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 am writing to my MP again today to question the legality, the implementation and the logic.

When this was proposed there were all sorts of questions raised on whether these cuts are legal because they discriminates against a group of people (largely women). The Fawcett Society was campaigning at the time. Seems to have been swept under the carpet though.

I have just phoned the NI helpline as this thread panicked me, if you stop CB payments it does NOT affect your NI credits

This copies from HMRC website;

If you decide to stop your Child Benefit payments it won't affect your entitlement to Child Benefit.

As long as you, or your partner, are entitled to receive it you should still complete a Child Benefit claim form for any new children. This is because entitlement to Child Benefit:

can help you qualify for National Insurance credits that can protect your entitlement to State Pension

can help protect your entitlement to other benefits such as Guardian's Allowance

ensures your child is automatically issued with a National Insurance number before their 16th birthday

You must report any changes in circumstances that could affect your Child Benefit entitlement, for example if your child no longer lives with you or you move to live abroad. You must do this even if you have decided to stop receiving the payments.

I'd buy into that if they changed 'can' to 'will'.

I don't trust this shower not to move the goalposts in the next few years.

What taxes have gone up Strix?
Think this is part of the problem - won't raise direct taxes for ideological reasons.

This now seems to actually be a question of whether one is having sex with another member of one's household. Hate to think how that's going to be policed.

We appear to have 'taken this lying down' and just allowed it to happen. If one compares it to the woodland protest, which appears to have been successful (temporarily?). Why have we done this?

A sad day.

NI contrib/Pension issue is possibly dealt with by new guaranteed universal credit.

Yes, HMRC say that but if income might drop or someone just over £50k or £60k could ensure their income is under through pension contributions etc it might be wiser still to claim CB and then just pay it back. Also in some couples the working husband does not pay the non working wife enough money so in those cases it is wise for the wife still to claim CB in order to buy food for children which is why when set up CB was always paid to the mother rather than spend on wild women , song and drink by men.

I don't think politicians seem to know that someone on £50k may have the same net income after childcare, mortgage, tax and NI as someone on much less. The way the system works is to ensure that if you earn littley ou get housing benefit, council tax credit, tax credits which increase your income. The benefits cap is not yet in force . It will be £500 a week - £26,000 net a year for families. That will be about £35,000 of gross income.

So if you do not a jot of work you get up to £35,000 gross a year from the state (particularly in London where rents are high).

So not working benefit claimant can equal £35,000 except you have oceans of leisure time. If you earn say £50k then you have £36,000 net to the £26k net in our comparison. Sounds like a lot =- £10,000 more a year because you work!! Yet childcare one full time nursery place is often £14,000 so immediately you are worse off than the non worker with a child. If you have more than one child a daily nanny can cost nearly £30,000 - we had 3 children under 5 and worked full time at one stage.

www.guardian.co.uk/society/2012/may/12/full-state-pension-parents-carers

Not that I trust them on this

They took away half of my childcare vouchers when i was made redundant and had to find a new job, thereby considering me a new entrant to the scheme. Now they have taken my child benefit. They removed my husbands entirlement to childcare vouchers altogether when the company he worked for went under and he went contract. They are reducing susidies the the trains, resulting in my increased fare.

Where is this support for working families? It seems "we are all in this together" means I give and they take.

Child benefit for me is the straw that broke the camel's back.

The government needs to reconsider what level of income (taking into account London rents and full time childcare bills) actually leaves a family with enough money for things like food and clothes.

Hypothetical question.

What if I don't opt out?
DH is over 50k (just).
He refuses to self cert because he is taxed through PAYE?
I don't tell him that I receive cb and it is payed to me, in my account.
He doesn't tell me what he earns because he doesn't have to.
HMRC cannot tell either of us of our individual tax affairs.
Can the government actually do anything to reclaim any cb?

Is this wrong. Please bear in mind it's just a hypothetical situation.

I've asked the same questions, and have not found any answers.

So the 50% tax rate is not effective and is removed and the child benefit tax is fair and great? Come on government, don't make us laugh!

Women's Hour R 4 NOW

Google Boris Johnson's piece in The Telegraph if it wasn't so infuriatingly out of touch it would be hysterical. Apparently CB funds "decent" ski-ing holidays,safaris and filling the wine cellar- yes really!!!

To Oscar
You will keep getting child benefit. The intersting question is whether HMRC will be able to find out who amongst the PAYE tax payers has children. Presumably they will get a fast computer to cross check the addresses of over £50k tax payers on PAYE against the child benefit database. I would expect any computer programmer could set that up pretty quickly. Then if they find Mr X has a child benefit claimant in his house they then write to mr X and ask for some of the CB back - if he is just over £50k it will not be that much paid back. If he sticks a tiny bit more in his pension to put him under £50k then you don't lose the CB at all.

HMRC Is being given the legal right to know what others earn int he same house.

They have also set up a team of people at HMRC to call up people who may have got things wrong (ie be trying to trick the system) and they will be asking about who lives in the house. You have to be in a relationship as a couple so if it is two girl friends that does not count but if as husband and wife that is the test. I am not sure how much sex you need to count as in a couple!

(The 50% rate is still in force, 52% if you add NI) and it was only brought in just as Labour was going out and it doesn't really work - it has hardly brought anything in)

Thanks Xenia, how on earth can HMRC suddenly be given the right to give my data to my husband without my consent? (Hypothetical, I'm playing devils advocate here.)

Do we or do we not have individual taxation in this country?

I think the HMRC might be prepared to share information amongst themselves (and other government organisations) which they are not prepared to share with you.

Agree it is linking one persons tax affairs to another's that is a major change too.

I doubt they will be able to do anything of the sort with a computer quickly I had the most rediculous fraudulent tax credits claim made in my name once.
We had moved house so only estate agent and reference agency had my details (rental) it was of course to he paid into a bank account in. Third name.

Whilst the IR child benefit etc knew my only address as my previous one knew about my PAYE wages nd my children they processed and paid out this claim when I rang to report it (can't stop payments without a police crime number either) the guy said yeah I don't know why we pay these nearly all claims to bother bank account are false!!!!
No shit Sherlock
Then he took uite a bit of persuading by me that it should be stopped from the date the claim was made not the date I had phoned him.

So the fact that the arse doesn't seem to know what the elbow is doing is one reason why I intend to claim it and allow them to claim it back should they be able to (along with the fact that you never know when you might loose your job eyc etc)

I think I checked the point earlier this year and found out that the Government has ensured in the legislation there was that right despite the all important principle of separate taxation. It also gives you the right to call HMRC and ask if your husband earns over £50k.They will not tell you what the eranings are just whether over teh figure,.

Sorry for all the typos I am literate honest!!

Lol at I give and they take strix
That's exactly what we're all in this together

Can we blame the bankers for this one too?

Hi I would just like to emphasise something which xenia has touched on.

Even if the main earner in your household is earning above £50,000 you must continue to claim child benefit, especially if you are not working or not earning much. If you don't you will jeopardise your Home Responsibilities Protection.

If you have a child under 12 - and you're either looking after them at home or you work but don?t earn enough to pay National Insurance contributions - Child Benefit can help you qualify for ?credits? for being a parent or a carer. These credits count towards your State Pension.

Details here.

An acquaintance of mine who earns 60k plus and is divorced from the father of her children. However the CB is in her ex's name but gets paid into her bank account..they obviously don't live together so don't have the same address so as far as we can work out she will keep all her CB for her 3 DC as it won't be linked to her iyswim? Again how is that fair??

I refer to blame the reckless spending habits of the last Labour government, and especially Gordon Brown whose only good deed was keeping us out of the Euro.

adelle283498 - you might earn 50k but you certainly don't come out with with after all bills are paid.

We have always supported our kids (we have 3 - 22 years, 19 years and 10 years), I have always worked as a childminder since 1994 as well as a casual (not always getting work) dinner lady between 1997 and 2001 and now doing it again until the 10 year old goes to high school where I hope to work full-time although where I live that is getting increasingly harder with the average 50 people going for the same job.

CB doesn't even come to me, it goes straight to my son's account from my own, I have always set it up to go straight from my account and never used it other than to buy things for them. It will be reduced now and I feel DH is being penalised for working hard to get where he is now. The eldest lad has just started a new job and is going to have to start giving rent to cover his costs, the other is on £2.60 per hour as an apprentice chef)

We don't go on fancy foreign holidays, have one car now having sold the other, don't really go out much as a family (can't afford to), its not that much cheaper up here in Manchester you know, we have higher insurance costs on our house and car due to the area we live in and food isn't that much cheaper either, I don't think its cheap anywhere now.

Yup strix although I was on hpc last night and someone on there had a graph showing the massive spike in public sector spending to bail out banks it was very striking