To be pissed off about paying back child benefit

[pinotnow]

I am in a sector that was awarded a pay rise this year - though our union is fighting for a higher one. The rise was from September but our school (yes, it's teaching) didn't pay it until November when we got months at once. HR always send us a pay statement at this time of year and I have just opened mine and seen I am now on approx £52k (been teaching 18 years and am head of a core subject in a large secondary school). I understand I now have to pay back some of my child benefit. This is a pisser as things are pretty tight and I'm a lone parent who gets no CM (ex is a total waste of space - I've gone through CMS). Also, I wasn't expecting it this year (I was on £49k last year and now I'm worried I've missed some sort of deadline for paying it back as technically I've been on this for 5-6 months, but only just realised.

I really haven't got the head space for this now and a quick Google has just brought confusion. As soon as you move forwards a bit in this shithole country you move backwards it seems. Any advice would be great!

Certain people are going to be furious if/when the government increases free nursery hours

www.theguardian.com/politics/2023/feb/10/treasury-considering-huge-expansion-free-childcare-england

Some people are going to be even more furious when the government runs out of funds and the country goes bankrupt due to becoming a charitable organisation with no understanding of its pocket depths.

Let me say it again:

The country has no viable economic future if it doesn’t invest in its children.

'Investing in children' is on no way connected with artificially adjusting one's income to obtain a state benefit. There, I've said it again also.

@zax You really don‘t get it, do you? Free nursery places should be considered as a benefit to children NOT ADULTS. The adults (and their income for that matter) should be left out of the equation.

@messybutfun No, @Zax doesn't 'get it.' They don't want to 'get it'. They don't sound the most, urm, mainstream in their thinking. I wouldn't engage.

This is why income tax allowances and all of these thresholds need to be changed to be on a household basis as they are in many civilised countries.

Women campaigned for years to be taxed as individuals, it used to be by household. It allows women financial independence. We should have the same with all welfare benefits.

That is fair and far more sensible, given the purpose of it. And also the fact that means testing it costs more than providing it for all children, so is utterly pointless.

I'm not convinced the balance of the budget is quite so precarious at 100k as it is at 50k, even in areas like the South East/London. No one is struggling on 100k, even as a single parent. Tax free childcare is a totally separate issue.

Of course a single parent on £100k can struggle! 🙄 That salary means net pay of £5564 if you make zero pension contributions. Rent/ mortgage in many parts of SE on a modest property suitable for a family can easily be £2500+. Childcare for two children can be £2000+. Leaving £1000 if you are lucky for all bills, food, car/ trains, clothes, etc. In many parts of SE the rent and childcare would be even higher than that. Some people seem to have no idea that to earn the higher salaries obviously people usually have to live in areas where the cost of living is also much higher.

Why should a single parent in that position get no tax free childcare, not get the subsidised nursery hours, and be paying way more tax than a household with the same income but two parents to share earning/ childcare so far lower expenses? It's clearly grossly unfair for any of these thresholds to be set on a single income basis rather than a household basis at every level in the system, whether it's the tax free allowance, higher rate tax threshold, child benefit threshold or whatever. It's completely illogical and very deliberately discriminatory to single people a in particular single parents.

Leaving aside the windups and shit stirring for a moment, that's a very interesting policy proposal.

They did but the situation was very different then: women could not own property in their own right, were very restricted with careers, had few avenues to leave abusive relationships because they could not have bank accounts or mortgages in their own names.

Things have changed and the tax system needs to reflect that. The current situation massively penalises single parents (almost all women) and actually makes it much harder for people to leave abusive relationships. It is also one of the main contributors to our very high levels of child poverty, much of which unsurprisingly occurs in the single parent households almost all headed by women who are penalised by this tax system.

The quickest and easiest way to make a huge difference to these problems would be to equalise the tax system so that income tax and all of these other thresolds are set on a household basis as they are in France, Denmark and many other countries.

Within a household with two earners it would obviously be up to them to agree how they split the allowances between them if they have separate finances, with the default being that 50% is applied to each unless they both agree otherwise. But there is no rational argument for them having double the allowances that a lone parent has, who is already doing twice the work and will therefore inevitably have higher costs.

WulyJmpr
Certain people are going to be furious if/when the government increases free nursery hours

https://www.theguardian.com/politics/2023/feb/10/treasury-considering-huge-expansion-free-childcare-england

Yes it's about time that happened as well. It's a no brainer. It pays for itself in the long term because you do not lose women (taxpayers) from the workplace who end up with such huge employment gaps that even if/ when they do rejoin many do not reach their earning (and therefore taxpaying) potential, and therefore also require more state support later in life, as well as during child-rearing years.

Countries (almost all developed ones) that heavily subsidise childcare so that it costs a maximum of a couple of hundred pounds per month don't do this out of the goodness of their hearts. They do it because it's been proved to be good economic sense.

This is also just such an obtuse comment I cannot get my head around it. If your idea was implemented then someone married to a billionnaire who decided to be a SAHP could claim universal credit. 🤣 It's very obvious that what matters is the overall household income.

It is not obtuse. It gives women more financial independence.

I've just explained to you why it doesn't. It actively inhibits women from being able to leave unhappy or abusive relationships.

I also explained how it could function within a relationship so that each partner by default was allocated 50% of the household allowances unless they decide to sign a document specifying a choice to the contrary. So it would not result in any loss of financial independence. It would simply remove the inequality whereby single people are taxed far more on the same household income.

But you do not know what the allowance is without accurate sharing of earnings and income. And why should a woman earning less have to pay more tax proportionately than her higher earning husband because he is in a higher tax bracket? That only works if they share all earnings and lots of threads on here show it is common not to.

Wait wait wait. If my net salary is over 50k but pension contributions leave my gross salary under 50k pa does that mean the child benefit tax doesn’t apply?

Correct it's based on your P60 which doesn't factor in pension contributions

She won't. She can keep her share of the household's allowance as will he. The difference will be that a lone parent isn't paying additional tax to compensate for the higher earning partner in the couple (husband in your example) paying less.

Yes.

Also money you donate

And no, sharing of detail would not be necessary in couples if they don't wish to. It would simply be that the tax free allowance, the amount that you can earn before higher rate tax kicks in etc is set per household. Therefore a oart of a couple your share of whatever level that is set as is half of it - regardless of what the other person earns - unless you agree otherwise to sign a form to split it differently because you decide that would be more beneficial. It would simply mean that each household gets a fair share of earnings without tax applied or at lower thresholds. It would not mean that people have to share their finances or details of them in a couple if they don't wish to, it would simply remove the unfairness of them being taxed less on the same overall income.

On that subject, some of the examples in this article are relevant.

www.theguardian.com/business/2023/feb/13/full-time-part-time-work-no-longer-pays-uk-economy

@BashirWithTheGoodBeard that article is absolutely spot on, about how these disincentives penalise people at every level of the tax system.

Refund of expenses being considered "income" and resulting in a reduction in universal credit is completely bonkers. As are all of these artificial bottlenecks at all levels of earning. The last one in the article talking about the 62% tax rate also shows one of the worst ones. And that's without a student loan, or childcare allowances being lost. If you add those in then you will be looking at an effective tax rate of between 75% and 85%. Why would anybody bother? Totally barmy as it is the treasury who loses out in the long term by creating these disincentives. Fixing this should be their number one focus if they had any sense but they don't, obviously.