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.

[Tincletoes]

Freddo - no you won't have to do anything. But your DH will (assuming he earns above 50k) be asked if his partner claims CB. If the answer is yes then his tax code for the next year will be adjusted depending on exactly what his income was for the previous tax year.

It is going to get v complicated. But not for you personally!

And completely agree that gross income can be a red herring. As someone else said, you could have a new graduate in 3 years with 50k of debt which would go a fair way to wiping out what initially seemed like a good salary.

[Tincletoes]

Ah yes Glitter that is a very very good point. For someone just over the threshold it would be v worth considering making additional pension conts to get below the threshold.

[PanicMode]

I'm sure it's been said, as I've only scanned the thread, but my biggest grumble is that it was the only way that I was able to get pension credits whilst being at home with my children - we have the "luxury" ( as someone upthread put it) of having 4 children, but living in the SE means that we're not loaded at all. I did work until having our surprise number 4, but currently it's not worth it due to the commuting costs and childcare. The CB is important to us, not least because I was getting my HRP credits. From what I read in the paper at the weekend, HMRC will demand the money back at the end of the year - so you can claim it, but you have to pay it all back anyway. I've decided that we'll not claim and I'll just have to pay additional pension contributions until I go back to work in order to make up for the deficit.

This government have treated women shamefully. I feel extremely betrayed by them and I really hope that they get absolutely hammered at the next election. I KNOW we have to tackle the deficit, and a country where 53% of households take more in benefits than they pay in, but this was the only universal benefit, and it was set up to give women who did stay at home a little bit of independence. The sensible way of doing this was to limit the amount paid to say 2 children. Not have this half baked, VERY unfair solution - it cannot be right that a household with 99k gets it, purely because 2 people work, but a household with 53k lose it.

[Babyrabbits]

So as a sahm do women need to claim cb to keep the ni contribution?

If so we need a thread highlighting this to all women!

[PanicMode]

Yes, you do. Otherwise you don't get the HRP.

[duchesse]

Oh, and I should add that we don't get any means-tested tax credits as we earn too much for them.

[Iggly]

It's a stupid idea quite frankly.

Cutting benefits on austerity grounds is one thing.

Cutting them to then introduce a system which is more complicated is bloody stupid.

Child benefit is one of the cheapest to administer when universal. Now it'll be a dog's dinner. I'll have to fill out a tax return just for this?!!

[Babyrabbits]

God no one made that clear did they?

Is edith setting up a thread.....this is the most important aspect for all sahm.

[Viviennemary]

I knew somebody who only worked a few hours a week as a child minder and paid the self employed contribution which was only around £2 a week. Would this protect people's NI contributions? She even paid them when she no longer worked.

[crazybutterflylady]

I echo what others have said; the dual-income condition is insane. My DH works hard at a job he doesn't enjoy in order that we can pay our bills and allow me to stay at home with 17mo. I am also 5 months pregnant (didn't go back to work so not receiving any maternity pay etc). We couldn't afford for me to go back to work because of the cost of childcare and the commuting time made it nigh on impossible.
Just another example of the government spending the majority of their time with the head up their arse, IMO!

[PanicMode]

Vivinnemary - I think you'd have to be registered as self employed - so I don't think that a SAHP could do that (but happy to be corrected if wrong!). The whole point of CB was that you got full years of NI credits whilst staying at home. THIS is what I'm most livid about.

[Viviennemary]

I agree you would have to be registered as self employed. But you could work only one hour a month or something. Well if Starbucks can get round the tax laws why can't women with children.

[Glittertwins]

I would recommend doing the maths and your aversion to risk before making choices on salary sacrifices. To bring DH's salary totally under the threshold, we would have to make quite a large pension payment that would be considerably more cash than the monthly cash reduction through tax.
Potentially we could get that extra pension back when he retires but then there is the risk towards the stock market crashing right before retirement which wipes out any of our hard earned saving. This has happened to many who have retired in the past couple of years.

[poppyknot]

It is the frightening incompetence of the way this has been introduced , first as a pre-conference idea and followed a year later by an equally incompetent revison,

I remember the initial interview with Geo. Osborne on the Today programme beofre he announced it and then and there James Naughtie pointed out the two income anomaly.

This still remains as even though they upped the level at which it kicks in the anomaly still reins supreme.

"Oh but means testing would be too expensive" they howl. so instead they introduce a system that does not even have historic equivalents. Many, many financial experts have criticised this non-system and there was even a pained expanation from someone last week about the difference between unclaiming and disclaiming (or something) as the question of National insurance credits does to seem to have been tackled. Have they costed how many will claim and then have to have it clawed back a year later, over a year? Administration costs? Change of circumstance?

DH two years ago could have been affected but a salary drop has since made the change unapplicable to us by a long way.

However I still rage about it as it is so useless, unwieldy and ill-thought out. I am now cross again!

[Princessdivaaa]

I agree with what a lot of others have said here already...

We will lose the CB.. (Just)

I'm a SAHM and I use the money for kids activities, school bits and pieces and I try to put a little away for future college funds...

Can we campaign the government to change this policy?

[Xenia]

It is a women's right issues. We fought so very hard to gain separate taxation of husband and wife - a major feminist triumph and now your income will again be lumped together and people will be obliged to let their other half know what they earn - massive confidentiality issue.

Yes, I am affected - single mother of 5 who loses it.

The impact is that one stops buying into the compact - that we are in this together. Instead you feel excluded - that you are in the 1% who pay some massive % of the tax in this country and get very very little back except whingeing benefits claimants who do not appreciate that you work nearly 7 days a week 50 weeks a year to keep them all . That the one thing you actually got from the state (I have never had a tax credit for example) to recognise the effort you put into the next generation - and my daughters alrady in their 20s higher or almost higher rate tax payers - so I am producing exactly the children the state most needs - is in some sense appreciated. In stead you buy out rather than you buy out and that compact between citizen and state is totally destroyed - you lose your sense of appreciation of the state and your place in it and feel you might as well head off somewhere taxes are lower and you are appreciated as a major net contributor.

Universal benefits make us feel part of society. Restricting them mean that we then choose to ensure lawfully the state is paid much less tax - we feel like outliers.

[shinyblackgrape]

not - the only way would if the government chose not to enforce the relevant part of the act link. However, I think they are extremely unlikely to do that and it is always there, hanging round the books.

The other alternative is that the relevant part if the Act in chapter 2 is revoked. Again, I think the government are highly unlikely to do that in the basis that it has been through the various committees etc and Joe Public had the chance to make appropriate representations but didn't or didn't strongly enough as the government would see it

This is something we could ask if there was a webcast though. I reported mt post to Mumsnet in the hope that someone will come on today/tomorrow and say if it is feasible for them to request that.

[shinyblackgrape]

webchat not webcast

[CelineMcBean]

Happybunny12 Get over yourself. My comments are my comments and if I was talking to you you'd know about it. I don't do passive aggressive.

[Pyrrah]

No you do not have to claim to get pension credits.

I had the question specifically asked in Parliament to check this earlier in the year.

Also spoke to the CB department at HMRC this afternoon who confirmed that pension credits will continue to be allocated.

[Happybunny12]

CelineMcBean whatever you reckon, love.

[Babyrabbits]

Thank god! What a hassle for so many.

To think i voted for these muppets.

[PanicMode]

Really Pyrrah? There was an article in the Telegraph at the weekend explaining the changes and it advised one to claim to protect pension credits. How do I exist for the state if I am not earning, being paid any benefits or in any way visible to HMRC?!

[shinyblackgrape]

Agreed babyrabbits. Fir the first time in my life, I am genuinely at a loss as to who I would vote for at the next General Election. I actually wonder if I'll have to make an absolute choice to abstain

[Iggly]

The idiot Tories still haven't addressed the inherent unfairness of two earning just under £100k getting it vs one parent over £60k not.

They should just make it universal. End of. Given how few household actually earn 50k+ anyway (average household income is around £30k), that seems better to me.

Fuck wits.