CB - alternative solutions?

[CardyMow]

If cutting CB in the way that has been outlined is unfair, how else could/ should the government save money on this benefit?

I ask this because a columnist in the Daily Fail (I ^know!) said that he would rather they stopped CB for dc at the age of 16yo, regardless of whether they are still in education or not.

I always thought that the reason CB was paid to 19 was because, if, like our family, you are caught in a cycle of very low wages (£16Kfor a FT job), the only way out is more education. If you take away CB for poor people, they will also lose their TC's, and theefore have a dc in FT education that they get NO income for, and are therefore unable to feed or clothe them. It was done because otherwise, these DC would HAVE to go out to work FT, just to have money to eat, thus them also being stuck forever in a very low paid job, with no chance of bettering themselves.

Surely education is the way OUT of the benefits trap? But many more dc will be forced to leave school at 16 to work in min wage jobs if their parents cannot feed them while they gain better qualifications.

It would make any form of further education the preserve of the rich, surely that is a step too far back in time?

While I agree that the way of administering this CB cut needs to be fairer and based on household income rather than one earners tax bracket, surely if minimum wage is £5.85 p/h, then a lot of the country earn barely more than £12,000pa for a FT job, so wherever you are, whatever you are doing, £42K is a HUGE income...Why shouldn't CB be cut for anyone with a household income of £34K pa? My family certainly wouldn't need CB if we had an income of £34Kpa.

Just raise income tax if you need more revenue - then you fairly target everyone (not just families with young children) and the rich pay more

Benefit cuts generally hit the poor

Cutting so called middle class benefits unfairly targets those on a particular income bracket

You could also tax bankers bonuses at, say 75% or even - shock horror - make them pay their bloody taxes in the first place

girlafraid, I agree with you.

George Osbourne is "selling" this by saying it is unreasonable to expect someone earning £18k to be taxed in order to pay a benefit to someone earning £50k. If this is what he is concerned about, then how is he going to make sure all the savings from cutting CB go ONLY to basic rate tax payers? He isn't. It will "benefit" everyone, including higher rate tax payers without kids, or with adult kids.

If you want the "middle classes" (read "households with at least one person earning more than £44k") to do their bit then raise income taxes on incomes over £44k.

Universal CB reflects the fact that society values children and encourages all those who choose to have them. Or is that not the case any more?

Completely agree Loudlass.

completely agree with girlafraid, put up income tax but leave CB alone, this would hit me harder than losing CB but I would much prefer it. And it is fair!

Next they'll be saying NHS is only avaialble for those on low incomes. There are good reasons for universal benefits

Once a child is 16, why can they not do a part time job as well as study to help support themselves? Not that I advocate cutting cb for over 16s, but why can't they work as well? Agree it should be on household income, v unfair on lone parents imo. Don't like the idea of having to ring another government phone line, to be hung up on and ignored every time my income changes though (as tax credits is now).

Not all 16yo's will be capable of fitting in a PT job, and minumum wage for a 16yo would not give enough on PT hours to feed them for a week. And if, like our area, thee are plenty of adults going for those self same PT jobs, to fit in around childcare? If they can't GET a PT job?

Income tax going up..they have already done this...it put up DP's tax from 10% to 20%, doubling the amount he was taxed...or have people that didn't seriously affect forget about that already?

forgotten not forget!

RJ - don't understand your point. As I see it, £1.1bn (I think) saved by stopping CB to 40% rate tax payers means £1.1bn won't be cut from benefits for lower rate tax payers, who are in greatest need. Or did I miss something?

yanbu
if cb had been stopped at 16 ds would not have gone to college.
and tbh dd might not go on to 16 plus(oh yay then the good old goverment can pay for her to go residential,. only a couple of grand a week.)

I don't see why they can't look at household income via the tax credit system (big assumption I know that the system actually works...) as they already have all the data for most of the people with kids.

Won't affect us as DH is not a HR tax payer (I wish!) & I'm SAHM ATM, but it is definitely not fair that a household with an £86k income (both earning £43k) will still get it, but a household with a £44k income (earned by one person) won't.

In fact why not do away with CB as a separate benefit & combine it in with tax credits? (there I go again with that big assumption that the tax`credits system actually works...good idea in theory though )

I'm with BetsyBoop.... When they froze CB in the last budget I thought that was the start of it being allowed to fizzle out and die. If they scrap CB all together and make the whole thing part of (a more simplified) CTC i.e. dependent on income, no. of children, childcare costs etc. then it would help those in need and everyone else would fund their own families.

Once you earn £844pwk (£43kpa) the amount of NI you pay drops from 11% to 1%. Why not just keep it at 11%? This would more than pay for universal CHB.

I understood children from low income families got EMA for post 16 education, so they are given help there already.

Higher rate payers aren't being subsidised for their cb, their own tax contribution at 20% more than other people more than covers it.

They can't look at household income via the tax credit system as that presupposes that everyone claims tax credits. They don't.

The abolition of the 10% tax bracket was Labour, not Tory legislation.

HR taxpayers are already looking at a lowering of the 40% threshold so they don't benefit from the extension of the new 20% band, and another 1% in NI.

Foreverstudent - are you sure that is correct? I thought last Gov removed the upper earnings limit on NI for HRT payers?

They can't look at household income via the tax credit system as that presupposes that everyone claims tax credits. They don't.

Maybe not, but I would hazard a guess that everyone who needs tax credits claims it ( + some that-could-survive-without-but-it-makes-life-a-bit-easier + some who-in-all-honesty-really-DON'T-need-it)

The functionality is already there with a few minor tweaks, all they need to do is change the way claims are handled - they can call it the "Child Benefit element of Tax Credits" if they want to make it more politically palatable, not payable to any family with a household income over £xxk

But EMA is £30 a week. DD's bus fares to college would be Over half of that each week. Could you feed a 16yo on £12.50 a week?

Loudlass - when I'm talking about putting up income tax, I'm talking about people at the higher end of the income scale. Totally agree that getting rid of the 10% band was a complete disaster and hit those on lower incomes.

olderandwider - they might use the money they save on CB for protecting benefits for those on low incomes, or they might not. The money won't be ringfenced so we'll never know. My point is that you could put up income tax for high earners instead of cutting CB and it would affect all high earners, not just those with kids. For me, that's preferable, even though, like mendipgirl, it would probably end up affecting me more. And it would be easier to administer!

On the NI - I think the upper earnings limit for employers' contributions was removed, but the employee only pays 1% on their top slice of income.

Add CB to to CTC and aboilish it as a separate entity OR only pay for X amount of children. And don't lower the CTC limit.

WFA should just be paid to those on pension credit &/or DLA.This would then cover those with disabled children who currently aren't eligible.

Neither would require much in the way of admin.

SAHPs should have something to fill in to 'register' for their stamp and once they pay NI though employment that would stop. Which would take some admin but possibly could be automated eventually.

It would actually be fairer to abolish it altogether and make it the "basic" element of Tax Credits, tapering off for households of incomes over, say £50,000.

This would address the individual vs household inequality, and the fact that at £43,999 you get all of it, and at £44,000 you don't.

Seeing as they have already buggered up the whole idea of CHB as a universal benefit.

Olderandwider - they did - it used to stop at the top of the 11% band and everything after was free of NI. Now you pay 1% on anything above that too. Obviously introduced at a low level which could easily creep up over time as adding an extra 11% tax to people earning over £43,000ish would be v v v unpopular.

This is an interesting page of statistics about earnings in the UK. Sorry about the fact it's Wikipedia, but it is all properly referenced.

Another interesting page.

scrap trident, and leave CB alone.

Put VAT up to 25%. :)

nymphadora

That sounds so sensible.

Why don't they do that ?

Just loses votes I suppose.