Child Benefit 50k cap

[K198]

The cap in child benefit, like many benefits doesn’t appear to have been reviewed for many years and is outdated. It states child benefit can be stopped if either parent earns over 50k. But if both parents earn 49k, then benefit remains (meaning total household income is 98k).
with cost of living and inflation, salaries have risen but the cap hasn’t. Equally the provision appears to penalise many single parent families who only have one household income.
What are peoples thoughts in challenging this and how to go about it?

I suppose the only way to make it 'fair' would be taking a total household income into account rather than individual parents earnings.
I believe this has been put in place long time ago, could do with a review however not sure how successful challenging would be.
I get it, it's shit. And unfair in comparison with a potential 98k income plus CB. It's a stupid assumption anyone earning over 50k has more than they need but when that person is the only provider and is feeding a family of, let's say, 5-6 people, that fact is getting overlooked.

We're going to get caught out by this for the first time, my husband will earn a few hundred over £60k so we'll get nothing. We'll manage but with 3 kids and the COL crisis it really was a significant help every month. My best friend has 3 kids too and a significantly higher household income but will always get it due to how her husband pays himself (self-employed). It really does seem unfair.

Pay more into pension to bring salary below threshold. Double win.

It is incredibly unfair, I'm a single parent who is about to lose it and I know couples who are on just under £100k collectively who receive it.

Lots of posters will be along shortly to say that people on salaries of £50k shouldn't receive it, but those of us in that financial area get zero help and many of us have huge outgoings that can't be reduced.

I read something that said adjusted for inflation the cap should be more like £62k. It hasn't been reviewed for years and with the way bills are increasing more and more a £50k salary while not on the breadline by any means doesn't mean a life of luxury either.

But surely he contributes to his pension?

Agree. It should absolutely be based on household income.

agree, they do it for everything else, benefits etc

I think everyone agrees it should be household income but I guess admin costs prevent the government changing it. It sucks.

Whilst £50k might sound a lot; that doesn’t mean a household has loads of disposable income.
I’m from the generation where every mother received cb irrespective of income and for some it was their sole source of money to feed their kids. Financial abuse occurs in lots of relationships as a form of control.
I would prefer a system whereby every mother (or father with parental responsibility) receives cb.

Mothers who feel they don’t need it and feel it’s not a good use of taxpayers money can refuse it or donate it to a children’s charity .

Or the they don't want to piss off the high earners who, rightly or wrongly, feel they should be getting something back for the amount of tax they pay.

I completely agree. I wrote to my MP about this some years back and got a wishy-washy response. Should have followed it up more, but just didn't have the bandwidth when I was learning to be a parent for the first time.

Other things are means-tested based on household income, so I don't see why this cannot be the same. It is unfair that one house can earn 99k on joint salaries and receive CB, but another can earn 60k on one salary and receive nothing.

FWIW, we still claim ours (even though DH earns above the threshold) and then pay it back via his tax allowance. This means that if he was to be made redundant/ not earn as much (due to fluctuations in his annual bonus) we wouldn't miss out- you cannot back claim for it, even if you would have been entitled to it.

To reiterate what has been said above its based on adjusted net income. Important to understand what this is and how it works

Isn’t it on one income because it is collected back through the tax system through self-assessments and we have individual taxation and not joint taxation? I agree it is unfair and the cap should definitely be raised.

It should raise with inflation, as should the tax free childcare cap, and maternity allowance

I don’t see why pensions and other benefits rise with inflation but anything to do with mothers and children gets pushed aside

The way to challenge it is to come up with an alternative that raises the same amount (or more) in tax revenue and/or costs the same of less to administer.

Just going it’s not fair boo hoo isn’t going to achieve anything. A fully costed alternative proposal may he traction. The proposal must be equitable - that means it can be seen as fair by some and unfair by others. It also needs an equality impact assessment.

Note: The original proposal was a hard cut off at £50k.

It's deliberate, like higher rate tax rates not rising, it's a less visible way of raising taxes and offloading people off benefits, don't assume it's been overlooked, they know full well. Best chance of changing it is getting the Tories out.

@Fretfulmum

I agree on Tax Free Childcare. It was introduced in 2017 and the support hasn't increased at all since then.

Increasing the cap would be a fairly easy way to help working parents.

It isn't the responsibility of a voter to provide policy alternatives if they are unhappy with how things are.

What would be the point of HMRC policy teams if the public had to rebalance the budget themselves?

If it's reviewed more households will lose than gain.

it should be universal

It's deliberate, like higher rate tax rates not rising, it's a less visible way of raising taxes and offloading people off benefits, don't assume it's been overlooked, they know full well

yep

The changes that you want, which would make life easier for people with an income over £50k, would directly make things worse for the poorest, most vulnerable and disadvantaged children in the country.

The reason that it's not directly means-tested - anyone can have it, its just clawed back via tax-return for high earners- means that those who desperately need it but are either too proud to ask for a hand-out or too overwhelmed by complex income-declaration forms are still able to get it very easily.

The reason it's not done on household income is because that helps women who are trapped in financially controlling relationships.

The Child benefits aren't really aimed at you, if your income is so high that you care about these rules. The only reason some people with a higher income qualify at all is because it's safer for the children at the very bottom of the heap to have the net very wide and the rules very broad.

I wish people were unselfish enough that everyone whose household income was over about £50k and who aren't otherwise disadvantaged saw it as a natural and obvious action to take that un-needed child benefit and donate it to a children's charity where it's actually needed (gift-aided of course)

The reason it's not done on household income is because that helps women who are trapped in financially controlling relationships.

@JaukiVexnoydi

I don't follow this at all. The type of household most disadvantaged by this is a single earning household - either a lone parent or a household where one parent stays at home and the other works.

If a woman is in a financially abusive relationship with someone earning £60k, the HICBC does not help her. It actually works against her if her partner insists she doesn't claim because he doesn't want to pay it back.

On the point about people earning £50k donating the money, would you say that to a wealthy pensioner about their state pension or winter fuel allowance? Plenty of older people don't need that money either.

It's the same for the 30 funded hours - my husband earns over £100k so we don't qualify. But if we were both earning £99k we would. The system needs reviewing so it looks at household income and not just cap it if one salary exceeds the limit.