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.

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.

Thanks again Xenia, doing if I read that correctly, and I will be forwarding it on to my MP too, then HMRC cannot actually do a damn thing about collecting any tax back from the other partner in respect of cb.

Interesting.

So, have sex with someone makes him/her your spouse? Oh boy.... the divorce courts are going to be very full.

It seems that logic ought to be unlawful.

Well I do think there are an awful lot of Tory/Lib Dem voters who will be absolutely fuming about the child benefit and tax credit changes.

It wouldn't surprise me if the Tories lose votes at the next election over this. They have underestimated how much child benefit and tax credits are relied on in the expensive south, their heartland. I expect the Lib Dems, who up to now have been the home of the protest voter, will in any case be annihiliated in 2015.

People have been completely misled by all the "strivers and shirkers" presentation, thinking it was only the underclass, the career claimants, who were going to suffer.

They didn't realise the Tory Party despises all benefit claimants - even the working, middle-class, Tory-voting benefit claimants.

Full marks for the brilliant PR which has surrounded these changes, and the Universal Benefit. Zero marks for basic humanity and concern for the welfare of children.

While all this has been going on, you will see from this that the Government plans to bring in tax breaks for childcare. As Ben Brogan says:

So we have the prospect of better off mums who today must sign away their Child Benefit being offered a substitute stream of cash if they have a job. Hard luck for the stay-at-home mums who must not only now get used to being without their Child Benefit, but who will also have to swallow seeing their working friends get new money from the state.

I do wonder where all these jobs are for those parents with average educational and skill levels, now that the number of graduates in non-graduate jobs is rising year on year.

My guess is that anyone who wants to be a full-time parent will have to become a registered childminder, and care for the children of those who are lucky enough to find work.

We have worked out what we will owe the government. £8!

Wankers. Shall I send it in 1p coins?

Very interesting on the local radio, they had interviewed some people losing the benefits including grandparents who were saying that they will need to pick up the missing treats etc and the children will lose out.

I wish we had grandparents to buy the odd treat or like so many of my friends be the unpaid childcare so I could go out to work.

I am outraged by the way this new child benefit legislation is being handled as well as the seemingly ridiculous way tax credits are managed. I got divorced in 2007 and set up house for myself and my 2 children. I got a p/t job to tie in with the kids and school and applied for tax credits. Over the next 5 years, the child benefit and tax credits that I received meant that I was able to juggle my finances and we managed pretty well. This summer, I sold my house, my new partner sold his and we bought a place together. Although he has NO financial responsibility for my children and I am essentially paying my way x 3 in the new house budget, I now no longer get ANY tax credits because HIS salary is over the threshold. I am still trying to juggle work and kids as I have for the previous 5 years, but with a lot less money. Now I have to decline the CB I've been getting otherwise my partner has to declare it and pay it back in his tax! The whole system is RIDICULOUS! I obviously understand that by living together, some of my costs have gone down, but why can't the tax credits (and CB) be graded to MY income and situation? There must be other people in this situation. It seems crazy that by moving in with my partner and creating a nice home for my kids (not to mention freeing up a house for the 'stretched' housing market), I am much worse off financially. The situation is putting stress on our new set-up - I've even thought about moving out!
The crazy thing is that when I moved back to the UK from the US (where the children were born) I was told I could claim this CB. I was contacted about it by the then Inland Revenue. I told them that I didn't think I should get it as my then husband made a good salary. They actually said to me that I might as well go on and have it as it wasn't means tested and everyone with kids could get it!! Maybe if they hadn't been so cavalier with their funds, people who deserve and need this money now could continue to get it!

I have written a few times about this, because it incenses me - the spin, the inequity and the blatant cynicism, just as much as the loss of the money itself.

Impressive work from the Tory leadership over the last few days working hard to cement conviction in many people's minds that a household income of over £50k delivers the lifestyle of a multi-millionaire. It is depressing beyond belief that people are buying into it so enthusiastically.

This was never a need-based "benefit". It was, effectively, an allowance for the additional costs of child-raising, paid in - overall - the fairest and cheapest way.

This whole policy is a fig-leaf to allow them to make even more swingeing cuts to this who are really in need, and a lot of people who are more or less in the middle are being hurt as a consequence.

It won't affect my family, but I can't see how it punishes sahp, I am sahm and nothing changes for us, but we are poor, lol.

I think its unfair that some families can earn up to 100k yet others only 50k. It should be done per family imo.

I am an employee with a fixed salary so I can't reduce my income to avoid this. However, I do have childcare vouchers deducted from my salary. They are classed as 'Salary Sacrifice'. I have just rang HMRC and apparently these deductions don't appear on your P60. If they don't appear on your P60 then they won't take these into account when deciding to deduct the tax for child benefit. For this change to child benefit, apparently the rules are different. It did take them ages to find this for me, so I'll complete the assessment and see what happens.

If a line has to be drawn to save money, fair enough but in this case it is so unfair. I resent the status of being a SAHM deemed a luxury. My DH works hard and earns only just over the £60k threshold thus we lose our benefit completely. But knowing that other households can earn up to £98k and not lose out seems grossly unfair. My DH can work hard and earn what he does coz I'm doing my job at the other end and he needn't worry about it. He has risen up the career ladder because he doesn't need to take time off for child care, can, at the drop of a hat, make himself available for projects, working away etc. It was our choice for me to SAH because it was best for the kids. We are a team. He earns the income for all of us whilst I do the other stuff. Our circumstances and careers meant it couldn't have been any other way. Now our family is being penalised for that because the role of a SAHM isn't seen as making any contribution to society (at least that's how I'm made to feel).
Unless I actually go out and earn a wage, I'm basically a no-good scrounger.

I earn no wage, I cannot pay more into a pension nor do I get working tax credits because I chose to have children and bring them up myself. Now I have no family benefit whilst other households earning more money do.
If the £60k was per household and not per earner it would make the pill easier to swallow but this is the most unfair policy that this Government has ever come up with and I just cannot fathom it.

Lots of interesting points.

I do think that they can claw back from a partner. He has a duty to ask his wife if she is claiming child benefit. If she refuses to answer he can ask HMRC if she is. I expect when I get next year's tax return it will ask me to answer if I or anyone else in the household claims CB. I will say yes and I will pay all the CB back then. If I were living with a partner and did not know if they claimed CB and I did not then I suppose I could put on the form - I do not know. HMRC would then toddle off to check and let me know my partner did claim CB and would send me a bill. I cannot see how people can avoid repaying it because their partner refuses to tell them if they are claiming it when HMRC have the information and will simply tell you and they have a statutory right to it.

What it dose throw up is why we moved to separate taxiation of husband and wife. Women used originally to be almost property of a man. Indeed they couldn't own property at all in English law back in the 1800s as on marriage it was all the husband's. Bcak in about the 1970s onwards there were years of campaigning to ensure women and men living together were not lumped into one for tax purposes. This CB change is the first thing which whittles that away.

The reality is that if you don't nkow what yuour husband earns you're an utter idiot . You ought to see each other's P60s, know everything otherwise you will get utterly screwed on a divorce and if you're just interested in knickers and shoes more fool you - get on a course to learn about finance. However some couples do want loads of confidentiality which always puzzles me.

The final point is about someone moving a man in. Someone asked about husband and wife. It says as if husband and wife so there will come a number of nights a man stays with you which then amounts to husband and wife or partners. HMRC have not said how many nights that is and I imagine there are large amounts of cases under the benefits legislation to help decide who is a live in lover and who is a bit of sex on the side. Of course if women kept working full time (my advice) they would not have some of the problems mentioned on the thread. As for someone whose new partner will have the CB to pay well make him - you keep claiming the CB and as the price he pays for your wonderful company and beautiful face and all the rest is that he has this extra burden but it's a very small price for him to pay to get to live with you surely, about £2k a yearo r something. I am sure he can afford it. IT is his liability not yours. If he wanted someone not in that position he could have picked a woman on £100k a year.

Perfect HMRC just worked out DH wage -childcare vouchers! They really are a bunch of idiots!

The trouble with having these discussions now is that it seems to me very much a case of shutting the stable door long after all the horses have bolted. The time to have kicked up a stink was back in March when Smug Osborne announced the new policy after throwing out the original " every HRT would lose it". There was a massive uproar about that one which is why they rehashed it to what we have now. So many people breathed a sigh of relief then that this new policy rather got swept under the carpet for a while and the great majority just forgot about it.
I just don't think enough people really appreciated at the time how it would affect them. It 's only now that it's really happening that folks are realising what a bummer it is....

Savannah believe me I was whining ages ago!

"What it dose throw up is why we moved to separate taxiation of husband and wife. Women used originally to be almost property of a man. Indeed they couldn't own property at all in English law back in the 1800s as on marriage it was all the husband's. Bcak in about the 1970s onwards there were years of campaigning to ensure women and men living together were not lumped into one for tax purposes. This CB change is the first thing which whittles that away."

Xenia - where's the difference to being lumped in together for tax credit purposes?

No I know my working or not makes no difference to whether we get CB olgaga. I meant that this benefit being taken away from us just makes us even less able to afford childcare than we would be otherwise. Absolutely agree that childcare is a joint responsibility between both parents, I would never suggest otherwise . However our joint household income is not really enough to cover full-time childcare (and still be 'comfortable', have savings etc). CB would help a little with that. Not a lot, but it would be a step in the right direction.

As it is, basically the only way we can afford to start a family now is if I give up work (and sabotage my career progression and future earnings). Yes that's my choice to make,and no one else's problem. But it seems odd to me that a government policy should be pushing parents into that situation. And it does seem unfair.

They might well lose my vote over this. The only problem is there's no other party that seems very appealing to me either.

So was I polka so much so that Child Benefit has become a swear word in our house in that my DH & DC's cover their ears when I talk about it!
I also whinged to my MP, to Dave, George, Ed and to most of the daily papers!
And I whinged on here, but a certain quarter of the MN sorority told me I was being greedy & entitled!

polka at least one crumb of comfort is that we and quite a few others on this thread can say " we're all in this together" - to coin a VERY well worn phrase of Dave CaMORON's

Watched ' the Iron Lady' last night - remember the poll tax riots? People power really can make a difference when we really feel outraged by government injustice - Im certainly up for it! Sadly, people dont really take to the streets anymore, peacefully I mean, it always ends up in a big fight with the police. But parents should express their sheer horror and disgust at such an unjust policy - sign petitions, get groups of like minded people together to protest.? Too little too late.

What pisses me off is how ignorant some people are when they think you earn 50K because the comments i have seen in various places online are along the lines of if you earn that you must be rich, live in a big expensive house, have 2 big expensive cars and several foreign holidays a year. Yeah right.

For a start they don't take into account tax! Just because one person earns 50K per year, that doesn't mean they take that home as some of it is 40% tax! Plus when you earn that and have had the tax deducted, you have to pay for everything yourself, no help with rent/council tax/childcare/school meals/school uniforms/tax credits. I am not saying you shouldn't have to pay for those things if you earn 50K, what i am saying is whilst those on a lesser income may get help with those things, a higher earner won't so by the time you have taken those things from their income plus tax and N.I there is not alot left for expensive cars and foreign holidays like people think!

If fact the way it is put out there, it is worded as if someone who earns 50K keeps all of that money and spends it how they please. This is not the reality! Most of it is swollowed up in tax, N.I and all of those things that some people on a smaller income may get help with!

My husband has a small business, works a 60+ hour week (although you never do switch off,) i am a SAHM mainly and help out at the business (but don't gain an extra income,) he earns depending on business takings between 49 and 55K per year, we have a modest family car, we have had 1 holiday since we met in 2005 and the house was bought as a wreck by my dh that has been done up slowly over the years as and when he could afford it and had the time. We are not extravagant people or live a glamourous lifestyle, we are just a hardworking family who pay our bills.

My dhs best friend and his wife DO live an extravigant lifestyle. She earns 44k per year, he earns around 30K per year. They have the big 4 bedroom house (with 1 dd,) have 2 cars, foreign holidays, she has expensive taste in clothes and is very materalistic, they eat out several times a week and spent nearly 20K on a new kitchen last year! Great you say, if they earn it let them spend it! My gripe with this is - their CB will not be affected at all! Grrr

I think that's partly why it seems so unfair. DH pays a lot of tax on his salary, and so did I when I was earning a similar amount. We've both worked hard and contributed a fair amount. So yes it feels pretty unfair to see that money going on paying for other couples (who in some cases actually outearn us as a household) to have children, while we can't afford to ourselves.

I have no problem paying taxes for the welfare safety net, essential infrastructure and services etc. But I can't feel good about this.

moonlighter you have pretty much summed it up there. What many people (including the Government it seems) think is a lot of money, really isn't because after hideous tax and NI charges, you are left with very little of your own money!

Mandy21 He has worked very hard to get where he is, at one time he was thinking of taking a job where he would stay up in Cumbria and I would be on my own with the 2 children we had then but am glad it didn't come about. I don't see him alot of the time at weekends too as he might be sorting a job going out so if I wanted to work weekends I couldn't rely on him being here.

I would love for my older two to be able to afford to live out but the 22 year old would be stuck renting a place and never get on the mortgage ladder. We have no savings now as they have had to be used for house/car repairs. CB is the ONLY benefit we get, used to get tax credits but they have gone too. My youngest goes to high school in September and with that comes expensive holidays (you feel you should let your child go on so as not to miss out) on top of the uniform and usual school accessories.

I would like to get a better job instead of the dinner lady one as it is very tying, I really want to do what I am qualified for - Level 2 Teaching Assistant and maybe do a University degree in education but AGAIN I cannot afford the fees and we get no financial help from parents.