High Income single families losing Child benefit

[ReturnoftheMe]

Hi there - I know this has been talked about extensively over the years, but I wondered if anyone has been following the topic and discussions around it in parliament for the future? Are there any changes to come for the next budget?

I am a single mother with no input from my 2 kids father. I live in London work full time and currently cannot afford to put my 2 year old in nursery as fees are too high, and I am not eligible for any help (fees are 2k + a month in my area). Luckily my mother has stepped in, but without her I'd have to claim benefits and not work, or I'd have to dial down my ambitions and go for a part time job which puts me at a disadvantage in my work place.
This year I will gratefully receive a bonus that just about puts me at the point of not being eligible at all for any Child Benefit down to the penny. This really bothers me because all the families I know all receive it still. Some really high earning self employed couples who manage to complete tax returns that keep them eligible and even my own brother, both him and his wife earn 50k and 46k respectively and they still get CB for their two boys.

When is this going to change in order to be fair for single mothers like myself? I cannot afford nursery and I also do not get any child benefit. Something is incredibly wrong here.

Am I being unreasonable to feel as though this is unfair to single mothers?

From April your 2 Yr old can get 15 hours of funding, plus use tax free childcare which is 20% paid by the government for the balance. That's quite a lot I'd say!

@Sd1960 50k is higher than the average salary, but in this instance it is unfairly classed as "High Income" when it is not, in places like London.
@kittensinthekitchen I mean increase the tax threshold for single parents but keep it the same for couples. Perhaps 80k might sound more fair?

@MintJulia it really does not sound as wonderful as people think does it and certainly feels like they stick the knife in the more you try to better your circumstances as a single mother. Better you do keep the health insurance considering your current status. Wishing the best with it. Glad to hear also that you have a home. I have to rent privately as I am not eligible for government assistance of course. My dreams of buying a home one day for me and the children seems so far, far away. My only chance is if one day their father steps in and steps up.
@KateyCuckoo... my son turns 3 in Feb, so he should eligible for 30 hours after that no? Literally cannot wait for that. my mum is 68 and she is really doing everything she can and beyond to be the other parent for my kids. I owe her so so much, and I really do feel incredibly blessed to have her support, so the childcare element for us is hugely important so she can get a break.

Again, I know I am luckier than most so I hate to sound like I am complaining, but I am being penalised for having a high income as a single parent when that is false.

I have never understood why it's based on a single income rather than a household income.

YANBU. I don't understand why two parents earning £99k combined is fine but one parent earning what you do means no CB at all!

Could you:

• Stick all your bonus into your pension
• Increase student loan payments till end of the financial year
• Take bonus but increase pension contributions to the end of the fiscal year?

We had something similar happen this year around tax-free childcare due to an unexpected bonus. Had to send a letter to HMRC & Tax-free Childcare Services but it was sorted in the end.

I have sympathy for sahm unmarried mothers in a relationship, in situations where their co hab partner is the high earner and they don't get child benefit. How does that effect their pension? I used to work in the UK and I rang up about it recently and to my surprise, the time I'd been in receipt of children's benefit counted in my pension forecast.

They need to get back to work.

@OttilieKnackered definitely. This is discriminatory towards single parents. But having that high an income is a problem many of us would love to have

It is really unfair and that is why it used to be universal. You are just really unlucky.

The birth rate is low again, I reckon Government will soon be having to offer tax incentives to all parents to have children. In some other jurisdiction you get eg 10000 free tax allowance per child that you have. We need that here.

SAHP’s can still be credited toward their pension even if they don’t actually receive Child benefit.

Yanbu. It's an exceptionally foolish system, and I say that as a beneficiary. Our household income is a fair whack higher than yours, but we still get full CB to go along with our two personal allowances. This was always going to happen when the Tories decided to stop it being universal though, and I've never yet seen any evidence that the enforcement costs are less than the saving. Although with inflation and fiscal drag, presumably that will happen at some point.

@Ohnotyoutoo I am going to have to work it out and see whether it make sense to sacrifice the bonus into my pension. Would have been nice to see some of the money though, especially at at time like this.

How would I increase student loan repayments in advance and how does that benefit me?

I'm on £49k, next year if I get any increase in salary I'll be tipped onto the sliding scale. I've worked hard to get to where I am in my career and feel as if I'm being seriously penalised for doing so.

For reference I was an unemployed young single mum on benefits, put myself through university, bought a home and still feel as if I have the same spare money as I did way back then. This isn't a benefits bash it's a dig at how the world and the financial structures of it are all set up for couples, and screw working singletons.

You don’t need to do it on joint income. Keep couples the same as it currently is (for privacy or whatever). Then you can provide evidence of being single (is the council just a self declaration?) in a similar way to universal credit and then there is a higher allowance.

i don’t see this being a huge administrative burden.

*I would also include where one person can’t work due to caring, they probably will be getting PIP(?) or similar and therefore should have the single person allowance for the other earner. Stay at home by choice is different.

Could you ask for your bonus to be split across 2 tax years? Have half in March and half in April?

Similarly though, couples are also at a loss when the high earner just earns over the threshold and the lower earner earns just over £10K for instance, often putting them at a lower salary than a single earner on £65-70K with one extra mouth to feed and clothe; maybe an extra car in the household too for work purposes? Who knows but one thing is for certain, the threshold needs upping significantly as £50K is not that high a salary in real terms.

@MumblesParty had not thought of that.. might be worth looking into.
@Æthelfled well done to you for achieving so much on your own. I too put myself through Uni to better my earnings and I am not seeing much difference at the end of each month. I think perhaps my expectations were too high and I didn't for see things like this.

@OhBeAFineGuyKissMe I don't see it as a huge administration burden either, but I have just looked on the petition site and seen the ministers response to the petition on December 18th, and it looks like nothing will change... I will just have to keep doing better to increase my earnings to the point where it it stops feeling so unfair.

Government response:

"The HICBC is calculated on an individual rather than a household basis, in line with other tax policy. Basing the HICBC on household income would require all of the 7.7 million households currently registered for Child Benefit to regularly report income data, for HMRC to verify household income and ensure compliance with the charge. This would complicate the process for the majority of Child Benefit claimants who are not liable to the HICBC. The Government therefore considers that the current approach remains proportionate, as it only requires a proportion of individuals to complete a Self Assessment tax return, whilst leaving the majority of claimants unaffected... As with all other tax policy, the Government will keep the HICBC under review. Improvements to the HICBC have been announced as part of the Government's commitment to a simpler and fairer tax system. On 28 April, the Government announced that steps will be taken to allow parents to receive a National Insurance credit retrospectively. This will ensure that parents who were eligible to claim Child Benefit but who chose not to are able to protect their future State Pension entitlement, reaffirming the Government's commitment to supporting all parents.
Similarly, on 18 July, the Government announced that steps will be taken to enable employed individuals to pay HICBC through their tax code, without the need to register for Self Assessment. This will make the process of paying HICBC easier for individuals who become liable for the charge.

HM Treasury"

In a nut shell, they don't give a shit, single mums earning £50k should shut up, count themselves lucky and nothing will be done.

Parliament debated this on 18th Dec and they decided to keep the system as it is. They said “CB is calculated on an individual rather than a household basis, in line with other tax policy. Basing CB on household income would require all of the 7.7 million households currently registered for Child Benefit to regularly report income data, for HMRC to verify household income and ensure compliance with the charge. This would complicate the process”

So basically they can’t be arsed to calculate household income, which means some families miss out.

It’s hugely unfair and discriminatory to lone parents.

The only reason why more of a fuss has not been made about this is because the vast majority of lone parents are on low incomes so the number of lone parents affected by this is relatively small.

But that does not make it right.

It might not be a huge salary in your estimation, but a huge percentage of the population live on half that, if they are lucky.

I had thought that as student loans come out before your salary has been paid then your gross salary might be lower if you increased payments. Not sure how it works or if it's possible a lot all.

Unfortunately you'll have to take a hit somewhere along the line if you want to be under the threshold again. Increase pension payments, or some sort of other salary sacrifice-type deal.

It's rubbish though. Such a bum deal that it's all or nothing.

One way to get you extra income would be to claim child maintenance from the father. It should be more than the child benefit and non taxable.

Yes if he's 3 next term then he'll get 30 hours after Easter.

This is decent no?

You've hit the nail on the head.

I find the tax argument odd as it is a benefit not a tax. And other benefits do take into account if you are single and council TAX has a single person discount.

So, don’t do it as a joint income but as a single parent extra!!!!

They need to know how much you earn in order to administrate child benefit. HMRC already has records of how much individuals earn. But they don’t have records of combined household income. What they’re saying is that it would be too much hassle to collect this information.

I’m arguing that they don’t need to. Just declare (with some proof if required) that you are single (same as for council tax) and then you individually have a higher limit.