Child Benefit Charge

[Bluepomegranate1]

Thoughts please. My DH has to do annual self-assessment, I don't. He earns more than me and is well above the threshold for payment of the Child Benefit Charge through his tax. In all family bills, he pays 60% and I pay 40% to reflect the differences in salary. The CB is in my name and paid into my account. He figures that it isnt fair for him to have to pay the charge when its me who received the monthly payments, so asks me to give him the full amount received in that tax year, which he then uses towards his tax bill. I figure it isnt fair that Im penalised financially for the fact that he earns more than me, and over the threshold. Based on my salary rather than his, Id only have to repay around half of it. What do others do where the partner not receiving it is the higher earner? Thanks.

@CatchThatPigeon but why? If you were the reason it needed paying back, not him? He'd be entitled to it, it's you who isn't. If finances are separate that is, if they're joined, then I suspect most people don't claim (unless one person needs the NI contributions).

@Bluepomegranate1 If he has to pay it all back then it might be worth keeping the claim but opt out of getting the money. That's what I did when dh went over the threshold. That means no money needs to be paid back.

@MidnightPatrol he would be the one committing fraud not paying it back, not her. If he pooled his money, or was less secretive, then my answer would be different. But if they're going to act as separate people financially, then it makes sense for her to get the CB, and him to pay it back.

It is bizarre, but if he chooses to be secretive with his money and isn't keen on it being pooled for the family then why not? His choice.

@awkigydrs eh?

He’s not entitled to it, because he’s in a household with someone who earns over the threshold.

Do you think in every family where one parent earns over £60k, the child benefit is going to their lower paid partner, and they’re paying the tax bill to fund it?

either parent is entitled to claim it. its for the child. the money is supposed to be used towards essentials for the children. its not for extra income to supplement a lower income. if some of it needs to be paid back its only fair that it comes from the CB itself - hence its called paying back CB.

@MidnightPatrol no I don't think that, I'm the higher rate tax payer and it gets paid to me (and I pay it back)

But because they're separating their finances she is losing out, they're splitting their bills by wages, he is keeping more money back for himself, and she is now losing the CB. I'm saying in their unusual situation, because he's being a bit of a prick, I think he should pay it back himself as the higher rate tax payer.

@CatchThatPigeon I'm talking about their situation, not the policy behind CB.

My husband earns above the threshold so we don't even claim it as it would all need to be paid back regardless of the fact that I earn below, our money is one pot

When I was married, we managed it by stopping claiming it.
I can see he would be peeved to have to “pay something back” he didn’t personally receive if he views his finances as separate to the children.

Perhaps remind him he’d have to pay an awful lot more in maintenance most likely, if you split.

so if CB was paid to your partner and assuming there isnt a huge difference in your pay (as OP says the split in bills is 60/40) would you be okay with paying it back?

@Mollysay not all couples pool all their money. Some people opt to, others don’t.

Both parties here sound like they earn decent money - and he is paying a higher % of bills. This sounds fairly ordinary to me.

It is clearly going to cause a situation if one claims child benefit for themselves, and leaves the other one to fund that via an extra tax bill each year.

@awkigydrs you’re talking about acting as a unit, but them saying you should act wholly as individuals in the lower earner getting the CB at the expense of the higher earner. That makes absolutely no sense.

Your strange financial situation aside - what do you do with the money does it go for the children

Aye but OPs isn't, they have separate finances. She isn't benefitting by his higher wage bar a small disparity in contribution to bills (be interested in who buys most of the childrens things, can guess...). Still means the household isn't eligible, but can see why OP claims it.

Op, I am in a similar position to you. Husband received promotion which put his earnings between the thresholds. I don't see why his promotion should mean a reduction in my income. I have continued to claim and he can do the self assessment. I may change my mind on this down the line, especially as children are older and won't receive CB forever. Our finances are separate with a joint account covering joint and family expenditure. I prefer to keep my financial independence.

so if CB was paid to your partner and assuming there isnt a huge difference in your pay (as OP says the split in bills is 60/40) would you be okay with paying it back?

We pool our money so it's an entirely irrelevant question. But if I was splitting the money and keeping a huge portion for myself, I absolutely wouldn't blame DH for claiming CB and I know it would be my individual responsibility to pay it back.

why are you even commenting when you pool your money? you have no experience of this issue and your comments dont even make sense.

I’m usually the higher earner but for 2024/25, unexpectedly, my partner will have to pay back some of the CB. We have our own accounts then one joint account for living costs.

He made a comment on the same thing, I kind of agree but reminded him that by me working part time he’s essentially saving 50% x 4 days a month in nursery fees a month, and that isn’t a bad deal.

It goes into my account but I use it to pay for DS’s swimming lessons & odds and ends, DH would never begrudge me that as he knows it’s often me who thinks to pick up packs of vests etc

@CatchThatPigeon oh look it's the thread police. I replied because I had an opinion on the situation on what I think is fair on the basis of their situation and separate finances, I didn't give advice on the basis of pooling money. That ok hun?

In your situation it depends -

If I put it in simple terms - if he earns £60000 and you earn £40000 (hence the bills split) and the costs towards the children comes out of the bills so is accounted for in the 40/60 then yes you should give the money lost. So uniform, school meals, school trips, childcare etc is paid at the 60/40 split.

If you pay for some items for the children using the CB - hence it is all used up and the split is on household stuff then no you shouldn't repay because you need that money for the children's costs.

In terms of the overall picture the fairest would be to include the CB (what's left of it) in the 'family pot' so if CB was £100 that's in the family pot and everything on top is 60/40

We stopped claiming once the threshold had been breached. We are married and both parents to the same children so share income (or the children and I, as non-earners, would starve to death).

we don’t have his and her money - we have our money

we are a family so we pool our resources together and share.

all income into joint account and bills, savings etc out from there

your arrangement is how I used to manage finances with flatmates

im the higher earner

In the days of family allowance, there was nothing for the first child, then family allowance was paid for subsequent children. Fathers were taxed appropriately; it was a way to ensure that money went direct to the mothers. It seems that the current set up with Child Benefit is replicating that system.

Why do you describe some degree of financial separation as 'strange'? Many couples have a joint account to pay mortgage, family expenses, that they both put part of their wages into (we do it proportionate to the % of the family income we earn), and a separate account that their wages get paid into. In an interview last week Martin Lewis described this as very common now.