Should child benefit change, and how?

[MidnightPatrol]

Martin Lewis talking about the unfairness of how child benefit is applied today. Millions more are being caught up by its removal.

Key points:

• A single income household with a £60k income is eligible for £0, while a dual income household earning up to £100k gets 100%.
• The earnings threshold has not changed since 2013

Should this change, and if it does change what would be 'fair' instead?

e.g.

• Should the arbitrary cut-off be higher?
• Should it be universal?
• Should it be based on household rather than single income?

it seems the NI credits could be administered much more cheaply. When a baby is born, the office that tracks the credits should automatically get a notification and flag the mother’s record. She gets credits if she works or not for the allotted number of years. everything is a database now. They just have to put a flag on the record to apply the rule.

There will be some rare cases where children are no longer in a mother’s care at all, but those could be notified and the automatic credit stopped.

these systems were designed for the days when things really were administered with papers processed as they crossed a desk. There just isn’t any reason for that anymore.

They could change it instead of one parent earning £60 or two parents earning £98k they could change it to household income of £75k and DC get full amount and over £75k - £80 sliding scale. Over £80 in the household I don't think it's needed. That seems fair to me. It has always been seen as unfair.

These bullied DC could go to a different school. Staying home not mixing with other DC won't help them in the long run. They should be Guaranteed a school place in a different school.

If you live with someone who earns over £60k I didn't think you could claim?

Totally respect other people’s choices as long as they finance them

@DragonFly98 I get Carers Allowance so I am still getting NI credits.
What I meant though is an awful lot (and I mean a lot) of secondary age children are currently not in school. Many many reasons - bullying, not being able to cope in large mainstream schools, mental health issues, simply not having a place because there aren't enough of them - just to name a few.
One parent has to take on home schooling and can't easily work. But their child hasn't got a medical diagnosis so the parent can't claim Carers. At least I don't think they can. They can still be getting the Child Benefit but miss out on the NI credits because their child is over 12.

I don't think the government is going to want to spend more money on it. I think they will probably change to a household income of 70K or 75k. Households with 2 earners on 35 to 50k each would lose their child benefit. Households with 1 earner between 50 and 75k would gain. Households with more than 75k annually from 1 or 2 earners still wouldn't getting it. The government will have fixed the complaint and more people will lose from the changes than win. The money the government 'saves' will probably put be used towards the extra administrative requirements of establishing household income.

It should return to being universal, and if more money is needed then increase income tax rates. My understanding is the high income child benefit charge only saves c £100m a year, which is hardly anything for a totally unfair policy.

Why is means testing always too difficult for pensioners benefits, but not for benefits that parents receive?

A penny on higher rate income tax would raise c £1.3bn a year, and would be fairer.

@caringcarer it's very hard to change schools (lack of places).
If you look at the Facebook group "Not Fine In School" you will see that 1000s of secondary age children are out of school - not by choice (it's heartbreaking).

Universal. Any attempt to means test inevitably risks bottlenecks and disincentives to work, and doing it better than we do requires throwing loads of resources at the issue.

For the record, my household are winners out of the current policy, as our household income is over 60k but we retain full CB.

It was originally intended as money for the parent (overwhelmingly the mother) who might not have access to any other funds. It should be universal, increased to a decent amount (it was capped too, and hadn't risen in line with inflation for years) and not means tested - I'll never forgive George Osborne for robbing the poor to pay for austerity.

I'm opposed to doing it on household income, even though it might be less absurd than the current system, because it would be yet another example of the state wanting to have their cake and eat it too. DH and I have to combine our income for benefits purposes, but we can't do the same with our tax allowances? Bollocks to that. Pick one or the other.

Just in capitals for those who still don’t realise…

YOU CAN CLAIM NI CONTRIBUTIONS AND NOT CLAIM THE CHILD BENEFIT PAYMENT. It is (and has been since at least 2013) a toggle box on the online application form.

Also, if you don’t need to the NI contributions because you have gone back to work you can give them to a relative (often a grandparent) who provides some care for your under 12. https://www.moneysavingexpert.com/family/grandparents-childcare-credit/#:~:text=You%20can%20apply%20for%20specified,the%20way%20back%20to%202011.

IMHO the government are unfortunately going to do diddly squat on this issue. I’m surprised they set the level so high in the first place as they could have retired the whole idea as being no longer fit for purpose by now.

As well as the practicalities, I think they had to set it so high in order to minimise opposition. Needed to be able to be portrayed as something the rich who didn't need it were claiming.

If they are going to combine income for child benefit for the household then they would arguably need to link tax allowances across the household.

Cue Labour moaning that it is giving high earners who are rich enough to have a non working parent a tax break.

There are alway cliff edges with any tax system. Look at the effective 60% tax you pay over £100k to £125k. That cliff edges hasn't been increased for years either.

The £100k threshold is often bandied about like you are living lif like a millionaire but I'm reality more and more people are being tipped into the bracket.

No politician will dare adjust that for fear is upsetting 'hard working families'

@Blankscreen me and my husband get the Married Persons Tax Allowance thing - so our incomes are combined/linked for that.
(Although I don't have an income except Child Benefit and Carers Allowance)

Yeah, let's blame this system on a party that hasn't been in power for almost 14 years. Makes loads of sense.

Let's also ignore the fact that Child Benefit was universal until 2013, including 13 years between 1997-2010 when Labour was in power.

I don’t think child benefit should be universal. Not everyone needs the money and benefits should be for households where they are needed. I wonder if just having one universal benefit for those requiring support would work? Instead of tax credits ( for those on legacy) /child benefit/ universal credit, have one household benefit. That way, eligibility could more easily be determined (and implemented) by household income rather than one sole higher earner.

Do you think pensions should be universal? Not all pension aged people need the money…

Exactly @Dazedandcovidconfused . Bet the government don't do that though, as it wouldn't go down well with the section of society that are their keenest voters.

Yes I think pension should be universal. If it wasn’t it would be penalising those who sink thousands of their working income into a private pension.

That would make it even more unfair for single parents, because they only have one income and can't delegate to lower earner in order to keep receiving it eg from what you are saying, one person can earn £250k and the other £12k and they can delegate to the £12k income to claim...that is why it is fairer as household income

But you're fine with 'penalising' parents who could get their income below the CB threshold by working less or not going for that promotion, and don't?

Having children is a lifestyle choice. People don’t like it being described that way but it is true. Getting old and being unable to continue working 30-50 hour weeks because physically your body just wont let you any more is not a choice.

They could choose to do that if they wished, I have a friend who isn’t full time for that reason.