Government to review child benefit cuts

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Was on lunchtime news (on phone so can't do link) that the government have confirmed that they will review the plans to cut child benefit. Sounds like they will still do something - what do people think we will end up with?

"By the way Higher rate tax payers are already sharing the load as they have lost tax credits which used to be paid up to 60k"

Only Higher rate tax payers who are parents though.

If you're not a parent, you're laughing. That's why I would support putting a penny on the 40% rate, because it is shared round ALL HRT payers.

lilybolero - all people paying higher rate tax whether parents or not have already lost out because the increase to the personal allowance was given to basic rate tax payers only.

You are right that only people with families were effected by the tax credit cut.

That wasn't so much a 'hit' as a failure to benefit though - it's not the same as losing thousands of pounds every year that you get atm.

Fwiw though, I think (and I've posted this on here) that the 40% threshold is ultimately set ridiculously low, 43k is not where it should kick in at all, it's ridiculous.

Ideally I think it should be around the 70k mark, but be higher - so, say, 45p, and at that point you could abolish the 50p tax, because it would be much simpler.

It would do away with this concept that a family existing on 43k is wealthy. They're not poor, but certainly not wealthy. And when you consider that the benefits cap is set at the equivalent of a 35k salary, that proves the point really - especially when that has been criticised for causing hardship to families.

1p on tax would cost us about £70 a year, I'd totally support this.

Cutting child benefit is costing us £3000 a year. But not costing any non-parent HRT payers anything. Or the dual income family on £80,000 anything. Can't be fair.

Lilybolero - totally agree, "we are all in it together" rubbish!

He said the current situation means that families on £15k are paying taxes that go towards paying for the CB of much wealthier families

That's a ridiculous point of view and it makes my teeth grind when i hear an MP trot that out.

You can't just divvie up the tax paid and say this goes towards that, and that pays for that. It just goes into one big pot. What next? The rich saying "Well I paid enough tax to support 10 single parent families last year so that's enough for me?"

niceguy, unfortunately it's the line they all trot out.

on the whole the only tax I really REALLY resent paying is the money that went to the banks, and the MPs expenses.....

But I guess that's different, as Ken Clarke thinks it's "an anomaly that people on HRT should receive a social benefit", yet he, as a very VERY wealthy man, claimed over 50k on expenses between 2004 and 2009.

That's not an anomaly, because they're 'different'.....

It is exactly what our MP said when the story first came out a year or so ago - "It is not fair for someone on low income to pay tax so that someone in the HRT bracket can receive child benefit".

The Treasury said that too.

As did David Cameron's office.

and it's all crap. This is why child benefit should be returned to being a taxable allowance - in fact that could be a good way out of this mess - for those not on HRT, they continue to receive it as a benefit, those on HRT can claim it back as a tax allowance.

Then people might understand that people on low incomes are NOT subsidising those on HRT, it is simply that out of the enormous amount of tax we pay, we are being allowed to keep a little bit of it, to pay for the huge cost of children.

Oh ffs, a quote on the BBC website now;
"But a spokesman for the Treasury said: "The government has been clear that it is fair to ask those who are better off in our society to make a contribution to paying down the debts that we have built up over the last decade in Britain.

"It is not fair to ask someone earning £20,000 to pay for the child benefit that goes to someone earning more than twice that much." "

But it is ok to ask someone earning £43,000 to pay for the child benefit that goes to a family earning almost twice as much??????

And here is a quote from David Cameron last summer (2011);

" ?If it hurts families, if it undermines commitment, if it tramples over the values that keeps people together, or stops families from being together, then we shouldn?t do it.

?More than that, we?ve got to get out there and make a positive difference to the way families work, the way people bring up their children??

"

Yeah right. Put it this way, if dh and I divorced, I'd still get my child benefit.

Just worked out that if someone is earning just below the htr band and then they go up a point of a scale in work and maybe get about £1000 pay rise they will be gaining roughly £600 on their wages a year. (£50 a month)

If they have 2 children this will mean the child benifit goes and they will loose £1752 a year. So getting £1000 pound pay raise will leave you £1252 worse off. (just over £100 a month) that in our house is a whole weeks shopping.

I honestly think DC & Osbourne woke up the morning of the conference and thought "We need a headline which makes people think that Tories are not afraid to hit the rich" And they came up with the CB idea over a cup of coffee.

It's not that I resent losing CB. I understand the country is in financial dire straits and we all need to cut back & pay more. But it's just the sheer lack of logic in the plans which baffle me.

Simple common sense dictates that you can't say you are hitting the rich when you are letting those who earn vastly more keep it.

There are much more fairer ways such as the ideas floated above of putting a penny on income tax. Or fold it into tax credits, a whole system which already means tests. Or even limit the number of kids you pay out for to 4. Anything but the current stupid mess.

Politically its stupid too since you are hurting your core voters with a stupid policy.

'And here is a quote from David Cameron last summer (2011);

" ?If it hurts families, if it undermines commitment, if it tramples over the values that keeps people together, or stops families from being together, then we shouldn?t do it.'

Those words came out of his mouth? Well he's a lying wanker then isnt he. You should see what he's doing to families with disabled kids. Even worse.

This whole sorry business shows that the Government is administratively incompetent.

It is ill-thought out, bureaucratically expensive, and introduces more unfairnesses. It breaches important principles of independent taxation.

And even two years on, no sensible announcement has been made on the NI situation.

And a clearly broken pre-election pledge.

Cameron has just trotted out 'why should someone on a low income pay for a wealthy person's child benefit?" in PMQs.

And he also said it was right to take child benefit from the wealthiest 15%.....but it isn't the wealthiest 15% unless he's suggesting that a family on 43k is somehow wealthier than a family on 80k.....

Edith, as regards the NI, what they have said is that the 'stay at home' parent will continue to claim CB, thereby getting the NI credit, then the money will be taken via their partner's tax code/self assessment form.

Lily: that's what I think will happen, but they haven't made a clear announcement about it.

Especially about how that can be achieved without consigning the principle of independent taxation to the dustbin.

(Which of course a Govt can do, but it would be helpful if hey would show some acknowledgement that they are indeed sneaking in a major change of the principles of UK taxation).

My suggestion - an "opt out" system.

All those who consider themselves wealthy - Philip Scholfield, Wayne Rooney, bankers with big bonuses et all, opt out.

I thought being above 40K put you in the wealthiest 10%. So technically he is right. While being an idiot.

SAGA or Age UK set up a fund to which wealthy pensioners could give their winter fuel payments, and which they would then use to assist poorer pensioners. I don't know how this fund did in its first winter.

I wonder how well a parallel initiative for CB might do?

KalSkirata

of people who are PAYE

Surely most people on 43k earnt 15k at some point anyway, it's what career progression is, isnt it?

'Just worked out that if someone is earning just below the htr band and then they go up a point of a scale in work and maybe get about £1000 pay rise they will be gaining roughly £600 on their wages a year. (£50 a month)

If they have 2 children this will mean the child benifit goes and they will loose £1752 a year. So getting £1000 pound pay raise will leave you £1252 worse off. (just over £100 a month) that in our house is a whole weeks shopping.'

No, they'll lose more because if the pay rise pushes the person into hrt, they effectively (with tax and NI) lose 50% of that pay rise, so will get £500 in wages (£41 pm).

As the legislation stands at the moment, I can't see a way around the independent taxation problem, or around the data protection problem if there isn't a means tested household record there already (and in our case that doesn't exist). It will be interesting; they can have my cb if I can transfer my tax allowance to dh.

That's right, scary and if they have 3 or (how dare they) 4 children, the sums get even larger with less incentives for people to seek payrises/more responsibility/overtime etc.

Go with the opt out, Cameron. I dare you.