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.

Hunty, my point is that there isn't that much difference between the threshold of the benefit cap, and the threshold to lose child benefit. 35k vs 42k. Not a big difference. I don't think you can say that 42k is a high earner, but 35k is poverty.

Remember the 42k earner may well have high housing costs, commuting costs, childcare costs etc.

THIS is my ideal taxation system - which I understand is just a pipe dream, as the people at the top are greedy bastards, but is fairer for those at the bottom and in the middle. I do know that it'l never happen, though...

Income Bracket 1 - Earnings of between £1 and £11,856 (NMW for a FT week), No tax.
Income bracket 2 - Earnings between £11,856 and £23,712 (2 times NMW), tax at 10%.
Income bracket 3 - Earnings between £23,712 and £35,568 (3 times NMW) should be taxed at 20%.
Income bracket 4 - Earnings between £35,568 and £47,424 (4 times NMW) should be taxed at 30%.
Income bracket 5 - Earnings between £47,424 and £59,280 (5 times NMW) should be taxed at 40%.
Income bracket 6 - Earnings between £59,280 and £71,136 (6 times NMW) should be taxed at 50%.
Income bracket 7 - Earnings between £71,136 and £82,992 (7 times NMW) should be taxed at 60%.
Income bracket 8 - Earnings between £82,992 and £94,848 (8 times NMW) should be taxed at 70%.
Income bracket 9 - Earnings between £94,848 and £106,704 (9 times NMW) should be taxed at 80%.
Income bracket 10 - Earnings between £106,704 and £118,560 (10 times NMW) should be taxed at 90%.

And ANYTHING over 10 TIMES what the LOWEST-PAID workers get paid should be punitively taxed at 100%, thus making it frankly STUPID to offer ANYONE a wage that is MORE than 10 times what the lowest paid get.

IMO, ANYONE who wants MORE than 10 times what their lowest paid workers get is just basically, greedy. You can live a VERY comfortable life ANYWHERE in the UK for £118,560.

But Lily - the lower paid of the two will also be likely to have those same high commuting and housing costs.

You know what, dh is HRT, we can't afford to pay for school dinners every day for our kids. Once all 4 are at school, it will be £8.80 a day - £44 a week. I can make a packed lunch that I know they will eat for far less than that, so I do that instead. Yes it was my choice to have 4 kids, but I do resent that we are told that we don't 'need' child benefit, when the thresholds are so close.

I'm not saying they wouldn't. I'm pointing out that they have similar incomes and may well have similar costs, but one is described as 'struggling through poverty' and the other as 'a high earner who doesn't need help'.

£35k ISN'T poverty - but people EARNING £35k will ALSO be in receipt of some benefits, like Child benefit, or wtc to help with childcare costs.

It ISN'T a direct comparison between a couple with 3 dc with a SAHP on £26k benefits or £35k earnings - because the couple with £35k earnings will also be in receipt of some benefits on top too.

Which skews the picture somewhat from the things that are reported in the media.

And WHY do people always think that the low-paid have some sort of magically lower cost housing? Where does all this lower cost housing appear from? Do they get given a house when they rock up to the local council? Or are they, like most people, having to go Private rented if they can't afford to buy?

The cap at £26k cannot be a direct equivalent to an equal family earning £35k. That is just a propoganda 'meeja' message that fails to account for the fact that a family in employment with in the same street as someone that is hit by the £26k benefits cap, with the same family make-up, who is earning £35k will also have benefits such as WTC childcare element, Child Benefit, and even possibly some Housing Benefit added to their TOTAL INCOME. You cannot do a direct comparison between earnings and benefits claimed if you are not going to ALSO include the benefits claimed by the WORKING family in the amount stated.

As well as that - Take two families. They are both couples. They live next door to each other, and have the same housing costs. One person in each couple in on ESA, because they have a disability that means that they are incapable of working. Both families have 3 dc. Both of the partners that work work for the same company, so have the same commuting costs. One earns £11,856pa. The other earns £35k PA.

Family one breach the benefits cap, as they have to claim help with their living costs, and their benefits breach the cap, because the ESA is counted as part of the cap figure of £26k - so they lose anything above the cap, which is likely to be the Child Benefit as it is added in last. They lose a portion of the ESA too, in order to carry on covering the same amount of housing costs as they were before the cap.

Family two get to keep their child benefit as they aren't HRT payers. They get the ESA. They get MORE income than the basic £35k from their earnings. They also get MORE than their next door neighbours.

Family two, with the £35k earner is STILL better off than their neighbours. By more than you think...

Instead of comparing 35k, compare 42k. At which there is no CTC, no WFTC and soon will be no CB. They get no help whatsoever, and are repeatedly referred to as 'high earners', even though in actuality they are not earning much more than the benefits cap.

There are unfairnesses throughout the system. There shouldn't be. But because there are unfairnesses someplaces doesn't mean that it justifies other unfairnesses.

Hunty. If the UK was the only country on earth, your taxation plans would be dangerous. Given the UK is part of the EU where we can work anywhere and given high earners have choices, your taxation ideas are suicidal.

Can you imagine the mass exodus of high earners who are forced to pay 100% of what they earn in tax?

That perhaps is the most ridiculous thing I've read in a long time on MN. Who would then pay your beloved benefits when all the big earners have gone?

And before you try to argue people wouldn't.... Telegraph link

And the flaw in your last rant post regarding £35k isn't an apples to apples comparison with a family receiving £26k in benefits. You are right. It's not an exact comparison but it's a rough yardstick which in most people's mind is close enough. Because whilst you are arguing your fictional family get help in terms of WTC/CB, if you want to be truly fair then you need to allow for the fact that the benefits family will get significant amount of state help in the form of free dental/prescriptions/school dinners. Just for the latter, the BBC family with 6 kids are avoiding the need to pay £55+ per week. Not to mention preferential rates on water/electric. And probably a few others I haven't thought of right now.

yy about school dinners, for my lot to have school dinners would be £1700+ a year, not a possiblity for us to pay.

Preferential rates on water/electric? None of those available in MY area of the SE for those on benefits. Free dental treatment? I don't THINK so! I had a problem with my tooth, and was given the option between paying £47 to have the tooth removed, or £450 to have a root canal treatment done. On the NHS. I will respectfully disagree on the free dental treatment.

Free prescriptions - that's if you can GET your PCT to prescribe the treatments you need. MY local PCT refuses to cover things like blood testing strips for diabetics, excema cream, even for babies, wet wraps for excema, peak flow meters for asthmatics, branded medication, even if the ggeneric ones lower your, say, seizure control, access to a Neurologist AT ALL, access to an epilepsy nurse AT ALL, access to an enuresis clinic. It's almost impossible to get help from the orthotics dept, the SALT dept.

Free prescriptions elicits a hollow laugh from me, I'm afraid, NiceGuy.

OK, I'll grant you the free school meals. IF your dc don't have allergies, or need a special diet. I have to provide a Gluten-Free packed lunch for my coeliac DS1, with no extra financial support, because the LEA refuse to provide the school with any extra budget to cover that. My DS2 has autism, and has sensory issues surrounding food, which mean that he won't eat the food that is provided - he is also allergic to certain sweeteners (aspartame and saccharine), and as they have added sweeteners rather than sugar to their meals to meet the nutritional guidelines for healthy meals (?) he can't eat some parts of the meal anyway. So only DD gets them.

And even if you CHOOSE to send your dc's to school with a packed lunch, and DON'T claim the Free School Meals - the school bugs you to claim them, because then the school not only gets the FSM's money anyway, but they qualify for the pupil premium added to their budget. SO you will find that an awful lot of people that CLAIM for FSM's don't actually USE the FSM's money - the SCHOOL does - so it is, in essence, a budget extra for the SCHOOL (redistribution of budgets) rather than the person on benefits.

I don't know of that many people whose dc ARE meant to be getting FSM's that actually SENDS theirdc for them every day. And once they get to Secondary school, the amount given on FSM's doesn't even cover a baguette AND a drink - I have to send my DD in with extra money every day in order for her to get a full meal. In her case, the FSM's money is a DISCOUNTED school meal rather than a FREE school meal.

(And I HAVE checked on the school website, she ISN'T diddling me - She gets £1.80 FSM money, a baguette now costs £1.85..)

If the working family own their own house, they will also have to pay a mortgage, buildings insurance (as a condition of their mortgage), and have to sort out any problems with their house, which if you rent, you don't, as the landlord should do it for you.

I'm with NG2 on your tax system - what is the point of working if you are forking (with NI) over 70% of your earnings to the govt. There is no incentive there to work whatsoever. Tax is punitive enough as it is. Why penalise someone for getting qualifications and working their way up the ladder?

Point is though Hunty, if we're talking about comparisons, someone just into the HRT gets NOTHING. So it is fair to compare 42k with 35k (+FSMs), and conclude that there is not much difference.

Good point about NI, that makes the tax rate far more than 40% if you are HRT.

But Lily - the person under the benefits cap WON'T get £35k + FSM's - they will get £26k IN TOTAL. The person on £35k won't get FSM's - but neither will the person on £11,856 + TC's...

And it's NOT 70% of ALL your earnings - it is your earnings BETWEEN the first figure and the second figure for that income bracket.

Do you realise that after the first £2,250k pa, someone on NMW WHO HAS TO CLAIM UC will have their UC withdrawn at 62p in every pound. So they will be losing the equivalent of 62% of their earnings over £2,250k pa...

The high withdrawal rates are a MAJOR disincentive for those at the bottom of the heap to take NMW work - just as much a punitive tax rate would be on those that earn more.

What is WRONG with thinking that no-one needs more than 10 times the income of another person? If ten times NMW is too low, then raise NMW until 10 times NMW is an 'acceptable' level to those at the top. NO-ONE needs more than 10 times the income of anyone else. WTF does ANYONE do that is worth 10 times more than anyone else?!

(And yes, I know in a global economy it wouldn't work, because the greedy fuckers would just leave the UK, but still. WHY are some people so greedy that they think they 'deserve' MORE than 10 times what they are paying the people that are doing manual work, working themselves into an early grave?)

Why penalise someone who CAN'T for whatever reason, get qualifications and work their way up the ladder? If EVERYONE did that - who would do the unskilled jobs for NMW?

Hunty that isn't true, the Free School Meals are excluded.

Link here
" One-off benefits (for example Social Fund Loans) and non-cash
benefits (for example Free School Meals) will not be included in the assessment
of benefit income. "

Another bit from here, exempting low-income households from the cap;

" Households which include a member who is in receipt of Working
Tax Credit (WTC) will be excluded from the cap. This will increase the incentive
for people to find employment because once they are in receipt of WTC their
benefits will no longer be subject to the cap. Once customers have been migrated
to or have claimed Universal Credit, WTC will no longer be available to them and another measure of being ?in work? will be applied. The Department is still
considering the best definition for this."

(that should obviously read low-income working households)

HuntyCat Tue 07-Feb-12 11:30:40
"And what if, like US on that income, you ALSO had £5k of high commuting and housing costs? We live in the SE too.."

I was meaning five grand on top of what you are paying, not five grand total (and actually it should be four grand because the top rate tax-payer only gets £31k a year and I got it wrong). You said you paid £120/week in rent which is way less than rent on even a two bed house in Reading. You would be looking at at least £800/month, plus a season ticket into London is £4.5k. That's the sort of costs a lot (maybe most?) top-rate tax payers are looking at paying to work because so many high paying jobs are in London.

Would you honestly have been better off if your ex-partner had been offered a job paying £43k/year in the City bearing in mind his net pay would only go up £4k/year?

You can't just declare minimum wage is too low and up it higher just because a few people earn silly money. If you accept that if you place a punitive tax regime in place then people will leave then you must also understand that if minimum wage doubled/tripled/whatever then businesses would leave. We see this happening a lot in terms of investment never coming to the UK in the first place or companies quietly offshoring their work to a lower cost country.

Why the heck would we want to make our country even LESS competitive? Why the heck would we want to quadruple (for arguments sake) the NMW and a student working in Mcdonald's on a salary that would feed the mythical nuclear family. Where's that person's incentive to study and move on?

I note with interest that in Greece they're actually being forced to LOWER the NMW as tge level it's set to at present is simply unsustainable.

In THEORY all your ideas sound very good but in practice they simply have so many flaws that you can drive a truck through them.

You are firmly wedded to the idea that the UK govt can somehow legislate it's way to a fairer world. In reality it cannot. The best thing that the government can do is encourage people to earn obscene amounts of money upon which they'd pay a handsome amount of tax. Take Mark Zuckerberg for example. He's so filthy rich that his tax bill will hit $2 billion. That's right...one person is going to pay $2 BILLION in taxes. Makes my contribution look like peanuts.

Instead of taxing people and making them all run away, why not encourage innovators, businessmen etc to come to the UK and make their billions here? If we tax them fairly, they'd be happy to pay their billions here rather than say USA?

Because SOME PEOPLE WILL STILL EARN NEXT TO NOTHING ON NMW. Why SHOULD they work themselves into an early grave (manual workers on a low wage have a lower life expectancy that HRT payers). NOT everyone CAN earn more than NMW - either because of circumstance (diagnosed with a disability, caring, childcare responsibilities, can't afford to train) OR because they just don't HAVE the intellectual ability to cope with a higher paid job.

Yes, NiceGuy - they'd be happy to come here and MAKE billions (in order to pay billions in tax) OFF the hard work put in by their workers on NMW.

Using people as a way of being 'competitive' is horrific. They are REAL PEOPLE. It actually horrifies me that some people think that it's OK to pay huge swathes of people LESS than it costs to live in this country in order to make the country 'competitive', regardless of the effect ON those low-paid people.

Or are the low-paid somehow less worthy of being paid an amount that is enough to live off in this country? Are they dispensible? Are they worth so little that if a few of them starve in order for the country to be 'competitive' that it is fine, because there are plenty more who will do those jobs? Do you realise that these are PEOPLE you are talking about, not bloody statistics?

ALL these companies that are threatening to leave the country if NMW is risen are EXPLOITING their lower paid workers. AND expecting the state to pick up the bill. Now the state is no longer willing to do so, these companies are refusing to pick up the bill.

Very few people in the UK in the 21st Century are goingto be willing to work for LESS than their basic living expenses, be they single or in a family. If they are only capable of earning NMW, that NMW should be enough to support a family - hence there being different rates of NMW based on your AGE.

Why would you shorten your life expectancy, and make money for someone else, if you couldn't afford to keep a roof over your head?

Is a return to feudalism what the Government is after?

Otoh though, if a family on NMW is topped up by benefits, AND the NMW job releases them from the benefits cap, that's a good incentive to work, not to rely 100% on capped benefits.