Call to end "middle class" benefits

[AtheneNoctua]

news.bbc.co.uk/1/hi/uk_politics/8319646.stm

"It defines middle class as a household where every adult has an annual income of at least £15,000 and every child £5,000. "

God we would be screwed! With 2 adults and 3 DCs, we would currently be a smidgen under the threshold, but if DH gets even a tiny payrise we would be over it. We definitely need child benefit and tax credits to make ends meet...I don't know what we'd do without them. It would cost me too much in childcare to return to work (all three DCs are pre-school-age). Yikes.

talkng about this on 'The Wright Stuff' now

Whether it's enough does depend a lot on where you live. Up here (co Durham) housing costs are much much lower. Without my income we would be on the cusp of middle income, but we would be OK without the benefits, definitely (not going on foreign holidays, but OK!!). I can absolutely see that if we moved to the South East it definitely would be very tight without benefits.

I think they would have to try and balance it out, but that would be a difficult and very political process in itself.

They could certainly get rid of the winter fuel and free TV licences for the over 75s for "rich" pensioners, surely. This would affect my nan, sure, but then she's paying for all sorts of premium TV services and clearly doesn't need a free licence!

I do think that maternity pay is something else again tho - getting rid of that would be catastrophic for equal rights, surely?

"By Alibooobaandthe40pha... Thu 22-Oct-09 09:08:38

ABetaDad - totally agree with you WRT to tax allowances etc. The system needs to be hugely simplifed - low earners should be totally exempt from tax and therefore not need to claim tax credits. The savings that would come from less beauracracy, waste and incorrect payments would be huge. "

I always get a bit frustrated on these threads, because people don't seem to know that for low wage earners, CTC is more than tax paid. DH pays £2540 in tax/NI, but we get £12000 in CTC/WTC (which we need).

ok I'm lost
does

"its averaging out the income Athene, not saying middle class starts at 15K. So 2 adults plus 2 kids - 40K needed. If you earn above that then no state handouts.
One adult plus one child can manage on 20 k (apparently) and don't need state handouts. "

mean that in our family of two adults four children mean they wouldnt take our tax credits away if we earn less than 15+15+5+5+5+5=50k? 50 k seems like a dream yet we are definitely in their middle earners bracket otherwise

I think I would rather pay slightly less tax (relatively - I know tax has to rise to cover the mess from the banking gamblers) and not get the benefits. I get WTC and CTC and CB at the moment.

But then I think that if you live to be 90 and need the last 10 years of your life in a nursing home needing expensive care you should have to sell your house and use all up all your own money before the state pays for it.

It's not about 'showing the poor' it's about being realistic there are certain groups of people that will always need help from the taxpayers and I have no problem with this I?m a tax payer and it's good to know that if anything was to happen to me and force me out of work then I?d still be able to survive, But I don't think taxpayers money should be used to subsidise living costs of everyone who has children it's just not practical. Again I know I sound harsh but the fact is that the govt hasn't got enough money to keep footing the bill, it's mean to take something away when we've been used to it for so long but if we want our economy to recover then changes need to be made and unfortunately that is likely to upset some people

Gosh, DH and are are middle class!
But if we didn't have DD we would be upper class and if we had 2 more we would be lower class.

I had no idea my class was defined by income!

I know people in council housing who have a higher dispoable income than me and I also know a family who are related to Lords and attend balls with duchesses who are generally skint.

Basically they are saying they want to means test every benefit.

So the motivation to do low paid jobs is almost zero.
My friend lives in New Zealand and they have the same situation where her getting a part time job meant they actually had less money than when she was a SAHM on benfits as she had to pay tax plus childcare.

These people in government really can't do sums can they?

This is such a hornets nest for any government to stir up - you could argue that as everyone has a right to the NHS and Schooling then they should to Child Benefit/WTC/ etc etc. However it really isn't as simple as that, dependent on where you live and the cost of living someone earning £30k in scotland is well off, but someone earning £30k in the south east is scraping by. I have a friend who works in London, lives out of London near where her DH works, pays for childcare, DH has own business employing locals (good for the economy) but doesn't yet take an income from his business because if he did he wouldn't have a business - so they are helping the local economy and the general economy, she pays a whack in tax, childcare etc but she would more than likely be in the band to have all of these credits taken away from her. Which would mean that dh would have to take more money out of the business, less going to the local economy/ possibility of business failing blah blah blah.
However I don't have the options of anything but CB at the moment, and if it were totally necessary then I know we would scrape by without it - but if I was to return to work full time to help our financial situation it would only be worth it if we had the tax credits because of the longer hours worked, the more childcare, the more expensive - don't know why I am saying this as you all know the drill!

However I think there definitely needs to be a rethink with regards to the Maternity Pay idea, we would not have survived without it and I think there is a very slippery slope here in terms of mental health - eg if your dh/dp or if you are a single mother - having any form of income taken away from you and not having anything in return would be very distressing - especially if someone who has never worked is entitled to "maternity pay" (can't remember what it is!). I felt very irritated by the fact that I had worked for 17 years and payed tax all that time and when I went on maternity leave I was told that I was entitled to less than if I hadn't bothered working at all. I appreciated the money don't get me wrong but I do think that that situation is just take take take from someone who has gone out and worked hard, to give to someone who hasn't contributed. I also know that my situation was a one off, but I did resent being treated as if I hadn't contributed to the wider economy in general. - Sorry Ranted!

But, Emma, I'm talking about the government giving me theri money. I'm talking about them not taking so much of mine. Greedy Gordon!

I just want childcare which is employed for the sole purpose of going to work to be recognised as a legitimate business expense, just like any other legitimate business expense. If you don't incur a cost of course you wouldn't need a tax break because you haven't spent the money. That would be like me turning in a dinner receipt on my expenses when I didn't buy the dinner.

I think BetaDad's post is very good. (although it's taken my ages to credit it so it's pretty far down)

I'm so sorry. My typing is terrible today.

But, Emma, I'm not talking about the government giving me their money. I'm talking about them not taking so much of mine. Greedy Gordon!

I agree Riven, I think we had all better get used to being quite a bit poorer from now on.

Unless you are a fat cat banker of course in which case you can carry on as you are. Bitter? Moi?

My apologies for the rant, on reflection taking away maternity pay is a little like losing your job in a recession isn't it? Possibly?

The problem is that we have become very comfortable with what is currenlty going on, I am now off to think of a better argument with regards to both losing all benefits and keeping all benefits but would like to go back to sitting on a fence in a green field and not be flamed.

I think the government should ask the bailed out banks to pay back our money before they give as much as £1 in bonuses.

Problem is, it's ALWAYS this group of people who are hammered by new policies. It's electorally attractive to appear to be taking money from the rich to give to the poor. Problem is, it's not the rich who suffer, it's the people who are 'just' into that bracket affected. Which is our family.

Looking into the future, there are proposed policies to make 'middle income' families pay the full whack for university fees - i.e no £3k but £7-10k per year. The argument being that 'lots of middle income families send their children to private schools and can obviously afford these fees.'

That's as maybe, we certainly can't. Our kids will be state educated, because there is simply NO way we could afford private.

What's next - middle income families have to subsidise their own health care? Primary schools?

Agree with the point about the banks paying back their loan. Their priority should be to pay back to teh state before to themselves.

And yes, I think child benefit and other benefits mentioned should be means tested.

what is this 'lots of middle income people send their children private'. Does 7% of the population really represent lots of middle income people?

"Reform says while times are hard, the leanest welfare system focused on the most needy, is all the UK can afford."

This HAS to be true

What they are proposing is inevitable

Lou - I didn't realise that.

It raises another issue though - if the government feels that you need an additional £1k per month to have an acceptable standard of living (which is what I understand tax credits to be about), then surely it is the minimum wage that needs adjusting upwards?

If this is brought in we would lose our child benefit and yet we use our CB to make ends meet. My sil on the other hand would still qualify for her allowance and yet they are in the position of being able to save their CB to fund their childrens university education when the time comes.

Going on income alone isn't always fair (although I can't think of another way) we live in the south east and have a mortgage of £1,000 per month which pays for a 2 up 2 down, dh spends a further £600 on commuting costs. If the job market was good he would look for a job closer to home but at this moment in time any job is better than no job. After paying our mortgage and commuting costs we are left with £400 a month + plus CB which has to cover food and all the bills.

My sil has a mortgage of under £200 per month (5 bed detached house) she was lucky as her husband already had a property when they met so she was able to benefit from the equity. They have no commuting costs as her dh works from home. After mortgage they have £1,500 a month to cover all the bills and yet they would still benefit from the CB. Seems unfair to me.

If you live in an expensive part of the country and left it until your late twenties to buy a property you are shafted.

I don't think it is always this group of people, lily. People ar e only really aware of policies that impact on themselves.