Child benefit to be axed?

[Coolfonz]

Here's a nice article representing some city views...the comments are nice as well! Good old Tory voters!! Rah rah!!

www.citywire.co.uk/personal/-/news/money-property-and-tax/content.aspx?ID=401785&re= 9506&ea=228360

"But if Osborne wants to save real money, Child Benefit is looking increasingly vulnerable after his hatchet job on CTFs. Child Benefit is a universal tax free benefit paid to all parents at a rate of £20.30 a week for the first child and £13.40 a week for subsequent children. Official statistics show that some 7.5 million families receive Child Benefit in respect of 13 million children at an annual cost to the Exchequer of over £7 billion a year and rising - annual increases are index linked. After the axing of Child Trust Funds, Child Benefit could be next on the list."

They could dispense with CB all together reform CTCs so that genuinely hard-up families get protected and save a small fortune on the two. Middle income families would lose out but if personal allowances and the threshold for paying 40% tax was raised, that would compensate.

It's a pity they haven't taken the opportunity to deal with the other universal tax-free benefit... Winter Fuel Allowance. Got to be next to go.

agree with Chil1234. I fully support Child Benefit for families who NEED it. My family and many other families do not need it. I wish the government would take it away from more well off families and use the money for other things.

Ditto Winter Fuel Allowance. Older people in need should get it. But today's pensioners are, on average, amongst the wealthiest in UK society. A large proportion of them do NOT need fuel allowances. They have retired on generous final salary pension schemes, and are home owners with no mortgages. let's restrict the winter fuel allowance to pensioners who are hard up.

TooPragmatic - the problem with means tested benefits for pensioners is that many of them are too proud to claim, even if they really need it - my Dad has only just been persuaded to claim attendance allowance (at the age of 100) though he would have been eligible for some time.

my problem with making it another means tested benefit is that if someone is tootling along quite ok without it, but then circumstances change for the worse, not only do they ahve to wait for CTC , HB, Council Tax Benefits and IS/JSA to be processed before getting any money - they'd also have to wait for the CB to be processed.

I know for me it was only the assurance that my child benefit WOULD be going in that meant I managed to scrape through while waiting for weeks for everything else to be sorted.

They'd just row it in with CTC.... it wouldn't be an additional claim.... and that would add to the savings. Fewer pieces of paper being shuffled around... one payment instead of two.... one department responsible instead of two.

RustyBear, there are certainly all kinds of problems with means-tested benefits. The example you mention is just one of them. However, I don't think that the answer is to simply give the benefit to everyone.

I would prefer more effort to go into overcoming means-testing problems, rather than simply handing out a winter fuel allowance to every over-65 in the country. The country simply can't afford it. In my mind, Child Benefit is a similar situation. You will never get a perfect system but it's better to try than to hand out child benefit to every family in the UK regardless of their level of income. I love getting the Child Benefit (who wouldn't) but I don't strictly need it.

Definitely agree that both Child Benefit and Winter Fuel Allowance should be means tested. My inlaws use their winter fuel allowance as spending money on their 3 week cruise every January!

Over a certain age I can see reason for it being available to all, 80 perhaps? But not at 60/65.

If it was linked to pension credit you wouldn't have to claim it, you could just be paid it automatically if you were eligible for pension credit. That way the people in most need would still get it without applying. Then when they turned 80 everyone could get it automatically.

Child Benefit coudl be on a similar system, or as someone has already said, just tied in to tax credits.

I think you need child benefit even in what appears to be a relatively well off family, it's paid to the mother so the mother has access to some funds that are her own and to ensure the children are all fed no matter what, you read on here regularly about arseholes who don't consider their own children to be their joint financial responsibility and the woman is paying childcare out of her salary or has to ask for toddler group/coffee money.

but CTC can take weeks to get sorted and get payments coming through (as did all the rest of mine recently as well) - I could easily see loans from the crisis fund rocketing if they combined CTC and CB.........

Toccatanfudge, you raise some good issues. But surely the government response should be try and improve how efficient the admin sytems are. Not just throw money at everyone?

I think the6 need to do some MAJOR overhalling of the CTC system before they even considered combining it with CB.

I have never once in nearly 10yrs had any issues with my CB being paid on time, or the correct amount, or been asked to pay any back

CTC..........well..........hands up who DOESN'T know someone who's had issues with them

maybe the CB bods could run CTC?

on the other hand, CB is a very simple system. ie they just pay everyone with a child.

CTC is, by definition, very complex. much more scope for things to go wrong.

mamatomany.... the state can't be responsible for relationships where the husband is a tight-fisted bully by giving women pocket money. Relate might be more appropriate. If a family has money you have to assume they're responsible enough to arrange their finances fairly - whatever the reality might be.

but Chil - the reality for MANY women is that they don't have access to any money other than the CB and perhaps if they're luckky some "house keeping" money.

tbh - the thought of CB and CTC being combined as things stand at the moment fills me with absolute terror! Things are uncertain enough without worrying that CB won't come in as well as the rest of it.........

@TooPragmatic... the arguments should be more how we make the state contribution to child rearing simpler, quicker and fairer. Whether it's CTC, CB or something entirely new, that's the challenge for the pliticians responsible.

yes, Chil1234, my point is only that the focus should be on improving the admin (making it "simpler, quicker and fairer" as you put it). Blanket payments are an easy way out.

and how much of the "savings" on combining the two/changing the system do you think would be spent on setting the thing up and correcting mistakes.

Can't say I'm confident with past record on set up costs and huge errors that have cost £millions that they'd do any better a job of saving money by combining it.......

so, what what do you suggest T&C?

I agree with Winter Fuel Allowance. Ludicrous! They could at least raise the lower age limit.

But the trouble with means-testing is that it hits the people in the middle. You'd get the situation where someone with 4 children on benefits would be getting about £3000 a year - and someone who was over the threshold (whatever that was deemed to be) would be getting nowt.

Maybe some people wouldn't notice losing the child benefit, but mine pays for the dc's school dinners, and I would notice its loss.

f*ck knows

but the thought of them faffing around with the child benefit with the number of problems in processing every other benefit that people on low incomes are eligible for scares the be-jesus out of me

I've seen one report which recommends taxing child benefit. I think that would be fair actually.

I'd be very interested to see the figures for how much it costs to administer means testing. CB is a very simple system. Tax Credits on the other hand are gargantuan in their complexity because of means testing. I wonder how much that costs to administer? It's very easy to say "well we'll pay to everyone earning less than £35,000", but people's incomes go up and down, and come from a variety of different sources, so it's very complicated to administer.

Bramshott, the clawback system that DaisyMooSteiner mentions would help reduce the complexity. You could pay everyone the CB and then claw it back on people's annual tax return forms.

Although most people don't complete tax returns

Doesn't mean to say the UK couldn't introduce them. Everyone in both the US and Canada has to. They are a good way of making sure that people get the benefits they are entitled to. most benefits are means-tested in this way.