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.

sobal I think she meant to say "ideal" actually

we got three times the child benefit when we live in Germany

Soba we have a banger and no holidays too.People losing CB are not all wealthy yummy mummies.

I had to give up work as I had 3 babies(twins)in 15 months so we couldn't afford child care.I worked my but off too as Dp was at work all hours.Now I can go back to work I'm going to have to start from scratch.

Why the fuck were the Osbournes claiming child benefit in the first place? Perhaps if the loaded Eton-ites had more moral fibre they wouldn't have grabbed at the benefit in the first place and there would be more in the coffers to go round. Did it not occur to them that they didn't need it so shouldn't claim it???

Oh and Soba there are very few jobs around if you're starting from scratch.Believe you me if I know what I know now I'd have worked for zero the past few years and kept my career.

So his 'we're all in this together' piece in the Daily Fail doesn't wash. Sorry George, you complete and utter muppet.

I have just read the comments on the Daily Mail website and they are really irritating me. An income of 60K does not equal over £1000 a week disposable income as anyone earning 60K is paying higher rate tax. They are also not entitled to help with child care costs, tax credits etc.

The other thing that irritates me is George Osborne saying this will affect the wealthiest 15% (I think) of families. This is also untrue as there may be many people affected by the change who are single earner families with a stay at home parent where 60k is the total household income and many families with two lower incomes that equate to over 60K who will still receive child benefit. The latter have not been included in the 15% figure.

Does anyone else feel angry at the distortion of the facts?

...yes starting from scratch to find work is hard so the moral is never never give up full time work as a woman. It is not worth the risks.

I don't think Osbourne has a handle on the facts. I think he's completely fucking clueless about the whole thing. I am furious.

I am not giving mine up because I cannot get clarity on what happens to my state pension from an official source, and I simply don't trust them not to move the goal posts and turn around in 10 years time and tell me I stopped claiming CB so won't be entitled to anything.

I may opt out in 12 months when I can be sure of how it will play out. There are just too many unknowns at the mo. what if DH doesn't tell me how much he warns? What if I don't want him to know I am claiming CB? What about independent taxation? What if he doesn't sign up to SA? How can he be forced to? I'm not saying this is how it is, but if he were an arse it could be.

Xenia, I can't imagine working full time with 4 children 5 and under and a partner who is away a lot.

That's not to say I disagree with you, I wish I had kept my hand in, took it more seriously and stuck at my professional qualifications. 12 years on and I too am starting from scratch. It's more daunting now than ever. Hindsight is a wonderful thing. And I was a dickhead in my youth.

"s is also untrue as there may be many people affected by the change who are single earner families with a stay at home parent where 60k is the total household income and many families with two lower incomes that equate to over 60K who will still receive child benefit. The latter have not been included in the 15% figure."

Of course they have not been included into the 15% figure, because they don't fall into the 15% of people who earn more tham 60K. It's that simple. Plus 60K on a single income without childcare cost goes further than 60K made up of two incomes, from which you deduct 15K for childcare straightaway. It's not rocket science, is it?

(Well, I would not have married someone who would be away a lot whether business, army etc... we had 3 under 4 and both worked full time and both did as much as each other in a non sexist relationship at home and then 2 more and I work full time as single mother of 5 but each to their own)..

Yes the distortion is exactly what makes me livid.

I only had 5 years out of work my entire life and I'm now paying the price. I'll be seriously sitting my dd down when she is considering children and hopefully educating her so she doesn't make my mistake.It's sad but I seriously don't think mothers staying at home with their dc is an option any more. Governments def don't want mothers doing this and long term I think it's financial suicide.

What children need or want simply isn't an issue anymore.

Just wanted to add my general annoyance to the unfairness of this. Like others, it's not so much about the fact that they are taking the money away but that it is not being fairly done. Adding to my irritation is the statement on the opt out form that 'I don't want to receive this benefit' - er, no, I'm (well, my DH makes me) not eligible! Grrrr.

No Widow 60k on 2 incomes goes a lot further than 60k on 1-the tax is a lot more on 1 income of 60k and if children are of school age ie 4 or looked after by grandparents which happens a lot at our school there is no child care.

You can still claim it as I am and they just pay it back if the other spouse cannot get their income under £50k. It is not harm in just continuing to claim it.

It has certainly been felt to be unfair and is not going to help the Conservatives in improving their position in regards to middle income couples.

polka well, maybe childcare costs should be taken into consideration, as if there's no unemployed grandparent to look after the kids the costs are horrendous, and school hours don't cover a working day plus commute either.

Maybe it's a regional thing, but I don't know many with free family childcare, as either the grandparents work themselves and/or live too far away.

(I think anything which disincentivises people leaving their jobs to look after house and children is a good thing, by the way)

Widow Wadman
What I was saying was that the 15% of families losing child benefit are not necessarily the 15% of families with the highest income. George Osborne has implied that they are which is not true.

Families with 2 lower incomes do not necessarily pay for child care. The parents may work shifts or one parent may work school hours only or they may have grandparents providing free childcare. They may be receiving state help with childcare. If the incomes are under the higher rate tax threshold their tax bill will be a lot lower.

I think the Tories are sly for not having this upfront in their election manifesto. Sneaky sneaky.

Also majority of those in high income bracket will get around this with clever accounts and paying themselves dividends. I fear it will be those just over the limit who will be most effected.

Widow once dc are in school families are very creative. I don't know anybody with high childcare bills.Many double up with friends as work part time,many have part time working grandparents alongside grandparents not working at all.There are often free clubs and a couple of hours a day wrap around care is helped by tax breaks.Most friends I have with school age children aren't paying for childcare at all.

Sorry childcare is not an argument for blatant unfairness.

Families get vouchers from 2 so it's 2 years of expensive childcare bills as opposed to losing child benefit for good.

More importantly a family with 2 x 30 k salaries and 3 kids will be £350 a month better off taxwise than a family on 60K,add in the loss of CB and it comes to nearly £550 a month difference-just because there are 2 earners instead of 1.

It's ridiculous and blatantly unfair.George Osbourne just looks like a plank when he says it's fair and the right thing to do.

I wasn't criticising your choices Xenia. I was agreeing with you, and saying 'if I knew then What I know now'. So I'm surprised by your post which seemed to be in reply to mine.

I'm pleased that you had the foresight to make life-long decisions early on. It is with regret that I didn't do the same.

polkadot I must be doing something really wrong that I'm not living anywhere near your bubble.

It's most certainly not a bubble Widow.

(oh, yes I see).
Polak our nanny who looked after 5 children 3 school age cost quite a bit. I didn't notice any reduction in childcare costs at all for a long time. Then yes we did find someone who would collect from school only once they were there but still had to cover just about every holiday as I just take 2 weeks off a year.

" majority of those in high income bracket will get around this with clever accounts and paying themselves dividends. I fear it will be those just over the limit who will be most effected. "
Not easy. Loads of those people are employees, not self employed with companies. They may be on £65k salary or £100k salary with an NHS trust etc. They have no scope to reduce their income. I don't think even with my brains and despite being self employed I could get my income lawfully under £60k. So I will lose all the child benefit, keep it coming in and then pay it back on the tax return. (Not suggesting I cannot afford not to have it by the way - though universal benefits do make people support the state, they buy into it, do their bit etc. If you alienate people they often then do the minimum)

If they do allow a third of your childcare against salary as tax deductible then a £30k childcare bill (tax, NI and all the rest for a nanny looking after 4 children full time) you could claim £10k which is about £4k a year in tax relief. I think they are going to find it very very hard to work all this out. They might limit it to under 5s I suppose and perhaps onl to registered childminders and nurseries but that would be unfair on those using a nanny because they have loads of children and it's cheaper. They might cap it at the most anyone pays in the cheapest part of England not London. It will be interesting to see how it works out. It would be a method of buying votes from women whose votes they have lost.

The vouchers mentioned above no way cover care. We had some for our 3 year olds £600 hardly anything towards even their part time nursery school place.

In the early days we paid 50% of one of our net pays to childcare or 100% of one net pay (we earned the same) in the days before tax credits, childcare vouchers etc. Obviousl it paid off as I earn quite bit now but it certanily wasa huge burden paying for a full time daily nanny to look after 3 children u nder 5.