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 understand still claiming it, then paying it all back on tax returns? That seems ridiculous, am i missing something on that?

My DH salary can vary up tp £60k so thats why I will still claim it - they can claw it back through his tax - 2012 - 2013 he may only earn £49K.

People salaries may vary if they are just on the threshold so that's why people will still claim it.

Posted on the other thread.

It's completely and utterly unfair. I want somebody from the Condems to justify exactly why families on double what we earn are keeping theirs whilst we lose it.

What is the justification or point?

Oh and rest assured dp and I will be doing everything in our power to keep hold of it.Currently doing an IT salary sacrifice(and pension) thus along with many others simply taking the much needed cash out of the economy and our tight family budget away from the dc who need it most which helps nobody.

So add pointless to unfair!

Will be cutting down on overtime too,not great for Dp's company either but don't see why he should work even more hours for zero reward.

I am utterly confused. We have not had a letter but it appears we need to opt out by tomorrow pm if we are going to but have had no guidance whatsoever.

My husband works and I'm a sahm to 3 children. We will lose the benefit. I am confused about what it means for me as regards to my pension entitlement. It appears I have built up entitlement to the state pension as I was formerly entitled to receive child benefit but I can't find anywhere that explains what happens now.

As I (my children) won't receive CB does it mean that I no longer receive credits towards my state pension. So does that mean because I'm staying at home to look after my 3 children I will not receive a full state pension?

If I split from my husband in the future he has a work pension to see him through his old age. What do I have? I plan to return to work when my youngest is school age but currently any wages would be totally wiped out by childcare costs. Why should I work to pay someone else to raise my children???

The message being given by the government is that a sahm mum is not a valid role and that we should all be paying other people to look after our kids, then on the other hand we are being told that parents aren't taking responsibility for their children.

If anyone knows the answer to the pension question please let me know...

pleasestoptalking I am in the same position. I'm now reading that with 4 children this will mean DH could be paying 65% tax (I do not understand this I admit) if I claim continue to claim it, which I think I will until I am given confirmation that my pension is safe for what that will be worth.

This government hates the working middle classes and hates women. There is absolutely no sense or justice in withdrawing CB from those when one parent earns above 50k, but not if both parents earn it . I know shiny black grape said it is too late for a protest, but I really wish this was something MNHQ could get behind, and that we could demonstrate our anger in an organised protest at Downing St. Anyone up for it?

Wanting to keep it has pushed me to significantly increase my pension contribution, which I really needed to do anyway. That said, I am only allowed to do it once a year in December so I will probably owe tax on CB for this year and will now have to file self- assessment tax returns instead of PAYE.

This has the potential to be the condemns 10% tax fiasco. Wait until next year when all the extra tax returns are filed and HMRC loses the plot

pleasestoptalking - I too query my/everyones future pension status

pofacedalways I posted on the other thread about CB that when this was announced in the March budget last year I asked MNHQ if they would consider a petition or to lobby some MP's but was told this is not something they would do.
Maybe if enough of us ask, their position may change?

With reference to your Pension Credits I was told by the HMRC that even if you chose not to receive the money, your entitlement to CB remains intact because you have eligible children and therefore as long as they have your children on record you will continue to get NI credits until your youngest one reaches their 12th birthday.
So even for people who still get CB and don't have to pay it back, their pension credits will also end when their youngest is 12.

I have a question. My husband earns above the cutoff and I receive CB.

What happens if I refuse to tell him whether or not I receive it? HMRC have already told him that they can't tell him if I do because of confidentiality. But if he doesn't know and they won't tell him, and I don't tell him - what then?

commandershepard I guess it would be considered as fraud / tax evasion and you could be fined or worse still prosecuted. It does beg the question of how will they police this and how much will it cost them to chase up people who are not honest about their earnings and continue to claim CB when they are not entitled to it? Such a mess waiting to happen!

CommanderShepard, that is a very good point and one which I hope many couples will have the balls to use. I read an article somewhere the other day, where a lady rang HMRC and asked them exactly that question. She asked if her husband would be prosecuted. They said they couldn't tell her as it was a compliance issue!! I mean, think about it, there's absolutely no way they could prosecute either the mother or the father without breaching tax confidentiality rules and that is illegal. I bet as soon as someone dares to go down this route, they will be forced to ditch the policy

We as a family are one of the hardest hit by this, income just over 60K, 4 DC, me a SAHM.

It equates to a pay cut off 3K a year (or the equivalent of 5K pre tax) who can afford a 5K pay cut? I'm livid that my neighbours could have a household income of 100K, have one child and still keep it all, it's just not fair.

Its do sneaky though, I cannot talk to anyone about it in real life as you get told "well it's your fault for earning too much" no sympathy from anyone who earns less, the ones on over 100k+ don't need it anyway, it just that little squeezed band in the middle, not enough of them to complain and if they do they get told to bugger off they earn too much.

Next it will be whittled down to 45K, then 40k etc etc until its swallowed up by universal credit, again each little band won't complain.

It's so complicated and not thought through, not based on household income, still paid, clawed back through the tax system forcing a load of people to do a SA for the first time, legally I don't need to tell DP I claim it, he doesn't need to tell me what he earns, could it be anymore complicated if they tried.

Much fairer would have been a cap at 2 children, so £20 for one child, £40 a week for two +. Nice and simple to administer.

We are definitely up for a protest, and to try and urge some kind of petition - people power on other online petitions has produced good results and a change in policy ( in some rare cases!)...

We are in the fortunate position of earning over the threshold - I have been a voluntary sahm for 16 years, have never asked for anything from the state for this time, other than child benefit which I have always used for the children - dinner money, clothes, clubs etc. I understood that the receipt of child benefit would help with my state pension, as my work pension only accrued over 12 years, when I left to have my first child - we are very reluctant to stop claiming, because when this mess turns into a fiasco, how easy will it be to then go back to claiming it. There are huge privacy and confidentiality issues at stake here, and our value as sahms is also questionned. Parents like us have always been a hidden statistic. What would happen if people who had'hitherto 'just got by' - suddenly all started claiming support and benefits, this would skew the govt's employment stats etc - we have all taken this lying down, thinking that with usual govt incompetence it wouldn't be a runner. It is, and some lives are going to be ruined by it...

I understand sweetkitty, my DH earns nearly 60k. We have 3 DC and I am a SAHM. This has pissed me off for 2 years now and still they're going ahead with it. I honestly thought they'd see sense in the end. I know what you mean about being unable to talk about it in real life. If you dare to mention it to anyone, even in my own family, I get told that we have nothing to complain about and that the government has to cut costs. It makes me want to wear a badge stating that I am no longer in receipt of child benefit.

Totally agree with you sweetkitty - there are so many better & fairer ways they could have done this - it beggars belief that they didn't. We all know it's unfair, they know we know it's unfair and yet they have just barreled ahead with it regardless. Totally terrifying that these are the "brains" running our country

I still don't know what to do and need to decide by tomorrow night!

DH earns over the £60k and even with childcare vouchers and pension contributions, I don't think it would bring it down to below £60k therefore common sense says just to stop receiving it. I do work so it isn't going to affect my NI/pension.

However, part of me thinks that it is all going to go tits-up soon and they will have to reinstate it and how easy is it to start claiming it again?? Is it easier to continue getting it, saving it and then paying back next year with the added complication of a SA form for DH.

And the total unfairness of this is just ridiculous - if it was joint income over £60k, I would take it on the chin but as it isn't, why should we take it lying down??

I'm also livid by a few comments from my friends whose DHs are self employed and earn much more than 60K "oh we'll just get the accountant to be more creative" "I already "work" for my DH, he pays me a salary for doing nothing but it saves paying tax" "my DH only pays minimum wage to himself the rest is "invested" back into the company.

There will be ways people can get Roy d this, usually the wealthier ones not on PAYE. In a few years there will be stories of millionaires wives still claiming CB via some tax loop just like they don't pay enough tax legally just now.

Just why are people with 4 children earning over £60k a year expecting those of us on more modest incomes to subsidise them? When times are hard surely these are just teh people who can manage with a bit less - this is a netpay of just about £3,500 per month. Should be income tax paid by care workers on less than £15k be used for this purpose when they are struggling with car insurance, increased fuel and rent charges and couldn't even afford to have one child? DH and I have brought up 2 children and lived in what we have felt to be comparative affluence on a joint income of less than £50kpa. ( including some private education). Some of the posts indicate there are a lot of the "me,me,me" generation out there. Of course it is unfiar that the £50/60k thing applies to one income, but what do you want them to do - make it £50/60 joint income?

Err yes Higgel- exactly that.If it's so easy for families on 50-60k to ate the hit every single family on 50-60k should face exactly the same.Why on earth not?

Touche polkadot

And Higgel why then exactly should the tax payer being subsidising those on more modest incomes with tax credits.I'm all for my tax helping those without a job but sorry why exactly should we be subsidising those in work?

Ceebeegeebies, if you have the details of your DH's pension contributions and childcare vouchers, you can stick them into this calculator to see exactly what his adjusted income will be.
www.gov.uk/child-benefit-tax-calculator