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The cap in child benefit, like many benefits doesn’t appear to have been reviewed for many years and is outdated.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?

Due to changing jobs, for the first time ever this is something I need to consider. Is it self assessment or will a bill come in the post asking for the overpaid money back?

Whilst I agree it seems unfair, the proposal of "I don't get it so let's take it away from lots of other people too" doesn't quite sit right with me.

If you take the money and your take home pay is more than £50k, you need to complete a self assessment and repay some/ all of it. It's straightforward.

If your post tax and pension take home pay will be more than £60k, you can ask HMRC to stop the payments so there's nothing to pay back.

Thanks, sounds simple enough!

I remember that too. I believe there was a lot of opposition to it when it was introduced ( probably on the grounds that women would fritter it away on cigarettes, gin and makeup) but for many women that little brown book was a lifeline and being able to cash it at the post office and have the money in your hand probably meant a lot of kids not going hungry on family allowance day.

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

How does it help more to have it done that way?

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 .
😁😁😂😂😂😂😂😂😂😂😂

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

No, it's because it's cheaper and easier to do it based off personal tax allowances than it is to means test household income.

For those considering declining as one person earns over the threshold, don't forget that claiming cb gives you NI contributions towards your future state pension

If you stop claiming, you lose them (we found this out the hard way)

So if one person is not earning enough to pay NI, still claim CB in their name and pay back the tax in the higher earners name
You won't get any actual money, but you will both get NI credits

Anyone who is only just over the limit, it is definitely worth increasing pension contributions so your net pay comes below

@wutheringkites no incentive to change for HMRC unless instructed by Gmt of the day.

Voters can make a difference if they co-ordinate behind a solution. Moaning won’t drive change action does.

They allow you to stay in the system but not receive the payments now.

@Tippingadvice

No, this isn't how policy works. Voters influence with their vote and through the fear of politicians losing their vote.

Policies affecting specific groups, e.g. lone parents are also heavily influenced by charities and pressure groups that do research and present evidence of the negative impacts of existing policy. These groups do communicate directly with depts, including HMRC.

UK policy making does not operate like a shitty employer by declaring that you can't complain unless you have a fully thought out solution to present.

I have a job connected with these issues, and never in my entire career have I ever heard a policy maker declare that it's up to the taxpayer to figure out an alternative if they are unhappy.

Pay anything in excess of £50k into your pension. Most people don’t pay enough into their pension anyway. Marginal tax rates (including loss of benefits, particularly with 2+ children) between £50k and £60k are high.
https://www.mandg.com/pru/adviser/en-gb/insights-events/insights-library/reduce-high-income-child-benefit-charge

@wutheringkites you state “Policies affecting specific groups, e.g. lone parents are also heavily influenced by charities and pressure groups that do research and present evidence of the negative impacts of existing policy. These groups do communicate directly with depts, including HMRC. “

Who forms pressure groups? Voters. Businesses. Employers.

How do they get their evidence? Researching how the policy impacts, including costings, equitably etc.

Do they ever propose solutions? Sometimes.

So effectively you are agreeing with me that voters who take action by co-ordinating a pressure group, researching the impacts and (sometimes) suggesting solutions can influence policy change. Whereas voters who just moan don’t.

@Tippingadvice

These pressure groups already exist and are already making these points. What is lacking is political will to reform them, not a lack of solutions.

Tax policy teams are not sitting around thinking 'if only some lone parents on mumsnet would get their heads together and solve this problem'

HMRC are aware that the system is not as fair as it could be, but the govt haven't told them to fix it - not because there aren't solutions, but because they don't care enough about lone parents specifically, and mothers more generally, to do anything.

If the general public and the govt gave a fuck about this, then HMRC would hop to it and figure it out.

It is not about a lack of solutions. It's about people not caring about the negative impact these policies have.

I was reading about it earlier in the year as hoped it might have been a budget issue but alas no. So from what I read there are lots of government studies/reports which acknowledge it is unfair but that the only way to end the unfairness would be to reinstate it for all OR require all households to do an annual tax return which the thinking was that this would be too onerous for every family to do and would also require discussion of salaries etc which might be something one party doesn't want to divulge to the other due to financial abuse

I think it should be reinstated where you can demonstrate you are a single parent. I for one earn just over the £60k so don't receive any for my 3 children. Am also a single parent

Thanks for this it just reminded me to write to my mp and complain about this unfairness. I encourage everyone else to do the same.

Its effectively a tax on single income households - whether single parent or SAHM. The inequity of two earning just under the cap getting the allowance and one earning just over not getting it despite the former having pretty well double the income was pointed out at the time but David Cameron and his millionaire buddies couldn't care less.

It isn't fair, for example a household on one income of £60k, (let's say due to one of the parents having illness/disability and being unable to work) pays more tax on that income and loses child benefit, compared with two parents earning £30k each, who both pay less tax on their earnings in the first place, and keep all child benefit.
What's the point in penalising single income families in this way?