To feel like the government is robbing me via taxes... Child Benefit and single parent income

[oreo2020]

I am a single parent of 2 teenagers, live in London and have a professional job. The last 2 years have been so much harder financially, to a point where I am now doing a vocational training so I can work in the evenings / weekends to top up my income, this is on top of my challenging, long hours, civil service role at Grade 7. As I earn over 50k (but below 60k), I have to do tax returns and pay a big chunk of Child Benefit back.

I've just looked at inflation.. so CB for higher earners was introduced in 2013. The value of £50k then in 2013 is equivalent to £66.6k now, according to Bank of England Inflation Calculator. As a civil servant I barely had any pay increase since. There is £1500 one off pay that's coming for civil servants... when I deduct 40% tax, NI and the child benefit I will have to repay in relation to that, I get £650 worth out of £1500, for fuck's sake.

The government has shut down all attempts so far to increase the threshold or equalize it for single parents. It's just so unfair as I am trying my best to keep my head over the water. AIBU?

The limitation on child benefit for those earning over £50k was the first in a raft of austerity cuts. I don't think it was accidentally arbitrary and unfair in it's application, I think this was built in by design and the resentment that followed by higher earners made it easier to shuffle through harsh and painful measures on the poor and the disabled.

It was and remains a useful tool to disinvest higher earners in the health of the social contract.

I do think it is unfair. And I do think it should be a universal benefit. And I don't think the obvious gaps in the fairness of the application is an oversight.

YANBU. CB should have stayed a universal benefit, like the pension. This scheme is simple ideological, it saves the government next to nothing and causes a huge logistical nightmare.

Do people still think someone earning 50k is rich?

50k for a whole household income in London is far from rich. Why does everything have to be a race to the bottom all the time?

Quite apart from any of the other unfairnesses of the CB set up, the fact that the £50k threshold hasn't been raised even once in the last ten years is grossly unfair

Yes but some costs double with 2x adults in the home. So whilst 2x £25> 1x£50k in terms of take home, a household with 2x working adults earning 25 k will have double (est):
Mobile phone bill
Commuting costs
Clothing / personal care costs
Dentist/optitians costs
Travel/holiday costs

You cannot simply compare 2x £25k income with 1×£50k income and say the 2person household is better off.

CB shouldn’t be means tested at all. Not when nursery is so expensive. And before anyone starts, only say it should be if you also think DLA and pensioner related benefits (fuel allowance, bus pass) should be as well. There has to be some perks to working full time, looking after small children and funding everyone else.

@BernadetteRostankowskiWolowitz fair point about 2 people's costs, I accept that.

Plus the single person council tax discount.

This 100%

Especially as it has cost more to administer the changes than it would have cost to just keep paying it universally.

Why should single parents be exempt?

Single person discount is shamefully unfair - should be 50% deduction not 25%

@BernadetteRostankowskiWolowitz You’ve put a lot of very discretionary spending on their - you can’t use the cost of two people going on holiday rather than one to claim “oh see their income doesn’t go as far” - especially as self catering tends to cost the same whether you have two adults or one in the accommodation.

Have you looked at minimising the amount you need to pay back by upping your pension contributions? Especially as CSP is defined benefit. It may be more cost effective to do that if you are on the borderline?

Because we are carrying the cost of the whole household - because we only have one person’s untaxed income.

But I think it should be universal anyway.

Was it not to show that higher earners were also being affected by austerity, so the burden of benefits cuts was shared across the spectrum of earners. In 2012 £50k was a brilliant salary. Obviously, whilst a good salary it is not in the same ballpark as over a decade ago.

@EsmeSusanOgg I did think of it but I never have spare money to put aside for additional pension, having said that I do put most of CB aside as I know I will have to pay it back. It's just the monthly cash flow never seems to work out in my benefit, to put any money for pension aside.

@TheSeaDoesntKnowMyName don't think a single parent should be exempt, the least should be done is the threshold raised to be adequate to inflation, and perhaps the threshold should be for household not an individual earner, so say if a household (a single parent OR two parents) earn above £65k then the pay the CB charge.

It's worth having a look, you should be able to up your contributions before tax - bringing down your overall taxable income if not below the HICBC threshold then closer to it. Meaning less has to be paid back. There's a few guides on this from the Civil Service Charity and there's bound to be some whizz in your department who has worked out the sweet spot in the figures.

I'm with you OP, when I went from G7 to G6 I was only £200ish better off due to pension contribution increase, tax increase and loss of CB, but much more responsibility. What's not fair about it is the fact the higher tax rate and CB hasn't been reviewed in a long time, despite wage inflation.

It's a stealth tax and a way offloading a number of benefit recipients.

I completely agree with all of this apart from the last sentence which assumes the only motivation for career progression is financial.

My solution would be to give single parents double tax free personal allowance although how this would be administered I have no idea. I imagine it would be a nightmare.

Only the holiday is truly discretionary.

Why else would people want to progress their career if its not financial reward?

The higher up you go the more stress you are put under, other people bring their problems and issues to you.

Sometime you watch people in low paid jobs, cutting grass or whatever and think maybe their is a benefit to that sort of job, cut the grass, no real stress.

Not stressing where money has been lost on a spreadsheet. And the 1000s of questions where, why, who's fault?

As others have said, you need to pay additional pension contributions, with tax relief on those you only lose £80 in take home for every £100 so you could keep child benefit and lose less take home than you think.

The most logical way to solve it is go back to having CB as a universal benefit or they'll always be someone feeling hard done by.

They need to be careful it doesn't become a middle income reason not to.take a step up, more stress for little extra reward.

Children cost money, teens don't even benefit from tax free clothing, and they are expensive to feed.
It should be a universal benefit

YABNU. The child benefit deduction not being based on household income is a joke. It hammers single parents. I believe it was set up that way so it was easier for the government to monitor as opposed to using a threshold based on household income. But its a fucking joke.