To think benefit caps should relate to FAMILY income?

[TallyLo]

I decided to work out the difference in our family income that has changed by changing job roles in recent years.

A few years ago DH and I were both teachers, earning about 31K each. Now with promotion DH earns 62k and I plan look after the children after this baby as childcare costs in London will exceed my wages. Our household income therefore is the same, simply one person earns what two used to earn.

I was surprised to calculate how big the difference in take home is with both scenarios:

1. (one earner of 62k)
   

Earnings after tax: 46k (no higher tax bracket)
Childcare voucher savings: (2x930) 1860
Child benefit: 1700

Total: 49560

1. (two earner of 31k)
   

Earnings after tax: 42k
Childcare vocher savings: £600
Child benefit: 0

Total: 42600

So that's a huge SEVEN GRAND difference in budget, on the same household salary.

I'm not arguing that we should get more from the state, we're obviously in the bracket of a good household income and it's right we're not entitled to benefits in the current climate. I do however think benefits need to be brought into line based on family income. With the proposals a household with two incomes of 49k could be taking home nearly 40k more than us and receive more vouchers/ child benefit. I can't think of the reason why family income is not used to calculate entitlement.

If anyone is interested a nusery place in London i around 1100 per month, so 2 is £2200, so requiring a salary of £36,000 to cover fees (and excluding costs of commuting, similar to the savings of childcare vouchers so it balances out)

*this is my calculation, I'm no expert so someone may find errors!

[WelshMaenad]

That's interesting pickle. I wasn't sure if the intricacies if it, the couple I knew were married. Glad cohabiting parents get the same consideration.

It makes perfect sense to me. When my grandfather died my patents were able to use both their allowances to reduce inheritance tsx by sharing the money.

[OutragedAtThePriceOfFreddos]

Its a relatively short period of their working life. Most women do return to full time work eventually and they worked full time before their family. The governant expects us to work to 69. If a mother takes off 4 years to bring up children, returns part time for 3 years and then works full time the rest of her career then she will pay plenty of tax during her working life. Over her entire working life its likely that the SAHM will put in more into the system than she takes out.

Maybe, but not neccesarily. And even if they do, then they are still not contributing as much as someone childless who hasn't taken any time out of work, and they are still taking more out of the system than someone who hasn't had children.

So I still can't understand why you think childless people need to be paying more to support the ones that do have children.

[MrsBethel]

YANBU, a cap on family income would be fairer.

However, even that would create unfairness. Each time they come up with one of these harebrained schemes it creates a 'lump' in the marginal tax rate as it is withdrawn. A parent on £50k and might be 29p better off for each extra pound they earn, while for someone on £70k they get to keep 51p of each extra pound they earn.

If they want rich people to pay more, it would be a lot fairer, and a lot easier and cheaper to administer, to simply put up the top rate of income tax.

[blibbleflop]

I'm more for cranking up the personal allowance to about £15k, scrapping the top rate of tax, scrapping NI, making the base rate 35% and closing all the tax loopholes.

This way once you start paying tax, everyone pays the same percentage regardless of what they earn, but they have no way to avoid paying as they currently do.

[LibrarianByDay]

Benefits should be calculated on household income, yes, but minus what it costs in childcare expenses to earn that income.

People without children - well, nothing is ever absolutely fair is it. So, your subsidising those who do have children. But everything comes full-circle and when you're old and decrepit those same children will be subsidising you as well as their own parents. If childless people should not subsidise those with children perhaps, in the future, people should only subsidise their own parents and leave the elderly childless to fend for themselves.

[StarsGhostTail]

Of course they should!

Somewhere in being PC and giving women their own tax allowances and not giving tax breaks for being married, the system lost its way.

[ReallyTired]

LibrarianByDay, MrsBethel I like your posts.

I also think that tax is what we pay to live in a civilised society.

I don't want people with special needs to starve or families who have disabled children to have no respite. People's worth is far more than whatever arbitary figure they earn over a life time.

Maybe we do have far too much of a benefits culture in this country and I have no idea what is the best way to tackle this. We have the greatest number of young and old NEETS in history. I am sceptical that austerity is the best way to ignite the country's economy.

[ivanapoo]

If I had the choice between being able to choose to be a SAHM and sacrificing £7k, I'd probably choose sacrificing the £7k tbh.

Like other posters have said, only one parent working means much lower living costs.

The system isn't perfect but it's not as unfair as you make out either.