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.

Alternative - pay the CB as an additional credit through CTC. Instantly tapered by household income. People earning bog-all get CB/CTC. People earning more than the TC limit - don't. Fair? Bureaucracy already in place.

I think it need to be taken on the household income not if just one person earns 44k.

As it has been pointed out with two people working they could earn up to 83k and still get CB.

If a household income is over 44k then no CB

Sorry - haven't read all the messages on here so far so I expect the point has already been made - David Cameron and his colleagues don't give a fuck about getting low paid people out of the cycle of poverty. All they appear to care about is entrenching the existing elites and ensuring all the people at the bottom of the heap are grateful to earn a pittance that barely feeds and clothes them. It's like the last 100 years haven't happenened. Arrgh

mydoor, well said however dont forget to be "gratful" for a crap wage as some on here think

Almost all of the MN postings on the cuts in benefits advocate the higher paid having to receive less and pay more. There is a limit to this, as people with skills and education who are prepared to work hard have another option. They can leave.

Even before the current UK financial crisis the number of UK citizens leaving was increasing. Its now running at almost 200,000 per year. We do replace them with half a million immigrants but these pose in immense burden on the public services. Some of these are highly paid bankers, but not many, and they are the spawn of the devil anyway aren't they??

How many MNs want to live in country where a significant number of their fellow citizens would like to leave (almost 50 per cent at last count) or are doing so. You can squeeze the talented but at some stage it costs more than it brings in, short and long term.

Welsh, you make a fair point however of the 200,000 leaving how many are taking up jobs abroad. Personally I dont want to become some other countries immigrant.

That said, I do intend to buy a foreign property in the next ten years and live their part time when I retire.

I agree with the poster re raising vat, that way everybody pays not just one group.

Working whilst at college is good for teens, it gives them a work ethic and is good for self esteem. All my friends worked through college, it was the norm.

I think all the child benefit threads where people say they cannot afford x, y and z if child benefit ceases show just how much benefits encourage people to have children that they cannot support themselves.

Happy, higher VAT hits the poorest hardest, better to raise VAT to a higher level on luxury goods such as £500 hand bags.

Happymotherofone..when I had my children my partner had a good wage..he got made redundent several times..shit happens

To second what Loudlass said and to answer Domestic Goddess - most, if not all, large companies have stopped employing under 18's. Most people now days are employed on flexible contracts, and have to work weekends/eveings as part of their contracts. Companies don't need 'saturday kids' any more and frankly the average

So many people here and in real life suggest increasing taxes for the rich. I'm really not sure about that at all. Am I the only person who thinks it's very unfair that someone should have to give away half their income simply because they have a good job? They are already contributing a LOT more in tax than lower earners. I agree with Welshexpat on this one. It's hardly going to motivate people to climb to the top of the career ladder or stay in this country to do so!

TBH I think it's the people who are 'just' in the middle that are hit the worst. If you work a full time job on a decent enough salary you aren't entitled to any benefits, any tax credits, your CB is about to be cut. If you sat on your ass for half of the week then you'd be better off in many cases. :(

A friend has pointed out to me that EMA varies throughout the UK
I thought the cut off rate at parents earning £22k was universal, seems thats just in Scotland.
So if that can't be standardised what benefits can?

Ideally mean tested benefits would have a "tapering " so teh more you earn the less you'd get until the cut off point.

As for kids working after school or Saturday jobs many places that would have taken on kids as PT Saturdays work now have flexible work shifts, this will include staff taken on part time contract but they are then offered "extra" shifts so technically still PT with the reduced sickness and holiday entitlement.

Newwave

Happy, higher VAT hits the poorest hardest

I was surprised to find that empirically this is true.

...but no idea why.

Given that food, public transport, childrens' clothes and books are zero-rated, and energy supply 5%, it is frankly astonishing that the bottom 20% earners manage to spend about 70% of their disposable income on full-rate VAT items!

Whilst top 20%, spend about 35% of their disposable income on full-rate VAT items.

Explanations welcomed.

I don't agree with taking CB away from children above 16. I think the answer is simply income tax, then it can be applied fairly.

I think CB should be stopped at lower than 16 I was thinking more along the lines of age 12. I think the CB is there to recognise that children are expensive and that the majority of families need extra financial help over the early years.

By the time your youngest child has reached 12 there is no reason why most families shouldn't have both parents working at least on a part time basis to help pay the bills.

In the case of families with a disabled child or responsibilities for caring duties I would continue to pay it until 18. If one of the parents is claiming jobseekers allowance I would also continue to pay the benefit until the age of 18.

cumfy - not sure I fully understand the VAT thing, but here are some thoughts...

Top 20% probably have the luxury of putting quite a big chunk of their disposable income straight into a savings account, so VAT rise doesn't affect that.

Not all food is 0% VAT - anything with a star next to it on your supermarket receipt is VAT'd. Includes some items that you might not consider "luxury" like tampons (not food I know but you get the point)

Another reason that VAT rises hit the poorest is because they probably have less room for manouvre (sp?) than the rich... if you are already living on a pretty tight budget week to week then a VAT rise is much harder to deal with than if you buy some luxuries every week which you could cut out.

bubble, i'm with you. you get paid more for a reason - either you have more responsibility, danger, inconvenience (my husband works on ST contracts wherever the work is) or you are more qualified/skilled. We already pay more tax than lower income households and its increased significanlty during the labour years. you can't just keep on milking higher earners.

i think that EMA should go. The student can always get a PT job - as my son has had to. I also think that OAP's should take a hit - winter fuel, bus passes - especially for the bette off ones. Even my IL's who are on benefits give money away each month as they have too much.

Personally, I think child benefit should have been scrapped years ago. It was introduced after the war to raise the birth rate. We don't need to do that anymore, in fact if you can't afford to have kids to the extent that child benefit makes or breaks your family budget you shouldn't have them in the first place. They should have scrapped it for all new births after April 2012.

viv - i think this is a bit harsh on people who want kids and can't afford them. Perhaps a kinder approach would be to limit it to 2 chidren

Well said VivienScott. The reasons for it's introduction are completely out-dated nowadays. I was surprised that the Tories didn't just scrap it completely. I can't understand all of the venom that is being displayed over the loss of £20 per kid a week. FFS. £20??

You obviously don't need £20 a week then hammy. Give your up voluntarily if is isn't required.

Just a thought when you bash the bankers (who yes, were horrifically irresponsible and played a large part in the recession) but of the £900billion of government debt, just £185bn of that was lent to banks. So that means, between 2002 (when we last had a balanced budget) and 2010, the government overspent on the country's credit card by £715 billion.

We have to pay that debt back somehow, and the sooner the better (interest on the debt alone is costing each person in this country £1,400 a year), and I'd rather we all tightened our belts and cut CB. FWIW, it directly affects me - DH is just above the £44k threshold. My choice to be a SAHM will therefore be governed entirely by economics, as was our decision to start trying for children. If we couldn't have afforded it, then we wouldn't have done it (literally :) ) as I don't see why the state should support me when I'm fit, healthy and capable of working.

VAT- kettle, VAT. Kitchen scales, VAT. Sauceans, VAT. Cooker, VAT. Fridge, VAT. Essentials for anyone, and while someone on a very low income may buy the cheapeast shittiest model of each, the VAT will stil be 20% on them in January. And if you buy cheaper, you have to replace them more often. But people on low incomes cannot afford to buy better in the first place, so while a decent set of saucepans may cost £60 and last 10 years, poorer people have to buy a £6 set that you are lucky if the handles haven't fallen off in 10 months. And you still have to pay VAT each time you have to buy them.

Raising income tax - will still hit FT workers on minimum wage, and we've already had our income tax bill doubled, anymore will literaly cripple us, and conversely, force the government to pay out MORE in tax credits to keep us in work.

So raise the 40% to 41% and you'll get more than a billion in. I could live with that; it's the unfairness of this cut that's pissing me off.

scaryteacher I'm with you.
The decision to cut the deficit using a ratio of 80% cuts to 20% tax rises is a political choice. It could be a higher proportion from taxes (as has been the case in previous belt tightening times). It would be fairer.

The more tricky judgement is the effect of cuts on growth and tax revenue. Whilst debt payments are no use to anyone, there is a real risk that cuts which result in more unemployment and less spending will simply send the economy in a downward spiral, with less tax revenue. We need to use state spending wisely to promote business development and support growth, particularly in economically weak regions. I see no evidence of an economic growth strategy so far - you can't start a business in an area where all the workers (your customers) have just been made redundant...