Emergency Budget: tax credit cuts for millions

Former_MSE_Guy · 22 June 2010 at 12:01PM

This is the discussion thread for the following MSE News Story:

Read the full story:

dmg24 · 22 June 2010 at 1:18PM

Can we have some figures to back up the statement please? It is difficult to quantify millions. Thank you.

mitchaa · 22 June 2010 at 1:18PM

Baby element gone.
SMG limited to 1st child only.
Lower £40k threshold.
Mothers to seek work when child goes to school? (Possible Income Support limit to age 5?)
Child benefit frozen for 3yrs
Healthy eating grant gone.
Housing benefit capped at maximum £400pw
VAT upto 20%

All good so far.

sinstar · 22 June 2010 at 1:24PM

The wording of that makes it seem a lot scarier than I think it is.

The basic family element of child tax credits is worth £10.50 per week. Everyone with a child in their household would get this £10.50 a week as long as their income was below approx. £50,000. That threshold has now changed to £40,000. If your household income is below £40,000 you won't notice any change to your tax credits caused by this particular measure.

As far as I can see the baby element of tax credits is being withdrawn. This is also currently worth £10.50 per week. At the moment it means that families with a child under the age of one get an extra £10.50 p/w (depending on their income) while they have a child under the age of one. So if you have a child under one, this will reduce your tax credits, but only to the amount they would have reduced to anyway, when your child turned one.

Emmamumof2 · 22 June 2010 at 1:28PM

But he has just said "We will provide additional support for families in poverty. I will increase the child element of child tax credits."

sinstar · 22 June 2010 at 1:29PM

An increase of £150 per year on the child element... so removing the baby element reduces maximum entitlement by £547.50 for one year

... but for each child you have your maximum entitlement will increase by £150 per year for the foreseeable future :j

mitchaa · 22 June 2010 at 1:29PM

sinstar wrote: »

The wording of that makes it seem a lot scarier than I think it is.

The basic family element of child tax credits is worth £10.50 per week. Everyone with a child in their household would get this £10.50 a week as long as their income was below approx. £50,000. That threshold has now changed to £40,000. If your household income is below £40,000 you won't notice any change to your tax credits caused by this particular measure.

As far as I can see the baby element of tax credits is being withdrawn. This is also currently worth £10.50 per week. At the moment it means that families with a child under the age of one get an extra £10.50 p/w (depending on their income) while they have a child under the age of one. So if you have a child under one, this will reduce your tax credits, but only to the amount they would have reduced to anyway, when your child turned one.

I think you have misunderstood. £40k is the new maximum limit. It will therefore start tapering off much earlier. So for example you may have been earning £35k just now and getting the basic £545pa but now it will be less as it is being tapered much earlier. Out of that £545, you may get £300 of it or so.

£40k will be the limit where the award is £0 in other words. £39k may get £50, £38k £150 and so on and on

Baby element has gone completely so £545 down straight away. (For 1 yr)

sinstar · 22 June 2010 at 1:31PM

I thought £40k is the new taper point? For example at the moment the family element only tapers to £0 when your income is approx. £58k as far as I am aware.

Penny-Pincher!! · 22 June 2010 at 1:31PM

All DLA claimants new and exisiting from 2013 will have medicals but shorter form filling.

All sounds fair so far.

PP
xx

KxMx · 22 June 2010 at 1:34PM

I agree it does seem fair. All other medical benefits include a medical exam so should DLA should to. And realistically they might be out of power then!