Child benefit cut unenforceable

[mcquade]

It has emerged that the scrapping of child benefit for upper rate taxpayers is unenforceable and the Treasury is in a flap about, having failed to consult civil servants before making its headline-grabbing announcement. Yet another mess. Full story here:

blogs.wsj.com/iainmartin/2010/10/28/child-benefit-cut-unenforceable-treasury-in-a-flap/?mod=rss_WSJBlog&utm_source=twitterfeed&utm_medium=twitter

ermm just to point out that they would lose their free school meals, prescriptions etc if one of them was working 16hrs a week

Plus them getting their entire rent paid for will depend on the LHA allowance in their area and whether they've managed to find a house to rent that will accept HB for that amount or less.

Many will be topping up

Goo point MaMoTTat. I claimed HB as a single parent. I topped up my housing benefit so was still paying some rent. That was for a rather grim damp unsafe house in an area most people did not want to live.

and the couple working 16hrs a week between them isn't going to apply soon anyhow as they will soon have to work 24hrs between them to get the WTC

But other than that the comparison is entirely fair.

maybe - but that rental figure is a variable amount >

as is the mortgage figure

DP works FT and we still get quite a bit in benefits, as he only gets £16K pa (before tax at 20%). Our rent is £1000pcm, which is CHEAP for our area. For a grotty shoebox. We cannot get a LA property, there bloody aren't any.

If they do decide that it's easier to just scrap CB and pay CTC's - How in the name of hell will £30 a year make up for a loss of at least £20 a week for people like us?

Mia - YOUR sense of entitlement pisses me off quite frankly. DP works full time, yet we haven't been on holiday (even camping) EVER, neither have our dc. If I go out to work, We will have to find money for childcare (including SN childcare that doesn't exist here, and would costs double the normal rate if it did) because the only family we have are DP's elderly parents, who have their own care needs. They live 15 miles away from us - we travel by bus to help them with their shopping etc as WE CAN'T AFFORD TO RUN A CAR.

We are not bleating, we can't afford to move away to where the rents are cheaper - DP's parents need us, there's no other school that will cope with DD's SN's as well, and DP would be unable to get to work, so would be unemployed.

I can't understand how people on an income of £44K+ can't afford to lose their CB. You have a mortgage - you've got an asset from that that D and I will never have despite DP working FT. You have high utility bills - Don't we all? You can only afford to go on camping holidays - that's better than no holiday in 13 yrs.

Loudlass do you not work?

ermm just to point out that they would lose their free school meals, prescriptions etc if one of them was working 16hrs a week

Neither of these were included in the calculation anyway. You can still get free presciptions etc depends on the level of income, you get a "NHS tax credit exemption certificate". Ignore the free school meals bit then, but I though in my LA it applied if you houshold income was less than about £16k?

In my area

3 bed LHA = £143.84/wk = £7479.68pa

cheapest ok 3 bed = £6900pa so LHA covers it (very tiny terraced house in decent nick, on the street DH used to live on when we first met, okayish area)
30s semi similar to our house = £7800pa
so at worst 320pa short = £27/mth to make up
(our mortgage is about £620/mth)

so even with these figures the scenario 2 family are still better off...

I'm glad they are putting the hours up to 24/wk soon, but I'd looked at what they get today as entitled-to isn't programmed for the new rules yet. Hopefully they will end up as "rich" as the higher rate tax paying family under the new rules

I think MilaLaes post demonstrate how addicted to welfare we are in this country. The idea that anyone with a higher rate taxpayer in the household requires welfare payments is ridiculous.

there are so many variable factors.

What if the HRT doesn't have to commute, but the lower income worker does?

What if the mortgage payments are less than the rental price around?

exH's mortgage payments are £100 a month less than the LHA rate round here.

And when we bought our first house when we were together we were paying £200 a month less on our mortgage than we had been renting (and we'd gone from a 2 bedroom house to a 3 bedroom one!)

Ignoring whether it is wrong or right..
The article quoted is seriously flawed. Look at the letter you get every year telling you about the increase in CB. On the back is a list that covers the changes in your circumstances you need to tell them about.
And those you need to tell the tax credit office about...

Of course it is household income that counts ... and it isn't paid to women par se. It is a benefit for the child. The person who gets it is usually the lowest/non-earner - (therefore non-NI payer) because you get NI credits towards your pension - as the carer of a child. You can choose who gets it - as long the child lives with them...

And don't start me on the HB cap - in most areas (exception is parts of London) if all the people claiming HB are going to move out - who is going to fill their place? Most likely rents will go down...and the people claiming HB will still be able to live there. And there is a reason for it..
On a 'homes under the hammer' or similar program - a property developer brought a house up to renting standard - just - eg changed the one single socket in the kitchen to a double and got rid of the countless adapters and extensions plugged in -so it was 'safe'..but what was going to happen when someone lived there? She had reached an agreement to rent it to the council - for £200pm more than the estate agent's rental value.
On a tv program with a very young single mum - she said in passing her rent was £600pm for her not brilliant small 2 bed flat on a Yorkshire estate...obviously paid for by HB and obviously not a realistic value.
Hopefully the cap will make the rental market more realistic...and stop greedy landlords raking in it at the tax payers expense...

Lusi - not all Landlords are greedy BTL'ers - many are people who have been unable to sell their homes but can't afford to pay the mortgage any more, so rent it out for the mortgage amount and rent somewhere cheaper themselves.

If my LL was forced to lower his rent I'd be out,

(I know this as DS3 "helpfully" opened some post a while ago that was actually the LL's and handed it to me, and it was his new mortgage payment figure ) Obviously I didn't read the letter in full, but when you're on a low income/benefits you're used to scanning letters quickly and spotting £££ figures in them.

Thankfully LL is very lovely and when I explained what had happened was very understanding

or even 'per se'

I thought you'd come over all French Lusi

MaMoTTaT -
I know all LLs aren't greedy - but some are...
and (like everything) it is the few bad ones that damage the ok ones...
I try not to watch programs like HUTH - they make we want to scream...nothing against making money - just the ones who make huge profits on the back of others misfortune and drive up house prices so people can't afford somewhere to live!
I own now - but thinking about it - I rented for 25 yrs...I'm struggling to think of one good LL...maybe it is the bad ones that are most memorable..

I have had bad landlords and good ones, significantly the bad ones rented to me as a housing benefit claimant.

That's so true about only the bad side of everything been heard.

It applies to so much in life

Teenagers - all rowdy, ASBO types
Benefits claimants - all lazy feckers
Teachers - can't spell, don't care, etc etc
MIL's - all evil
and so on and so on

There are a NUMBER of reasons why I'm not working, just one of them being that my childcare would cost at least £52 a day (SN childcare anyone?) and I can only earn £46.80 a day. I have a disability that stops me from working anything more than PT or my disability gets worse. (Have tried, been proven).

These figures have really suprised me, so to take the points make and to cut the figures a slightly different way, ignoring if it is renting/buying and assuming housing costs are equal in each scenario, at the appropriate LHA cap (effectively it is your "choice" if you live somewhere more expensive than the LHA cap), ignoring communting costs etc. (I've used my LHA cap for the purposes of the calculation)

Scenario 1 - One parent on £44k, other parent not working ATM - 3 children - ChB no longer payable due to HRT payer
salary 44k
less tax/NI £12k
give net/month = £2667

Scenario 2 - one parent works 16hrs/wk on just over min wage, other parent not working - 3 children
16hrs/wk at just over min wage = £5k
(no tax/NI due)
net/month = £417

• ChB for 3 Children (204/month) = £621
• tax credits (£939/month according to entitled to) =£1560
• HB/CTB of £775 (according to entitled to)= £2335 net/month

Scenario 3 one parent works FT on £15k pa, other not working ATM, 3 kids
salary £15k
less tax/NI = £12435pa = £1036/mth

• ChB for 3 Children (£204/month) = £1240
• tax credits £726/month (according to entitled to) = 1966
• HB/CTB of £488 (according to entitled to)= £2454 net/mth

So for a 300% increase in the FT GROSS income (15k to 44k) there is only a 9% increase in NET income.

I've seen loads of posts saying "but higher rate tax payers can afford it", "if my DH was a HRT payer we'd be rich", "I wouldn't be whinging if DH earned 3 times what he does now"... etc. and TBH I was expecting there to be a much greater difference. Actually there isn't...

(As I've said before DH is not a HRT payer, so I've no personal axe to grind here)

" (effectively it is your "choice" if you live somewhere more expensive than the LHA cap),"

it would be nice to assume that, but sadly not the case, if you need a roof over your head and are claiming even partial HB then you often don't have a choice.

There just aren't enough rental properties under LHA's rates in most areas for all those that are eligible to HB.

Although I suppose a choice between homelessness and a roof over your head is a choice

those HB/CTB figures seem strange for the scenario 2 and 3 - more HB paid for working full time on 15k than part time on 5k

Betsyboop -
can't argue with your figures - but will say you are looking at the lowest HRT payer.

I know someone who is complaining about losing CB - she is SAHM, 2 children and her DH earns £65K.
That extra 20k even after tax must make a big difference to your figures...

those HB/CTB figures seem strange for the scenario 2 and 3 - more HB paid for working full time on 15k than part time on 5k

Don't understand what you mean the HB/CTC is less for the FT working scenario?

Can you suggest a better way to effectively take the variable about people's "choices" about whether they have cheap/expensive housing out of the equation or a way to include it more "fairly"? A lot of the original criticism was around people "choosing" to have a £1k/month mortgage (even though having a mortgage can sometimes be cheaper than renting the equivalent property)

or sorry - was looking at the net amount at the end not the actual figure at the start