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??!

Absolutely agree. I wholeheartedly agree that a household income of £x amount should stop receiving CB but it's not fair if it's based on one earner.
And while we're on a CB bashing thread it also infuriates me that my second born twin gets less than his other first born twin! Born one min apart but he's my second child so gets the lower amount. As far as im concerned they're my first babies. Not my fault two came out at once!

I wonder what they would do if you had a section and somehow lifted both out at the same time. 🤣🤣 Kidding, I know it wouldn't work like that. It all does seem arbitrary but I think when you dig deeper and look at the whole system it is deeply misogynistic and set up to penalise women. Especially single mothers who stick around to raise their kids and try to do the job of two parents. Whereas as we all know the CMS system is as lax as possible, because that mainly impacts men.

It doesn't seem like an accident that it's all set up this way and it makes me really angry. Especially when a large proportion of children in poverty live in single parent households. If tax and CB and childcare etc were all assessed on household income, that would be one simple measure to massively improve that situation. So you have ask yourself, why is nobody campaigning for it, why are no politicians even discussing it?

And why is Mumsnet not launching a campaign for that? It's on very tangible issue affecting women and children's quality of life that could be fixed fairly simply as it's a matter of law and maths, not as complex as stamping out general discrimination, sexist attitudes etc. I wish someone would take this up and push for it. Sadly single mums are probably stretched too thin and too overwhelmed already to do so, so you'd hope organisations would do so on their behalf.

It is because ten million cb claimants would have to move into the UC system in order to begin assessing household income.

The government claim it would cost more than it would save.

Let's face it, no one would end up with more, it would just make people feel better to see it removed from households they felt didn't deserve it.

I'd like to see a campaign to increase the amount you can earn before beginning to lose cb as that's been the same since 2013.

It’s totally ridiculous and absolutely indefensible.

So, if you are in a position to do so, you get your own back.

If you earn 50-60k, and you can afford to - bung everything above 50k into a pension, preferably via salary sacrifice. You get tax relief, NI relief and your child benefit back. Hugely efficient - especially if you have more than 2 kids it’s an absolute no brainer.

Indeed it is probably worth doing all the way up to 70k or more, because the hit in the 50-60k band is so horrible. Of course, you have to be able to afford to live on less now…but the sense of satisfaction is worth it because the system is so unfair.

to the people saying ‘how can 50k be underpaid’ … 🤦‍♀️

50k can be very underpaid, depending on the job. There are jobs out there who’s market rates are 100s of thousands, and yet some people who don’t know any better get stuck in a role with a boss and a manger who keep telling them ‘no budget for rises’ etc. And these people stay in those roles out of caring and principles and because they don’t want to move etc.

it is perfectly possible to be exploited on 500k, if you should be being paid 5 million for your skills based on the wider market!

Oh and the government/HMRC find it perfectly possible to means test tax credits and UC as a household. So why is child benefit different?

It is because ten million cb claimants would have to move into the UC system in order to begin assessing household income.

The government claim it would cost more than it would save.

It's not just about CB. It's about the tax free threshold and higher rate tax threshold and threshold for losing tax free childcare etc all being halved for single parents. Not acceptable. Yes it would take a little work to set up the IT systems but not much given as you say the platform for assessing based on household income exists already. It needs to happen. There's plenty of money to squander on useless things, this would cost peanuts in comparison. "It's discriminatory but too expensive to fix" is not acceptable obviously, and also illegal.

Anybody who cares about the rights and welfare of women and children should be up in arms about this and emailing their MPs.

I read of someone who for every £1 they earn above 50k loses £1.1725 of net income. They are literally better off on 50k than on 60k

40% income tax
3.25% NI
33p lost per pound in child benefit clawback
41p per point lost in tax credits clawback.

insanity!

They have 4 kids, 1 severely disabled. So they have a very large child tax credits award, which they lose AND the child benefit.

the system was designed by idiots.

The system is stupid. Better to get rid of it altogether and put the money into tax breaks for or subsidising childcare. Even SAHPs need childcare from time to time, so it would help everyone.

The tax system needs fundamental reform though. It could be made much simpler and that in itself would save the government money in administering it. A good start would be doing away with employee NI and combining it into income tax.

You could just exempt single mums from the cap up to £100k. That would be straight forward. At the moment the system relies on people reporting for self assessment and paying the child benefits high income charge so the change would be minimal in terms of administration.

would be good to see any party actually do something for single mums instead of treating us as a scourge on society.

Or single dads, but absolutely.

Nothing will change. Remember the government minister for work and pensions themselves didn’t understand their own benefits system when they said after the £20 per week UC rise during the pandemic was dropped.

’You can just work 2 hours more on minimum wage to get it back’.

They didn’t even grasp that the taper rate on additional earnings means the person would need to work 8 hours to earn £20. These people are incompetent, at the highest levels.

Yes but:

(1) over 90% of single parents are women and

(2) we have vastly different attitudes to single dads than we do to single mums.

I agree that all single parents are equally deserving of respect and assistance but my point in respect of political parties doing something for single mums is also about how they perceive and treat single mums. Single dad’s are often seen as responsible and respectable heroes whereas us single mums are feckless slags who couldn’t keep a man. It’s deeply misogynist.

We should be treating all single parents with respect and recognising the value of the work they do. Instead we are seen as some kind of dirty underclass that is to be discouraged.

Fair points 👍

It wasn't. I've already gone over why it was introduced a few posts back.

It was to keep children in education longer so families didn't have to send their children out to work during the 50s. They eventually rolled it out to all families with school children.

I'm not sure they could have been getting tax credits even if they did have a disabled child if they didn't receive child benefit?
Tax credits are means tested and im pretty sure over a certain amount even with the disabled child element you can't claim the DLA isn't means tested so as long as the child fits the criteria they would receive it
My son has been getting Dla since he was three, and when we first applied were not entitled to any tax credits due to earning to much, I was a staff nurse and my dh worked in a factory, so not on huge wages, we still got child benefit though, iy was only when I gave up work we were entitled to tax credits.

It’s not fair. IMO it should be based on both incomes not one person earning over the threshold.

"Apparently not automated enough given that if you're over the max earnings amount there is not automation in adjusting the CB you receive or stopping it because I've read you have to complete a self assessment tax return and send back?!
Even if you're not self employed which seems mad!"

Because it isn't that simple. Its often paid to the lower or non earner but will be repaid by the higher earner. So by automatically adjusting or stopping it you are affecting the lower earners income.

It's also important to be able to claim it (although you can claim it and opt out of of receiving payment) for ni credit purposes if you are a non earner.

You know not all of these people get £50k don’t you? Especially not when they’re newly qualified 🙄

sadly - you are incorrect. It’s absolutely the case.

go to www.gov.uk/tax-credits-calculator

enter:

• family - 4 kids, all born before 2017, one with severe disability (higher rate DLA/PIP)
• One parent working - hours 40 per week
• Salary - try 20k,50k,60k

you’ll find that the family gets an award of

£1300 every 4 weeks at 20k
£330 or so every 4 weeks at 50k
nothing at 60k

Then goto the child benefit calculator (the two things are not linked) here.

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

only 50 and 60k are needed. At 50k - £3300 in child benefit. At 60k - zero.

The two benefits have no interaction - I.e income from tax credits is not counted towards adjusted income.

www.gov.uk/income-tax/taxfree-and-taxable-state-benefits

strangely - I know what I’m talking about on this. I study the tax / benefits system as a hobby. It is full of these ridiculous marginal rates.

The fact it doesn’t go on household income is beyond ridiculous. Almost every other benefit manages it. It hugely penalises single parents too which infuriates me. I have no skin in the game, we both earn under £50k and I’m not a single parent but I can see the injustice for others. It should be household income.

They seem to get a very high rate of tax credits even with a disability element ,my son gets the highest rate of DLA in both care and and mobility ,we get about £700/ month child tax credit ,s , OK we only have two children ,but my dh earns just over minimum wage ,I wouldn't always rely on benefit calculators tbh ,they can often seem very generous, compared to the reality

So for the family I described - pension contributions in the 50-60k band are more than free.

they are better off by 17.25p for every £1 they sacrifice into a pension.

crazy, but true.

it is the case. Believe me! The calculator is spot on, and confirmed by HMRC.

This isn’t some fly by night ‘entitled to’ calculator for universal credit - which is far more complicated. It is the official calculator.

believe what you want though.