughly the same financial boat it remains untrue.

I don't agree.

Janice earns £50k a year in London gross. She pays loads of tax to support her never had a job in her life single mother sister who lives on benefits.

That massive 50k a year is after tax only £688 a week after tax. Let us assume she has no student loan but she probably will have if she's on that pay.
Nursery for one child full time 8 - 6 5 days a week

Let us plonk her in the South East £250 a week 8 - 6pm nursery.
She certainly is unlikely to live in Wales if she's on £50k at age 30.

That leaves her £438 of her net pay.
We will have her travel in from Watford to London I think say £10 a day so that's £50 a week.
Now she has £388 a week.

So she lives in Watford with one child and no partner. Let us stick her in a flat on a 90% mortgage at 5% repayment £200,000 x 90% = £1350 repayments pcm = 311 a month.

I don't think by the time she's bought some food she's going to be able to manage very well. She might have to give up work or find a rich husband.

Ah she's much worse off than benefits claimants actually under these sums compared to my ones last time. I think I had her in a £150k flat that time. She is going to share her bed room with her baby I think and she wont' get the council tax benefit her idle twin gets who doesn't work at all. If we had her in a much cheaper flat say £150,000 then she would be better although of course if she had a second child and still used a day nursery she'd really be trouble. Best she can do is keep taking the pill or find god and give up sex or stop the pill and get pregnant with a rich man who will marry her.

I've put her benefits twin through entitled to. She gets

£62 a week tax credits
£71 income support and all her council tax repaid

She gets £219 a week rent paid - new upper cap - 2 bed rooms.
She gets child benefit same as the one in work of £20.30 a week.

So after housing costs the idle one and ignoring council tax benefit the idle one has £133 a week for food etc and I suspect her hard working twin on £50k a year is worse off.

i don't think there was as many single parents around in the 70s either.Obviously there were some but may have been divorced rather than never married. Most people tended to get married before having children and being in a reasonable financial position.

My dad wouldn't let my mum have a baby until they could afford a house in the 60's.

some people don't seem to think along these lines anymore.because the state will step in.

Silencing strange comment. Are you trying to infer that all single mothers now are reckless never married and want the state to look after them?

In the 70s more women put up with violent husbands, and Jimmy Saville went around abusing children supposedly. Rose colored specs me thinks.