Hoo-bloody-ray! Child benefit cuts to be 'looked at for fairness'

[NoWayNoHow]

Basic logic and maths prevails at last!

Fingers crossed they actually find a fairer way to implement - I remember the uproar when it was first announced, simply because it was so ridiculously prejudiced against single salary families.

The so called middle class getting screwed again and again...

So agree with you Malaka.

My best friend was lucky enough to have parents who paid their deposit on a house back in 2000. Thus they benefitted hugely from the housing boom and have a far smaller mortgage than us (who bought right at the peak). I have to work so that we can eat, she doesn't - our husbands earn about the same. I also know that she has about 20k in savings. They are able to afford far more of the "nice" things in life, ie holidays etc.

Now I absolutely genuinely don't begrudge that one little bit - life isn't fair! But like you say, with our husbands both just into the hr taxband, it is v likely she will keep it under the new regime, while we won't.

Unless you dig into everyone's bank accounts and personal circumstances, there is no way of knowing who needs it "more". They should either leave it as universal, or put it into the tax credit scheme (where working is a benefit for "lower" income families).

I still cannot see any way they can impose this at all, practically... The HR taxpayer thing was already relying on goodwill. How on earth they can possibly make it that both incomes are considered, god knows. And then - how do you consider partners (rather than husbands)? Surely having something that could benefit the evil unmarried goes against all Tory principles?!!

Totally agree with DadDadDad's post of Fri 13-Jan-12 22:16:48 - in fact, I was going to post a similar suggestion myself until I read through the thread and noticed his eloquently worded letter.

The only tweak I would suggest is that if the Tories are so ideologically opposed to the concept of raising income tax, then they could instead add 1% to the rate of employee NI contributions for higher rate taxpayers (from 2% to 3% for earnings above the HR threshold).

I'm fully aware that this is a fudge and that NI is essentially a form of income tax in all but name, (rather than the 'compulsory insurance premium' that they maintain the pretence of it being), but if this semantic difference helps Gideon to extricate himself off the hook that he's caught himself on, then I put the suggestion out there.

Oh, and whatever he does come up with in relation to changes to the child benefit regime, one thing he should announce ASAP is that the date the change is introduced will be moved three months from January 2013 (as currently planned) to 6th April 2013. Otherwise the change is due to come into effect in the tax year which begins just two weeks after the budget statement this coming March - not very long for people to decide what to do with their personal finances in the forthcoming tax yr.

(There is a popular misconception in much of the media that the change is actually due in April 2013, but that is not the case according to the official plans announced to date.)

Why shouldn't people in the higher tax band get child benefit???! It's wrong for people to say they shouldn't be entitled to it! If it wasn't for them there wouldn't be any sodding child benefit to give!! Argh! It makes me angry !!!

The removal of universality has just been shown to be about more than introducing an unfair system and yet another "cliff edge". It has also opened the way to including it in the welfare cap. This is a pity.

Why do people on a higher tax band NEED child benefit? Its £20 a week for the first child and less for subsequent children. I don't see the big deal, its not a huge amount of money anyway.

The whole benefit system is flawed and needs overhauling.

Yes but they are the ones that are putting the money in the pot!! It's not fair at all. I don't blame people with money putting it in off shore accounts. Especially when they are carrying the rest of the country!

buterflies, if it is not a lot of money, what is the problem with them getting it? Why should the children of higher rate taxpayers be discriminated against because their parents are earning more (paying more tax/NI and possibly worked a lot harder to get up the career ladder than a family on £20k)?

I just can't work out how practically this will work and how the legislation will be framed to avoid compromising the principle of individual taxation, avoid infringing the Data Protection Act and avoid infringing my right to keep my finances separate from dh. I don't work (overseas crown servants so still get UK CB), so no taxable income (get a refund each year). Dh hrt, but I get cb not him, so how is he supposed to know if I get it if I don't tell him, and he doesn't declare it on his return?

They may just decide it's too expensive to implement. After all, if your tax affairs are PAYE and simple, and you earn less than £100k, they don't send you a return each year. Will they start sending returns to everyone who is hrt now? Will they increase the number of staff at HMRC to deal with this?

Absolutely bang on scary

Until "real time" PAYE is up and running properly I cannot see how they will possibly have a chance of implementing it (I suspect they too have realised costs of implementation will exceed savings at present, hence we will get a big climb down)

And it will take years to get real time PAYE working properly!

If they decide to revert to non independent taxation of married women, then presumably, they have to allocate my tax free allowance to dh, in which case, I'll trade the cb for the reduction in tax thanks.

Can EVERYONE PLEASE stop saying that people who DON'T earn enough to pay HRT aren't working as hard as those that do pay HRT? It's REALLY pissing me off.

I have BEEN a HRT payer, earning £50k+. Working in that job, which was, I'll grant you pretty mentally strenuous, involved an hour's commute by train each way, was in NO WAY SHAPE OR FORM as difficult or as hard work as when I could no longer do that job and had to take NMW jobs.

I've been both, a HRT payer working 60+ hours a week with an hour each way train commute, AND a basic rate taxpayer working 60+ hours a week with an hour each way bus commute. And no matter what ANYONE says, the NMW job was more strenuous. And has been proven by many research papers to lower life expectancy in a way that higher-paid work doesn't.

I cannot help but hold my head in my hands when everyone who is on HRT is making such a fuss about losing their child benefit, yet when it is announced that child benefit will be included in the welfare cap, thus meaning that those in low-paid work or unemployed, that have high housing costs, will ALSO lose their child benefit - the only comments that come from the HRT payers is that it is all fair and right, because they are taking too much 'out' of the pot.

HOW can it be fair for a sole earner family to lose child benefit because they are on NMW and have to, erm, pay fucking rent out of less than £12k pa before tax for a ft job, yet you are all up in arms about a sole earner family on 3 times as much (£43k pa before tax) losing theirs. Do you not SEE the irony??!!

(and before you ask, yes, I KNOW that the low-paid worker will get Tax Credits - but I can assure you that it isn't as much as people seem to think. With a sole income of £16.8k, when my Ex-P was here, we got £4.28 a week WTC, we got £190 a week CTC for 3 dc, and we got £20 a week of our £120 a week rent paid). I HIGHLY FUCKING DOUBT that that is in any way equivalent to a family where there is a sole wage earner getting £43k before tax.

HuntyCat Sat 04-Feb-12 22:36:09
"(and before you ask, yes, I KNOW that the low-paid worker will get Tax Credits - but I can assure you that it isn't as much as people seem to think. With a sole income of £16.8k, when my Ex-P was here, we got £4.28 a week WTC, we got £190 a week CTC for 3 dc, and we got £20 a week of our £120 a week rent paid). I HIGHLY FUCKING DOUBT that that is in any way equivalent to a family where there is a sole wage earner getting £43k before tax."

Salary of £16.8k net £13,786
Working Tax Credits £ 222
Child Tax Credits £ 9,880
Child Benefit for 3 kids £ 2,449
Housing Benefit £ 1,040
Total £27,377

Salary of £43k net £32,548

It's more, but not loads more (though your tax credit numbers seem quite high??). That five grand and more could very easy get used up on commuting costs and extra housing costs living in a more expensive area.

Hunty, I can put it another way though, and say that it is interesting how people are up in arms about benefits being capped at 26k, the equivalent of a salary of 35k, when the cut off for losing child benefit is 42k - only a little more once you factor in things like school dinners etc.

One is described as abject poverty, the other as great wealth. They can't both be right.

We are losing 3k per year child benefit - this is about 10% of our income. With 4 kids, that is massively significant. Families on double our income will keep it. The threshold really isn't that far above the benefits cap, and yet if you complain, you are pilloried as being 'very wealthy'.

Exactly Lily. Funny isn't it that the same people who are so vehemently opposing a £26k cap (£35k salary equiv) can at the same time criticise those for pointing out the unfairness of losing CB for earning an extra £7k a year.

Another point to remember is that once upon a time, the HRT was paid by high earners. But the last govt were bound by their manifesto promises of not raising income tax rates so instead opted to push more people into HRT territory by not increasing the thresholds.

So now many middle income earners who certainly are not rich by any measure you care to throw at them are forced to pay HRT.

My opposition to this cut is not because I think CB shouldn't be abolished for higher earners but just the sheer idiocy that one couple may lose it whilst another couple earning almost double would not. And that the drop is a cliff face rather than a tapered reduction.

What happens with the current proposals is you create another situation where people are discouraged to work harder. I mean why do overtime or accept a promotion if it nudges you just into HRT and as a result you lose £200 a month!

Absolutely niceguy.

The thresholds need to be entirely rethought imo, as with stamp duty. That is another bugbear of mine. The thresholds for stamp duty have not only remained static for about 15 years, but are cliff edge taxes as well, so go a penny over £250k and you are suddenly paying 3% on the ENTIRE cost of the property.

We could really do with some extra space, we have scrimped and saved for years to afford this one, and have probably saved enough to buy (with a mortgage) a bigger house. But because we live in a very high housing cost area, to buy a semi detached house with an extra bedroom, we would immediately have to hand over THIRTY THOUSAND pounds to the government in tax, before removal costs etc. Nfw can we afford that, so we can't move. It is insanity not to change the thresholds as the real life situation changes.

And the same is true of the tax thresholds. HRT should kick in around the 70k mark imo. Not 42k.

And what if, like US on that income, you ALSO had £5k of high commuting and housing costs? We live in the SE too...

So if you are taking off £5k from the HRT payer...you would need to do the same for the low-paid worker too. I wish people wouldn't ASSUME that the low paid all have jobs a 2-second walk away, and have low rent. It just ISN'T REALITY in the SE. We still have to pay commuting costs - and we still have the same, high housing costs as anybody else.

Low paid workers don't all live in the North, you know. Or there would be no low-paid workers to DO the low-paid jobs in the SE...

But those ON the benefits cap WILL ALSO BE LOSING THEIR CHILD BENEFIT.

And, I might add, that I AMopposed to the frankly ridiculously ill-thought out proposal that a family with one, single earner earning £43k will lose the Child Benefit, whereas a double-income family won't.

However, I think those on HRT NEED to realise that the benefit cap WILL mean, that in areas of high rental costs, unemployed people AND those on low-wages WILL also be losing their child benefit,as it will be the Child Benefit that is 'added' to the cap figure last, and if it takes them over the cap, then they will not receive it.

And, I'm sorry, but there is no way I NEEDED the Child Benefit when I was earning £50+k pa, with a low income partner/SAHP. It got used on things like ballet classes for my DD, and tumble tots for my DS1. Now, it is used for feeding and clothing my dc. I think I can safely say, having been in BOTH positions, who NEEDS the Child Benefit more.

HRT should NOT kick in at £70k. I was quite happy to pay HRT on £50k. Why on earth not? I was a HIGH earner, therefore I paid HIGH rate tax. .

Hunty: you are ranting.