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!

Give me strength. Why should we all pay for your kids if your husband won't? I'm tired of the sense of entitlement. Pick better partners or if you can't do that, pursue them through the courts to make them pay. If you're earning over 50k, you don't need handouts.

@BarbaraofSeville
The arts are pretty vital to this countries economy and long term prosperity, and indirectly some of the roles save lives, through communication in the public and charity sectors.

The problem with that argument is that one of the logical consequences is some people ensuring they don't earn over 50k. Basing policy is matters like this on one's feelings about entitlement isn't particularly sensible. The question needs to be how much of a difference perverse incentives like this make, and whether we'd be objectively better off removing them or not.

It isn't such an issue when people respond by just paying extra into their pensions, indeed its arguably a net positive. When they respond by working less or not going for a promotion, however, that's when it becomes a problem.

It would be a bit short sighted to not go for a promotion just because it put you above the 50k threshold, seeing as that in another few years you're likely to be able to go to the next level up, most promotions being a stepping stone in a career. Also as it tapers off from 50-60k surely you're still better off with the pay increase, even if you do miss out on part or all of the child benefit

Couldn't agree with you more. It's a thought process that exists widely in our society, especially amongst those with no sense of commerce, such as civil servants.

It makes no sense to not take a job that goes over the £50k though as it is stepped from 50-60k (1% of the child benefit for every £100 over £50k I think). What seems wrong is that single parent families lose out when a household earning double still gets it, however I feel that everyone who wants to claim it should be able to regardless. It was never supposed to be a means tested benefit. It should probably be reviewed in full, doing it this way is a half arsed effort really.

That was worded badly, everyone earning the same household income should be able to claim it under the current system. It was only a hit for those earning over £50k when the new rule was brought in really, esp a £60k one parent family but anyone now going over the limit isn't really affected.

In reality there is no need for any benefits for people earning over £50k.

Not only is it a generalisation that most promotions are a stepping stone, but also the financial side will depend entirely on what a person would need to do in order to get that promotion. In some cases this will include extra costs of working such as more childcare. It's certainly possible that these extra costs would be higher than the extra pay rise less 40% tax less tapered CB withdrawal.
So even if you're basing your assessment purely on finances and not factoring in the value a person ascribes to their time, which you shouldn't because people's mileage on that one varies, it's still just not correct.

Child benefit is unlikely to be the only factor in making this decision though. If it was then any increase in salary is worth it. People often say the same about going into 40% tax bracket but obviously as this is only on the bit above the limit you're still better off in most situations.

I haven't gone for promotions at my work because I would have to travel into the office more, plus would have to pay for daycare. I would be earning less based on these things, the child benefit being a sliding scale makes little difference really.

It's everyone's own decision surely but I don't really believe that people wouldn't take a promotion for having to pay back child benefit which would be below the payrise amount as it is on a sliding scale.

It isn't the only factor no, as there's the 40% tax bracket too except in Scotland where it's lower. But why do you think that means the tapered withdrawal of CB couldn't be the straw that breaks the camel's back? Your view seems to be that you don't think that so nobody could.

Ultimately, it's just not correct to generalise that people will always be better off taking the promotion. People have said that several times in the thread and it doesn't get any more true with repetition.

No my view isn't that at all. I said child benefit on its on shouldn't be an issue, piled on top of other things is different. But let's not forget we are talking £50k+ salaries here, not minimum wage.

I haven't said you are always better off taking the promotion, I said taking into account paying back child benefit you would be. I have said I wouldn't take promotion due to all the other factors which would make me worse off, these things aren't stepped they are literally just paying out more expenses to take a promotion.

Exactly this! The extra expenses for working more (travel / childcare etc) would exist with or without the benefit and are a separate consideration.

They would be the much bigger factor I think than the slight reduction of benefits

It sounds here like you're saying that the increase in salary will be higher than the decrease in child benefit? If that's all you're looking at, you're doing it wrong. Half the picture and completely pointless. @Ilikepinacoladass is wrong to say they're a separate consideration.

I'm not sure where this 'should' has come from either. Who decided that, and why are the people for whom it would be an issue in the wrong about their priorities? The fact that we're not talking about people on NMW is irrelevant: you presumably don't think people who aren't on NMW don't weigh up whether they think a particular course of action is financially worthwhile for them or not.

Ultimately, some of you seem to be attributing far too much weight to your own personal calls about what's sensible and worth it.

The original post was talking about purely the loss of child benefit being over £50k so it is relevant. The increase in salary IS higher than the loss of child benefit, the increase in other costs relating to a potential promotion are a separate discussion. Some people take a promotion without all these additional costs, if they are at the same office, same hours. That's not particularly unusual.

Of course it is a separate consideration, you're turning it into a more generalised conversation about working more being worth it or not, when the original thread was about benefits (child benefit to be specific)

The direct quotes that I take issue with from both of you are here:

Also as it tapers off from 50-60k surely you're still better off with the pay increase, even if you do miss out on part or all of the child benefit

It makes no sense to not take a job that goes over the £50k though as it is stepped from 50-60k (1% of the child benefit for every £100 over £50k I think).

Both of these are wrong because they're based on generalisations and only half of the picture. You cannot say that you're better off with the pay increase because even assuming you mean financially only, that leaves out any extra costs that might need to be incurred to get it. Nor can you say it makes no sense not to take the job because the withdrawal is incremental, for the same reasons.

It's absolutely not a generalised conversation about working in general being worthwhile, it's a conversation about whether it will be for some people who are going to lose child benefit. That isn't the same thing. There's a bottleneck at 50-60k, particularly for those with dependent children, and the existence of that bottleneck makes it different to other decisions people might make where there's no bottleneck.

Nor does the fact that some people can get a promotion (or a wage increase without a promotion) without any extra costs negate the fact that others can't. It's not either/or.

Those comments were in the context of a thread about child benefit decreasing after 50k

And whether that means people will be a factor in people deciding not to not work more / take promotions.

There are a myriad of considerations for taking a promotion.

My point is that the CB tapering off isn't a big one of them.

It's a bad point. Because what you actually mean is that it wouldn't be for you and you don't think it should be for others. You can't substitute your own value judgement for the ones other people might make.

Ah yes of course they do. The ones who don't have to pay additional childcare costs because there is a SAHP taking care of "all of that". I.e. 98% men. Ok then.

There are lots of considerations whether to take a promotion/ work more. Financial, family, career etc etc . My point, and topic of this thread, is that child benefit decreasing isn't a big factor because the financial difference is negligible as it tapers off the more you earn, and you will still be better of financially than if you didn't take earn more.

A promotion doesn't always mean more childcare costs? In the OP they were just getting a payrise, not working more hours

This makes no sense at all TBH. I've given my opinion, which is what MN is all about, I don't need to argue over and over again about irrelevant points.

And once again, that's a bad point.

There's no 'you will be better off financially' about it, because the things that some people will need to do in order to get into that position will financially outweigh the increase in salary.

Your view on whether the loss of child benefit isn't a big factor is also not the determinative one. There are going to be some people for whom the amount they'd get after the higher rate tax etc would still make it worthwhile for them but their value judgement is that the CB loss is the point at which the effort outweighs the reward. They'll act based on their value judgement, not yours. It isn't for you to decide that someone else is short sighted.

'still be better off financially' - in regard to CB! That is what this thread is about.