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.

Mum2Luke I'm also in the NW and agree that its not that much cheaper!!

I don't agree though when you say your H is being penalised for working hard - its not always the case that hard work = high salary. There are millions of people who work long hours / extra shifts / more than one job / stressful job but are not higher rate tax payers. There are some professions / careers which just don't pay as well.

I think the child benefit changes are disguisting. We will lose all our child benefit where as my sister and her husband, who have the same family income, will keep all of theirs.

As others have said £60.000 is a good salary, but not massive. We live in Scotland in an average size house in a good area, don't have exotic foreign holidays and certainly wouldn't class ourselves as wealthy. The gov'ts clawback of child benefit will mean I will have to return to my part-time work after my maternity leave finishes (which I will receive no help with costs of childcare either).

i don't know what the answer is for the country but this, to me, is incredibly unfair.

olga, I think HMRC are saying you maintain that home responsibilities protection even if you do not keep claiming CB. As long asd you have been in the system as a CB claimant you keep getting those NI credits as a non working carer of an under 12. However as people's income varies it may be safer anyway to keep claiming and then pay it back as long as people don't spend it and not have the money to pay it back of course! Particularly women whose husbands give them very little money and rely on CB even though the husband earns over £50k - best to keep your CB and he can pay it back later.

Lot of posh voices on phone-in last night yelping about not getting child benefit on 50 to 150k a year. Dont they realise that 85 per cent of the country live on very much less than they get? Luxury is not a necessity in a recession.

Yes but you must claim it. One of the problems which has been highlighted is that in households where the main earner gets over £60,000 those with home responsibilities may not bother claiming when new children are born.

So it's not so much about existing children as making sure you claim for new children whether you are over the threshold or not.

Quite right pickety. The point is people losing their child benefit are in the top 15% earners in the country. Hard to feel sympathy when so many other people a lot less fortunate than them are suffering financial hardship.

I agree that for new children they need to claim if they have a non working spouse.

On sympathy issues the poor have no idea that a single mother on £50k who works full time has the same net income as the unemployed single mother once the £14k tax, £14k nursery place and £14k mortgage is taken into account. That is the unfairness. The welfare state is so very generous that the £50kers are often in the same position as those housed at their expense who do no work. I agree however that those well above £50k are much better off than those on benefits.

However so few people earn very high sums that they had to hit the middle earners to make the £2bn savings this apparently achieves. If they just aimed it at those on £100k there are so very few of them (like the very few on the 52% upper tax / NI rate) that it doesn't yield much at all as so few people are in that category.

as for who gets what

FOOTBALLERS? up to 150 grand a week in Premiership.

Doctors? betwetween 100 grand and 250 grand a year (If private.)

BANKERS The Sky can be the limit with bonusses.

POLICE CONSTABLE  about 23 grand a year.

Nurses (starting)  20 to 23k a year.

Teachers     do           do

Postal delevery:  14 to 18k a year.

MPS about 70k with 30k for helper (Who can be wife or husband. )

Royalty see Premier Footballers and top bankers.

Refuse collectors. Around 18k with overtime. 

PEOPLE IN BUSINESS Skies the limit if successful (Branson etc) or bankrupcy if you fail

DOES IT ALL SUGGEST WE ARE A VERY UNEQUAL SOCIETY?

They could of course balance this out by making ALL of my childcare tax deductible.

Just tweeted my MP about HMRC sharing tax details. He seems to think they can't, but is unsure. He is going to check for me.

Very variable figures though pickety

Lots of lawyers barristers GPs and Docs especially Junior on less than half you suggest.

A few of the ones you mention will get 1 million as a bonus quitea chunk of that can be tax free if you plan it right (I gather lol!!)

However I did once show my husband how with some 'plannin' the guy on a million could be down to 50k For day to say spending!!!

Oscar and see this link. Interestingly at the end it seems to say they will only tell you if your own income is higher than your partner's,. I thought I read elsewhere they would only tell you information such as - your partner earns over £60,000 or £50,000. Th atis not quite the same as in the guidance below. Telling someone your husband earns more than you (if you are a housewife) does not tell you if he is on £1 a year or £100m. Nor does it solve the question of whether he is over £50k or not.

www.hmrc.gov.uk/childbenefitcharge/faqs.pdf

This is the key bit

Q14: How do I know if my income is more than my partner's?
A14: If you cannot ask your partner, you can ask HMRC to tell you if your income is more than your partner's. HMRC cannot give you a precise figure of your partner's income but can tell you if their income is higher than yours.
High Income Child Benefit: problems getting information from a partner

Q15: Why do I need to tell my partner about my income?
A15: You will need to know whether you or your partner has to pay the charge, because it is payable by the partner with the highest income. You will only need to know if your income is higher or lower than yours. You will still have your own Personal Allowance and be responsible for your own tax.

Q16: Is HMRC allowed to share my income details with my partner?
A16: HMRC is committed to the principle of taxpayer confidentiality and has to safeguard this. You can ask HMRC about your partner's income levels without breaking this confidentiality - follow the link below to find out more.

They then link to www.hmrc.gov.uk/childbenefitcharge/problemsgettinginformation.htm called problems getting information out of your partner.

I might as well post it as it's interesting;

Who can ask HMRC for the information

You should only ask HMRC for information if you have not been able to talk to your partner about their income and Child Benefit entitlement.

If this applies to you, you can only ask if you are one of the following:

You have an individual income of more than £50,000 in a tax year and live with that partner.
You have an individual income of more than £50,000 in a tax year and have split up from your partner during that year.

Your tax agent or adviser can request this information as long as they are formally authorised to act on your behalf.

Find out how to authorise an accountant to deal with HM Revenue & Customs for you

Top
Information you can ask for

Because of the need to respect the confidentiality of your tax affairs, and those of your partner or ex-partner, the only information you can get from HMRC will be one or both of the following:

Whether your partner/ex-partner was entitled to receive Child Benefit for a specific tax year.
Whether your individual adjusted net income was higher than your partner's/ex-partner's income for a specific tax year.

This will be based on the latest information available to HMRC.

Top
How and what to ask HMRC for

You can either send in an online form which sets out what you can ask for, or you can write to:

HM Revenue & Customs
High Income Child Benefit charge
PO Box 192
BOOTLE
L69 9ZW

Ask HMRC for High Income Child Benefit information

You won't be able to ask HMRC for the information over the telephone or in person.
Writing in

If you do want to ask for information, you will need to use this exact wording in your letter:

'Based on the latest information available to HMRC:

Was my partner/ex-partner entitled to receive Child Benefit for [insert specified year]? and/or
Is/Was my individual adjusted net income higher than my partner's/ex-partner's income for [insert specified tax year]?'

Your letter will also need to include:

your name and address including postcode
your date of birth
your National Insurance number
your individual adjusted net income for the tax year you want the information for
your partner's or ex-partner's name, full address (including postcode) and their date of birth or National Insurance number if you know it

Agents

If you are writing in on behalf of a client, you need to make it clear that the details relate to your client.

HMRC will reply to you. The reply will be in the same format as if your client had asked for the information themselves.

Top
What HMRC will do

When HMRC gets your request they will:

check their records
verify both you and your partner or ex-partner from the information you have supplied
let you know whether or not they can provide you with the information you have asked for

If HMRC can't provide you with the information, they will not be able to tell you why.

Top
The information HMRC can provide

HMRC will only provide the following in their reply:

In relation to question 1:

'Yes/No, [insert partner's/ex-partner's name] was/was not entitled to receive Child Benefit for [insert specified year]'

In relation to question 2, that based on latest information available to HMRC:

either that 'the income for [insert partner's/ex-partner's name and the year for which the information is being provided] was higher than the figure provided by you', or
'the income for [insert partner's/ex-partner's name and the year for which the information is being provided] was not higher than the figure provided by you'

Top
Follow up requests

If HMRC can't provide you with information for the tax year you need you can contact them again. But you will need to ask for the information in the same way as you did for your original request.

Pickety a lot of those on a lot less will have a partner earning a lot less but the combination of 2 x a lot less makes a lot more and they can pay less tax on top.

Oh and the nurses and police. I know do a lot of overtime on top of their salary at very high rates if they're nights,they also get a pension most of us can only dream about.Both could easily earn40k and keep their CB.

BabyBun yes it does seem unfair - the only justification is that in a single earner household only one person is paying income tax. In a dual income household both are paying income tax. These days, raising your own children is evidently not the done thing.

That's not the most unfair aspect of these proposals though - it's the cuts to tax credits which will have far more impact, hitting 7.9 million families with at least one adult earning.

At least people are finally waking up to the fact that this Government thinks everyone who claims any benefit is a scrounger, even those who work.

While at the other end of the scale, millionaires will happily enjoy a £40,000 tax break.

It seems unfair to me. No we do not need it, but that isn't the point - lots of couples who need it even less than we do will be getting it.

DH earns over the threshold, but I do not. We would struggle to afford to have even one child -- unless I became a SAH wife/mother, which is not something I'm prepared to do. It also doesn't seem a sensible strategy either for us as individuals or generally. It's better for our financial security if we are both working, especially as my income is likely to increase significantly in the future if I stay on track (so if anything goes wrong in the future, we're less likely to have to claim benefits). My current career is a better use of my particular education and skill-set than doing childcare would be. It's better for the economy surely if I'm working and we're employing childcare workers (as well as the cleaner, gardener, dog walker and so on who we couldn't justify if I was at home).

No CB isn't the only deciding factor, I know it isn't a huge amount of money. But every little makes a difference, and I just don't understand the logic of a policy that pushes me towards being economically inactive.

Is the child benefit cut basicically A Cameron or clegg idea? It seems more Lib-Dem than Tory. But I xould be wrong.

Anyone changing their votes in disgust or appreciation. (Thats what politicians worry about)

XENIA is brilliant when explaining. But does it realyl have to be that complex?

Come on Dave, come on Nick, Come on George. Put the puzzled voters out
of their misery. Dont laugh dont cry.......JUST SIMPLIFY.

Thanks. I don't know why it has to be so complex. Universal benefits are simple. Means tested ones are not.

i feel very very angry about losing my child benefit. I live in greater london, the cost of living here is far higher than other parts of the country. I was born here and me and dp live here because the industries we work in are here. dp earns approx 60k incl his bonus, i earn 10.5k. why is it fair we lose our benefit because we have one high earner when a couple earning 49k each get to keep theirs? why is it not done on household income? why is there not a london weighting? i appreciate there are a lot of people who work hard living on less than we have but this money was used to pay for clothes, food and nursery fees for my kids. childcare fees are fucking astronomical, i feel totally screwed by a bunch of people who never have and never will know what it is like to struggle for money.

But Ephiny, if your DH is over the £50,000-£60,000 threshold it will make no difference to your child benefit entitlement if you continued working. He would have to pay it back whether you are working or not.

What you are saying is that if you had a child you would struggle to maintain your current lifestyle, not that you would struggle to afford to have a child.

I don't agree with the means-testing of child benefit, but I don't see how this change is going to push anyone into being a SAHM.

The point of continuing your career is (as you point out) not letting your education, skills and experience go to waste. Also, when the children are older you haven't lost earnings and pension entitlement, and don't have to struggle to gain employment again (usually at a lower level/salary).

The cost of the childcare you need is a joint responsibility, as xenia points out.

It certainly is and the change means it is better if women work so I have also argued elsewhere this is a great feminist message which may feel painful now but if it gets more women into high earning super duper careers then well done Cameron the feminist....one might argue.

Now that the single person allowance is going ultimately up to £10,000 it makes sense for both in a couple to work too.

On the privacy rights point I do not think the HMRC guidance I quote above is that clear. Will they or will they not tell you if your other half earns over £60k if you ask them? I suppose if the other half will not tell you then you keep claiming the CB which I think is worth doing anyway whatever your income level, and leave it to the secretive other half what he or she does on their tax return. They might then ask you - do you claim CB and you might sya none of your business you secretive so and so who does not even tell me what you earn. Then the partner can call HMRC and ask does my partner claim CB and HMRC will say yes or no I suppose.

This is the other interesting question -

"Who is my partner for the purposes of this charge?
A3: Your partner is your husband or wife or civil partner, unless you are permanently separated from them, or the person you are living with as if they were your husband, wife or civil partner. The partner you are living with does not have to be the mother or father of the child"

So the test is is the person you live with living with you as husband, wife or civil partner. So a lodger does not count nor your aunt or granny or rich mother or neighbour. The test is is it as if husband and wife which presumably means sex. They do not say how many nights a week.

if one income is less and the other goes other they get to keep it that dosen,t seem right to me, dosent seem fair at all.