Should child benefit be means tested?

[JustineMumsnet]

There's a new report from the Tax Payers' Alliance which recommends means testing for child benefit - possibly scrapping it for households with an income of more than £50 000. Channel Five Live would like to know what mums think of the idea?

(Am going on at 11)

Custy why would "your" CB be paying for their pimms?

Well it depends on how many DC you have. In some parts of the country 50k for say 4 kids isn't that much.

High-income households have all their CB clawed back in tax anyay, so means-testing would make no difference to what's paid out, while raising administration costs and undermining the principle of universality.

No, because the administrative cost of means-testing Child Benefit would outweigh any savings achieved through cutting it for high earners.

No - it would cause a lot of resentment. there's already a feeling among middle and high earners that they the 'haves' are paying too much for the 'have nots' - if you take away the one thing they do get I think it would be a very unpopular move.

50k would mean no tax credits, right? So assuming one partner stays at home and one partner earns 50k, then a rough budget would be:

50k take home = £2900
average mortgage: £900 per month
7%ish for pension: £200
various insurances: £100
average council tax/water/gas/electric/TV/broadband: £320 per month
Foor per month: £500
Going out as a family once a week for a meal: £160
Car hire purchase or loan perhaps?/petrol: £150
Savings (£150 fairly modest?): £150
Once a year holiday, say £1500?: £125 per month

We are now down to £295 per month remaining to spend on fripperies such as clothes, going out, erm boilers exploding, that sort of thing.

It isn't really a VAST amount for a fairly modest standard of living.

I think £900 mortgage is cheap if you are in london. Petrol could be much higher as well. At one point last year we were spending £300 just to get dh to work (45 min commute).

Yes - I'm just drafting a sort of very middling situation. It isn't really a lot of money. I have a lot of friends who can't work because the childcare costs are more than they would earn - this would apply to a lot of people with children under school age - it's not your whole LIFE but it can easily be 8-10 years of it!

No.

You know what will happen.

The government will annouce that it will save £X by 2013 or whenever.

Next steps are:

Employ loads of people on nice public sector packages to adminster it, add to ginormous public sector pensions liability, contract out quite a lot to Crapita or similar who will then fail to deliver, come back and demand more public money which the govt. will hand over because they are contractually obliged to.

The whole thing will be delivered 5 years late, millions over budget and will save nothing. It will however make life just that little bit harder for lots and lots of people.

If the Tories do this they will seriously piss me off.

Agree with Nancy -- i pay vastly more in tax than i will ever receive in child benefit but i appreciate receiving it, partly because i think of it as a rare (and small) symbol of the value of mothers and children to society. Agree that tax relief on childcare costs would ease the poverty trap and increase the whole tax take though.

morningpaper, good set up. I think a lot of people would think £160 was an awful lot to spend on a meal.

Yes, we earn about £50k, so very little tax credits. (£4 a week, yes that's worth it )I work a few hours, but most of that is taken up with childcare.

A lot of people's mortgages are a lot more than that (ours is £1250 a month for a 2.5 bed terrace in the SE)

Car insurance, life insurance, house insurance - i think ours is more like £150 a month. Car loan is £150 a month, petrol at least another £50 (and we only use it 2-3 days a week for essential trips)

Pensions are 10% (so can't afford to pay into it!!)

Don't forget dentist, prescriptions, haircuts (which I don't bother with )
There's always something in the house which explodes/craps out/melts/is destroyed by DC's isn't there

never bloody ending...

cutting £80 from our budget a month would be pretty devastating actually.

I think a lot of people would think £160 was an awful lot to spend on a meal.

That was once a week @ £40, so represented a monthly cost

absolutely EE. TBH, most people on the "50k" family salary are probably fairly fucked every month

sorry, misread your email (and I was being so careful )
Yes, that's not much at all - even half of that would just about cover a takeaway..

did anyone see justine btw? how did she get on?

I might buck the trend and say that anyone paying higher tax shouldn't be entitled, but that CB should be paid to the lowest earner (ie no CB if both parents earn enough for higher rate taxation) Until this summer both DH and I both paid higher tax and the CB goes straight into the child trust fund for our two. Now I am no longer earning we will rely on it, but I do think it is slightly outdated for todays society. It was conceived at a time when married women didn't work and isn't flexible enough for a different type of society.
But I do agree the bureaucracy would probably be a nightmare (just dealing with the new studentfinanceengland is pretty hellish).
I wonder how many very wealthy families claim it?

I think if this squeezing of middle-income people continues, then there will be an increase in creative accounting, including 'divorces'. There comes a tippiing point, which is creeping ever closer, where it will not pay you to stay together as a family. Obviously this happens in many low-income households, and also in very rich ones (husband's company in financial trouble quickly transferring assets to wife, then divorcing = bingo, supposedly no money) -but I think it will occur in the future among the middle classes.

Someone already mentioned the Education Maintenance Allowance, which is a real racket, and I know someone who is divorced, and openly says she gets free school meals for four children etc etc etc - and now a means-tested bursary for oldest at private school, yet the husband is rather frequently around the 5-bed house and in the 4X4.

No, I agree with wasabi; it's another way of throwing money down the drain. Cheaper to stay as we are.

And btw we would be way under the 50k limit, so have absolutely no personal axe to grind.

Thing is, that kind of level of income is the cut off point for a lot of things - child tax credits, full university loans etc - each of these may not be much in itself, but added together you do seem to lose an awful lot.

No No No No No

Another middle income earner, single parent living in the SE with enormous rent for a tiny house. I rely on my CB and basic TC of £45 to pay for food.

I would be in deep trouble without it.

Need to lobby the Taxpayers Alliance.

In fact might link the thread and send it to them.

So Clemette, DH and I as higher-rate taxpayers should not be able to claim child benefit, even though in order to work and pay tax we have to pay for childcare, including our nanny's tax and NI, from our taxed income? But you should be entitled to it because you have chosen to give up your well-paid job and study instead?

Also discriminatory towards women/mothers imo

i knew a girl whose mother was a sequential marrier of millionaires. her children got full maintenance grants for university (rare even in those days) because she had never worked or received formal child support from their fathers no need with so much money washing around and so officially had no income. apparently no questions were ever asked about how she'd managed to find the fees for the top public schools they'd attended

Soo if cutting CB is not a good thing but government spending needs to be cut to reduce the debt burden, what would we do?

Obviously waste needs to be addressed, but to some extent in large organisations some amount of waste is inevitable...

I think putting VAT back to 17.5 is needed, was such a silly cut, could even up it a little to say 20%, we didn't notice 2.5% cut, would we notice 2.5% rise? I can't think of anything else I would be happy with?

no
because even if the husband earns a fortune he might still not give the wife much money, So it might be the only money she gets,
also a lot of people would loose out as they would be just over, but not well off.