To think the child benefit arrangements are unfair?

[MobLife]

Only just clocked this and I'm still not 100% sure I've got it right because it seems wrong...
So if 2 parents are both earning £49,999 and hence taking in almost £100k household income they can continue to claim full CB

But

2 parents where the household income is way under that (lets say for arguments sake £70k) and one parent is earning the greater proportion (between £50-60k) will either get a much reduced CB amount or potentially nothing at all?

How is that fair??!

There seems to be a bit of the usual mantra that anyone earning £50k is obviously a millionaire (actually in many threads that threshold is much much lower) and how dare they expect a penny more.
There seems to be an effort to level down than level up.

As for the idea that household income would be to difficult to work out - they seem pretty capable when it comes to catching up with those higher earners whose partners haven't stopped claiming CB.
A few colleagues have been caught out, and fined/paid back the over payment +daily interest. In one case his wife wears the financial trousers in their household and didn't stop claiming when the rules came in and it was him a couple of years later got the please explain letter and the several years of self assessment to fill in and pay for.
Another had mentioned it in passing with his wife when the change happened. His kids being late teens he had no idea if she was still recieving CB or not and having never had any dealing in it had no clue or control. Yet he too got the letter and request for payment.
So they are more than capable of figuring out household units and who earns how much when it suits.

Personally I feel it should be either universal - if it's aim was to put money in mother's hands for the upkeep of their children if they couldn't guarantee support from their husband (which is a separate issue in its own right and shouldn't be a thing) - or it should be scrapped and fed into some other means tested benefit stream.

As a single parent, in that part repayment earnings band (and paying the Scottish tax rates so automatically £1500 worse off) I do find the cut off pretty unfair as there is no 2nd household wage or a stay at home parent to offset things child care related.

sorry I know this thread isn’t about this but my DH made £50,000 before tax this tax year probably around £44,000 take home after taxes, pension etc what figure does it go off before we have to pay the tax charge?

50k before tax and NI and after deductions for pensions etc

www.gov.uk/child-benefit-tax-charge

Calculator here:

www.gov.uk/child-benefit-tax-calculator

@SwanBuster thanks for that will double check as he definitely pays into a pension. If it is over And self assessment needs to be done do you have to pay it back in a lump sum or is taken back some other way?

It would also go back to being considerably cheaper to administrate if it was universal.

@JustLyra agree, I’m getting myself all in a muddle trying to work out if we will owe anything back, we also pay into tax fee childcare account not sure if that’s deductible or not

Don't know. I would guess lumo sum is default but they'll probably allow you installments of not.

Personally I wouldn't let it happen - if you're that close, just make sure pay everything over 50k into the pension - even if you have to do an additional transfer just before the end of the tax year and you avoid any issues.

Personally I wouldn't let it happen - if you're that close, just make sure pay everything over 50k into the pension - even if you have to do an additional transfer just before the end of the tax year and you avoid any issues

Lots of people cannot afford to do this. With mortgage costs and childcare costs s they are, even though it makes good sense financially many people cannot give up the post-tax income to do it; even when that income is taxed extremely heavily and unfairly. Hence the need for the tax system to change and be based on household allowances.

True - but I have to admit I would try and get it done by hook or by crook, purely on principal where one is earning £50k+.

When something is this ill thought out, it puts a fire in my belly to right the wrong - legally - on the system.

Especially in a two person unit, both also have the trading allowance to use to earn a £1000 extra completely tax free. If both do that - and that could be from innumerable small jobs, it's like earning £4000 or even more in the primary job because of how that one is being taxed.

Obviously this is not always possible, you're right. But if there's even the slightest chance....

I don’t think manual pension transfers count, only those from salary sacrifice. The CB is calculated on taxable income.
But you can always make a massive pension contribution change for the March payslip and then change it back in April. I am sure all employers must allow flexibility on this. E.g. up contributions to 50% of salary for last month then back to normal level eg 10%

@Lb482 They absolutely do count 👍 check the image. but definitely more hassle.

You might have to do self assessment that way though to explicitly tell them. Same with charitable contribs.

Much easier just to just salary sacrifice indeed if you can.

I wouldn't say 'underpaid' but a salary of £50k to support a family in the South East doesn't go far. Take home pay is just over £3k. Rent for a 3-bed house round here is minimum £2k a month, council tax another £300, gas and electric £250...child benefit really helps!

@mewkins ah yes the lockdown rules. They meant that I couldn't form a bubble as I am a lone parent with one of my DC aged over 18. So we were counted as a 2 adult house. But DS has a disability that means he is not like having a regular adult in the house. He depends on me, it's like having someone much younger around. If he'd actually been about 14 or 15 I'd have been allowed to form a bubble but no exception was made for my circumstances. I wrote to my MP who confirmed this and then pretty much (politely) said "tough shit".
And to the poster who mentioned widowed parents' benefits (sorry I can't remember your name), you are right. That situation is a national disgrace and urgently needs to be put back to how it was or even improved. How can anyone think that putting a grieving young family into poverty is OK?

Some of you seem quite knowledgeable about this! My salary is £55k and I have been claiming CB but only been back at work for
a few more he so have not earned £50k taxable income this year yet. My salary is going up to £60k this month. What does that mean for CB as we are not entitled with a salary over £60k? Do I call HMRC but I have also only been back at work following mat leave for 6 months.

I am the higher earner in our house and pay for 50% bills plus all food and about 70% of childcare plus 100% of extras, home improvement and what the children need. So I earn over £50k but a lot comes out of my salary even though I have a DH.

i wouldn't be happy if he claimed CB and then I had to pay it back 😂

Between £50 and £60k you would pay a proportion back. Once you go over £60k the whole amount would need to be paid back.

You need to register for self assessment and the CB would be paid back through that. Does your dh earn a lot less than you?

@Dontbelievethenarcissist yes unfortunately you will be asked to pay back a portion (maybe most) of the CB you have been claiming since you been back to work

id ring them asap to reduce the payments so that you don’t get an unexpected bill from HMRC next year

and yes when you hit £60k you will lose CB

You can't reduce payments. You can still claim over £60k but it would have to be paid back by the higher earner. Alternatively there can be a claim but you opt out of getting the money so nothing to pay back.

@dementedpixie oh yes u explained that far more articulately than I did !

How much pension do you pay? You would be best off putting £10k (16.7%) now into a pension to bring you down to £50k taxable income. That was you are putting £10k into the “future salary pot” as that is essentially what your pension is. If you don’t then you lose 43.25% to tax and NI and 11% paid back for the child benefit (on first child, as £1133 is reduced proportionately up to 60k), so 54% effectively. So why take home ~£54.6 when you could put £10k into your pension - plus potentially additional employer matching %…I am guessing anywhere between 3 and 15% depending where you work.

your pension, if invested right, will also rise faster than inflation so £10k today will be worth more than that in comparable terms when you retire.

keep doing this every pay rise up to £90k and learn to live on £50k if you can (with current living costs) as £40k is max you can put into a pension per year. Unless the government is ever kind enough to change these boundaries…..!

Never thought of Thai, but yea it is unfair on line parents

This 👍👍👍

It's really unfair on single parents. I receive no maintenance and a lone parent on just under the threshold so I get CB for now but probably not next year when I get a salary increase. It irritates me that my friend and her husband both earn around 45 so will continue to get it with 90k coming into their household, I don't see the logic and how that is fair?
I work hard and for those saying 'lucky to earn 50k', you wouldn't think a family both on 25k each were wealthy. I have to work hard as I am the sole provider.

I direct your anger towards whoever you had a child with I’m pretty sure you could get more than £15 a week if you set your mind to collecting that

I disagree, because two people each bringing 25K for a full time job are working twice as long in total than you are earning 50K.

I don't think any family who earn close to double the national average should be getting child benefit at all. I agree that total income should be counted, but the cutoff point for being eligible for child benefit should be much lower - a family bringing in the national average wage would be a sensible starting point.

Child benefit should be means tested like other benefits are. It's ridiculous that high earners like you should be subsidised by the taxpayer when there are people in full time work who are really struggling.

I feel it is unfair that a household with more income than mine gets CB. That is my issue. Your comment makes no sense, I am talking about household income not how many hours the household works. I would not like to receive it at the detriment of lower earners but feel higher household incomes should not get it. If you cap it at £50k fine, but that should be household income. I know so many people who just put it in their kids savings account as a little extra.