im so anxious about threats to cut ctc...

[em83]

god i feel so depressed about the threatened cut to ctc, i have been following the news religiously about this new emergency budget, and have just read an updat which was posted tonigha 22.10 which states that incomes £30.000 or over will not be entitled to ctc

im so pissed off with this and feel so anxious

chil, I guess we'll find out on Tuesday, but the figures being touted are £24k as a cut off.

If, as a family, you're bringing in an income of say £25k (really not a lot of money), for folk with 2 kids over the age of 13 that's almost £90 a week knocked off their income! That's nigh on £400 worse off each month with a net pay of around £1600, a rather dramatic adjustment to make.

Add onto that the potential increases in VAT and NI, the possibility of rising interest rates/pay cuts/freezes, then I think, respresented as a percentage, it's fair to say that those people will take a disproportionate hit.

@itsybitsy08. That's not what I said.

To use the same example.... .You declare £24k gross income and you also declare £4k childcare costs. Your TC entitlement is calculated based on your income with the childcare taken off (there is a maximum you can claim for the childcare).... If you declare £24k but you do not declare any childcare costs your TC entitlement is worked out on your earnings with no deductions. If you run that example through here a couple with one child over 1, 24k income, £77/week childcare, you'll find they'd get £72.89/week total tax credits. Remove the childcare and their credits drop to £11.29/week.

I don't know why this seems such a difficult concept.

what a surprise this has come to a 'who and who cannot have children, based on income' thread.

"the figures being touted are £24k as a cut off"

From the LD manifesto... and the Tory manifesto said something different. And there is a massive difference between what's the financially prudent thing to do and what's the politically prudent thing to do.

Example.... pre the election, assuming a Tory victory and demands for big spending cuts, civil servants did quite a lot of work on plans to scrap/means-test the universal Winter Fuel Allowance. But the plans were not used. Not because WFA is a fair and affordable system (it isn't) but because the new government are well aware that headlines about 'pensioners condemned to freeze this winter!!!' would be political death.

Like I said, Chil, we'll see come Tuesday.

I cannot believe some of the posts on this thread. The government needs to support families, especially those who are trying to survive above poverty, encouraging/supporting young people to give them the best possible start in life can only inspire them to lead our future generations into a thriving economy not dependant on credit culture!
It is a parents responsibility to teach their child about healthy eating/exercise/budgeting/job prospects/education....this does not mean the government should not show its support to those on a low income who are struggling to provide for their family. Tax credits do not give us luxury items like tvs or holidays they give us a chance to teach our children to shop around, eat healthily and value time with our parents....or are we supposed to both work full time and only see our children at bedtime?...Then we could afford all the luxuries...would they be happy children? We lead by example and show our children work hard and value family time, build strong relationships and become well balanced and knowledgable adults.

I felt bullied into returning to work after my first child was born, it is no longer acceptable to be a full time Mother!...teaching your child they ways of the world is now up to childcare providers. As a result I went back when she was 6 months old. Tax credits were the only reason it was financially viable to do so, the high costs of childcare, travel to work etc meant I barely earnt anything by going to work.(my partner works full time....60+ hours a week). As my career progressed I went on to a fulltime Management position.....and struggled to cope emotionally with not being around for my daughter.

I know there is an argument against our benefits system, I agree with much of it, but what about the value of good parenting? We dont live off the government, we work hard, but their support makes it easier to give our children a better start in life.

Circumstances change, sometimes life is hard, sometimes you find yourself needing a bit more help to get by....why should we feel guilty....I want whats best for my children.

I am assuming in calculating TCs the govt had a ballpark figure which they considered offered a decent standard of living and they were worked out to that end so to take them away is effectively forcing many families to live below a comfortable level which is a disgrace

To those who think that children should only be a preserve of the rich.
who do you think will look after your grandchildren at nursery, empty your bins or care for you in a nursing home if people on low incomes don't reproduce?
some jobs are essential to the running of society and our collective well being, but paid poorly or not valued at all.
according to the New economics foundation 'a bit rich' report a hospital cleaner on 6 odd quid an hour generates £10 pounds of social value for every £1 he or she earns. according to some on here a person doing this valuable job is a feckless idiot who should not be allowed to have children,because they don't do something well paid and oh so usefull like ooh a city banker perhaps. maybe the 25 billion lost each year by tax avoidance by the super rich might be more worth disaproving of than the sin of claiming tax credits.

cheap immigrants skeleton

imho,if they do go ahead with these cuts then there will be a lot of people "fiddling" the system....

how can they class a joint income 25000-£30000 a middle income? the lowest being what ? the x amount of people who are unemployed? speaks real volumes that!
we are being penalised because we work...

may i also state that all of these threats etc are being claimed by the deputy prime minister and not david cameron himself !!!

i cant get over the fact that tax credits may be stopped if income is over £30000 regardless of the number of children you have

im just wondering what would happen to the different elememts, as i get a disabled element for my son, would this be stopped too ?

I agree riven.salaries mean nothing when filling in forms as there is no 'outgoings' calculated.Eg housing costs vary everywhere abd some people pay a fortune to travel to and from work

is it the child tax being cut in my case i get £130 a mnth
or child benefit which i get £40 a mnth?

I've had a look at the IFS report, which is what all the news reports are being based on and from what I understand there is some massive scaremongering going on (probably because most journalists don't understand Tax Credits). This is my understanding (please note I cannot predict what will actually happen in the budget!)

It might help to briefly explain how tax credits are calculated. Basically, there are a number of amounts of money called 'elements' (working over 16 hours a week, working over 30 hours a week, couple and lone parent element, the amount spent on childcare up to a certain amount, a family element and then an amount for each child) which are added together to give a total theoretical entitlement to working and child tax credits. This amount is then gradually reduced based on the household income. The first £6420 of income is ignored and then for every £1 that you earn above this, 39p is taken off your tax credits entitlement.

Once the amount of tax credits has been reduced to £545 it is currently frozen at this amount until your income reaches £50K. So, in practice if you only have 1 child then anyone on an income between about £24 and £50K will get £545 a year.

For anyone with an income of above £50K the current system dictates that they have their family element (the £545) reduced by 6p for every £1 they earn over £50K. So, you will continue to receive something until your income reaches about £59K.

The proposals about 'no child tax credits if you earn over £25K' which we keep reading about in the press are actually that this £50,000 threshold at which you are guaranteed to receive at least £545 is removed completely. Because of 39p being removed for every £1 you earn, in practice this would mean that if you have 1 child then you would not receive anything in tax credits once your income reached about £25,000. If you have more than 1 child then you would carry on getting some money until your income reached a higher level (about £31K for 2 kids, £37K for 3 kids etc etc).

The jist of all this in case you didn't follow this (hideously complicated system) - if you currently get more than £545 a year in tax credits (£1090 if you have a baby under 1 year) then you shouldn't be affected if these proposals are put into practice. If you currently get £545 or less then you may get a reduced amount or nothing.

Hopefully this should reassure people a bit. Certainly don't go giving up your job or reducing your hours - tax credits are currently are likely to continue to be reduced on a gradual basis and you should never be in a situation where you will be better off overall by earning less money at work, at least in terms of tax credits.

Noddy, i agree that outgoings are not calculated but then it could be argued that why should people be subsidised for living in a more expensive area.

en83, I am worried to as it looks like we too may fall into the area that is cut, 25 to 35k, if this is the case we will be up shit creek.

As I previously said dh has had no payrise for 2 years and the company has made massive cutbacks already. I am a midwife in the nhs so not on mega bucks myself! Without tax credits we will struggle.

thanks thewoman interesting

You can't just disrupt a family set up by upping sticks and miving away from friends and family though!

Thanks for that TWFU, I think that makes sense .

It does seem though, from what you say, if you have one child that those earning £50k will lose the same amount as those earning £25k, is that right?

geek im trying not to think of it but its so worrying and stressful, even if i went on to nightshift to cut out childcare costs we would not manage...
i will be glued to the tv on tuesday to see whats what !

Noddy, that isn't my arguement at all, i agree that outgoings should be considered. I was just pointing out that is what others/the government may argue.

Me too em. We can hand hold!

Not a good position to be in.

35k as a single income would put you in the 40% tax bracket, and by mn's standard you would then be considered one of the filthy rich.

But what about families earning 35k who get that £545 + childcare costs? It is one thing to take away £545 a year but another thing to remove the childcare?

If you earn 35k on one way with a SAHP then thats one thing but if you both earn 18k each (am guessing about 2k take home between you?) then pay out childcare for two children at £1200 a month then you will have £800 left over - one of you is better off not working. Your pay would then be 18k which would put you in the bracket that could claim