Waiting with baited breath! What will the chancellor do with CB on Wednesday.

[chickydoo]

Probably been done to death, but holding my breath to see what the budget will bring for child benefit on Weds? Will there be a U turn?
What do you think will happen?

I am so so so bloody angry about the CB, I live in London and and my DH is over the threshold, we are NOT rich, we struggle like mad and now I have lost a small but really valuable bit of money which I rely on every month, yet my brother and his wife who live on the next road will keep theirs as they are literally just under the cap, and they pay no childcare as her mother has them. Totally unfair, if their going to nick my CB, then make it bloody fari

Whilst I fully appreciate that a family with a higher rate earner is a lucky family. I would dispute that all families with one earner have the "luxury of having a parent at home and therefore no child care costs. Personally I would love to work, I wouldn't be a higher rate earner, but I could earn a very good wage, but I can't because of a medical condition of one of my dc. No child care facility will take him, they do not want the risk, and I have to attend emergency situations with him on a frightening regular basis. Dh he works more than 60 hours per week, plus commuting time in order to keep his job, he has not been allowed at attend any of the emergency admissions of his son, and was told by his employer that if he made a big deal out of what was happening to ds his career would be permenantly affected, shortly after he was made redundant but fortunately re-employed by another part of the business. There are no typical families, the welfare state should be there to support low income families, how much support a fmaily recieves should be household dependent, not individually dependent.

But DH doesn't fill in a SA form. Will they automatically send them to all HRT payers now - that's a lot of work given they have to look at the things once they are filled in, currently many HRT's don't fill in forms.

Good question yellow, I bet they don't know how they are going to implement it.

issimma: "I would be happy and understand CB cuts if based on household earnings, but I really don't get how it's fair for families that earn nearly 100K to keep it, when some families on 50K will have it cut.

Am I being really thick here?"

Not being thick but it's just that it's easier - and therefore cheaper - to make the calculation on the basis of one person's income rather than two. You'd have to gather a lot of extra data to make the calculation on the basis of household income, whereas you will automatically receive the information about individuals' earnings.

I'm also quite interested in the £60k threshold, and whether it includes a bonus or not. That will make a difference to whether we're over or under it! Not that it matters because I don't mind losing CB, as we don't really need it. Just curious.

Other benefits are often calculated based on household income though, it does seem a bit inconsistent.

thanks pmp look forward to more details coming out soon. have not had time to read all the stuff on the budget yet but I do agree that if you are a HRT you should lose CB - it is a huge shame but the country is broke so the next few years will be painful and during that time HRTs should take a bigger hit. Yes, it is unfair if you live in the south in comparison to someone in the North but the whole system would have to be changed and made more complex to cope with that point.

I just hope the changes, for LRTs and the majority of those in receipt of benefits who also have kids, are enough to get them through the tough years until we have the debt problem under control and sufficient growth to fuel increases.

& for those complaining about a 5% reduction in the top rate of tax, which did not bring much in anyway, there is evidence that reducing the top rate of tax will actually bring in more tax in the long run..... ie because people at that earning level will not bother with tax planning. 50% is a tipping point. What we want is for those people to reinvest their wealth to encourage growth in our economy.

" if twice the average wage is not enough, you need to review your spending"

is the average wage £30,000?
Wish I was earning that much.

But 2 adults each earning 59K each will only just be receiving CHB!

Fwiw I think CHB should be paid to women, and although I thought it was harsh, I did agree with higher rate tax payers losing it.

I am not a Tory

"You'd have to gather a lot of extra data to make the calculation on the basis of household income, whereas you will automatically receive the information about individuals' earnings"

I think they will probably find a lot more people will suddenly become 'benfit cheats' then.

Just received this link

www.hmrc.gov.uk/budget2012/cb-income-tax.htm

Sorry on link on my phone.

You'd have to gather a lot of extra data to make the calculation on the basis of household income, whereas you will automatically receive the information about individuals' earnings.

But surely it is on household income? The CB is paid to me and I don't earn over 50k. So therefore there has to be a large amount of "gathering extra data" otherwise they won't know DH earns over 50k (just). As, you know, people are taxed as individuals. Also whose income do they decide to take into account? What if you have other family members living with you or a lodger? Where will they draw the line?

By the way, do all SAHPs who don't work do a tax return currently? Just a thought. There will be a lot more people doing tax returns. This is going to be a massive fuck up. I don't think they've got a fucking clue what they're doing. I'm sure the civil servants do, but the ministers are in la la I'm not listening land.

Yes exactly - it's not about 'twice the average wage' not being enough, but the fact that households earning almost four times the average will still receive the benefit!

We will cope fine without the CB, but it does seem quite inconsistent, especially as other benefits are usually based on total household income, and also the NI contributions issue is a concern to many people, mostly women I would guess.

I keep saying, if people have high housing costs, for example in the South East, high childcare costs (say £20k out of taxed income, which is nothing around here for two young children) and high commuting costs (£6k common around here), then £60k gross suddenly doesn't look so much. It actually breaks down like this:

£41,000 net
£20,000 childcare
£12,000 rent or mortgage on a modest 3-bed semi
£6,000 commuting (season ticket) or mileage

Leaves you £3000 a year, or £75 a week, approximately.
Hardly coining it.

So many aspects of this need to be clarified including:

1. What if you earn £49k but get a £12k bonus at end of year - will you have to pay back CB?
2. What if you claim childcare vouchers and pay into a salary which takes your pre tax salary from £55k p.a to £49k p.a?
3. What if 2 parents living together each earn £55k How on earth are they going to track and caluclate that?

If single earning households of £60k salary have 2+ children it could actually be more beneficient to work 4 days per week, therefore dip under the threshold, cut down commute costs, claim CB of £150+ per month and have an extra day at home!

So I assume then that, rather than the CB claiming spouse having to ask their DH/DW/DP if they are a HRT payer which would go against the principle of individual taxation, the HR taxpayer will have to tick a box on their tax return confirming that someone living at their address is claiming CB?

What if the CB claimant refuses to tell their DP/DH/DW or lies? Will the HR taxpayer have to pay interest and penalties if they are subsequently discovered to have completed their tax return inaccurately?

(All a bit fanciful I know, but I just wonder what will happen?)

Wouldn't it be possible to use the existing tax credits system in which you combine all income to assess whether a family gets cb or not. No-one gets it unless they apply through the system that is already in place for child tax crefits, after all cb is a child tax credit is it not. Then you could set a level of household income no problem.

Average income is £27,000 but then certain welfare benefits are available on top of that depending on circumstances like housing benefit, working tax credits, child tax credits, cb etc.

oranges I don't think that is fanciful at all, I think that is exactly what will happen in lots of households.

I found the page this links to and it's really helpful. Can either chose to still receive CB and partner is taxed that amount, or can not receive. Pension still protected it seems. It all starts Jan 2013 and they will write to us all in the autumn. So basically it's a means test but only on one income - still unfair !!

epiphiny: "Other benefits are often calculated based on household income though, it does seem a bit inconsistent."

Hmm - I wonder then if it's just that there are so many people with children claiming child benefit, so therefore the sheer scale of the data they'd have to collect.

Sorry, that was Pessmisspiggys link.

I suspect the amount they will save will not be much compared to the amount needed to change, assess and police the system.

Wouldn't it be possible to use the existing tax credits system in which you combine all income to assess whether a family gets cb or not. No-one gets it unless they apply through the system that is already in place for child tax crefits, after all cb is a child tax credit is it not. Then you could set a level of household income no problem

That is what they will have to do to administer the change properly. BUT there are millions of people who this will affect who don't currently claim tax credits. Therefore they will have to be brought into the system, therefore massive extra administration and massive extra costs. This is why successive Govts in the past have always kept CB as a universal benefit, as means testing it would be an effing nightmare.

Epiphany - you hit the nail on the head !! Other benefits are based on household income, not one persons. If they did this on household total I don't think people would be so mad. £60k household income - no. £100k - yes. Because of how many people earn it ?