Child Benefit axed for higher income families

tiff

I feel like its punishing us. DH works long hours and travels abroad with work quite often. I have two children, one still at primary. I had two part time jobs but was made redundant from one of them in July. I've been applying for jobs but nothing yet. We spent the last year getting out of debt but we need more income to stay out of debt completely. DH is in line for a pay rise which will take him to £42,500 so just under the threshold. The job I was made redundant from was in an after school club at my daughter's school which was closed down due to lack of demand. So if I worked full time there is no child care and my 10 year old is too young to stay at home alone.

pinkclouds

I find it very disappointing that it will not be means-tested against household income. While I do understand and broadly agree with limiting child benefit - even to my detriment - I do not see the justice in some households of £86k+ receiving child benefit when other households of £44k+ will not. Presumably (in a slightly bitter exaggeration) the intent is for every SAHM to sign on the dole in 3 years' time? At a rough guess, that should be between 3 to 6 times the current bill. Never mind, I suppose it is still early days and may yet be amended. And if it isn't, then I have some time to get my head around the idea. (I'm much more excited about the total benefit cap - about time any limit was considered. Although, based on the child benefit proposals, it seems a trifle inconsistent to measure that against total household income.)

lynnexxxo

Surely anyone earning near the threshold would be better of dropping some hours (hence having more time with their kids and possibly less childcare expenses) than losing out on the child benefit?

tiff

pinkclouds wrote: »

I find it very disappointing that it will not be means-tested against household income. While I do understand and broadly agree with limiting child benefit - even to my detriment - I do not see the justice in some households of £86k+ receiving child benefit when other households of £44k+ will not. Presumably (in a slightly bitter exaggeration) the intent is for every SAHM to sign on the dole in 3 years' time? At a rough guess, that should be between 3 to 6 times the current bill. Never mind, I suppose it is still early days and may yet be amended. And if it isn't, then I have some time to get my head around the idea. (I'm much more excited about the total benefit cap - about time any limit was considered. Although, based on the child benefit proposals, it seems a trifle inconsistent to measure that against total household income.)

How can a SAHM sign on if they havent worked for the previous two years?

WestonDave

If you are near the threshold another alternative is to make additional pension contributions or charitable donations as they will lower your taxable income - if judged right you can get yourself back under the threshold whilst (in the case of pension contributions) holding onto the money (albeit locked away for retirement). It will mean keeping a careful eye on your income and sorting it out in March but for example if someone were heading to be £50 over the limit it would make sense to quickly make a £50 donation to charity rather than lose maybe £1000 or more in benefits.

pinkclouds

lynnexxxo wrote: »

Surely anyone earning near the threshold would be better of dropping some hours (hence having more time with their kids and possibly less childcare expenses) than losing out on the child benefit?

That only applies if you are paid by the hour and/or get paid for overtime. A useful suggestion for some though.

Spendless

boliston wrote: »

I thought the whole point of a "benefit" is that it's designed to help those on low incomes - if a millionaire can claim that same benefit without question then it's not being properly targeted.

People should realise that having kids is an expensive hobby!

The welfare state was designed to do 3 things, to alleviate poverty (eg income support, top up benefits) to 'compensate' for additional costs (child benefit, DLA. winter fuel allowance) and to replace a lost income (JSA, state pensions). Not just to help those on low incomes.

tiff wrote: »

I feel like its punishing us. DH works long hours and travels abroad with work quite often. I have two children, one still at primary. I had two part time jobs but was made redundant from one of them in July. I've been applying for jobs but nothing yet. We spent the last year getting out of debt but we need more income to stay out of debt completely. DH is in line for a pay rise which will take him to £42,500 so just under the threshold. The job I was made redundant from was in an after school club at my daughter's school which was closed down due to lack of demand. So if I worked full time there is no child care and my 10 year old is too young to stay at home alone.

I have a similar situation, though at least there are childcare options here. The temp p-time job I was offerred back in May and have been working there since, I've come home early today as there was no work, I'm not going in tomorrow either and have my fingers crossed that by Thursday my next day in they'll be something. I have an interview for a permanent job next week, so am really hoping I get it.

lynnexxxo wrote: »

Surely anyone earning near the threshold would be better of dropping some hours (hence having more time with their kids and possibly less childcare expenses) than losing out on the child benefit?

My husband is near that line, but he is salaried, not paid by an hourly rate so that isn't an option even if we wished to take it (which we don't).

pinkclouds

WestonDave wrote: »

If you are near the threshold another alternative is to make additional pension contributions or charitable donations as they will lower your taxable income - if judged right you can get yourself back under the threshold whilst (in the case of pension contributions) holding onto the money (albeit locked away for retirement). It will mean keeping a careful eye on your income and sorting it out in March but for example if someone were heading to be £50 over the limit it would make sense to quickly make a £50 donation to charity rather than lose maybe £1000 or more in benefits.

Good point. Doh.

Clive_Woody

So those paying 40% tax on their earning will not be eligible for child benefits to support their children, but their taxes will be used to fund lower earners who need benefits to pay for the children they could not afford to look after otherwise. Brilliant.

WestonDave

The other thing to remember is that this higher rate scrapping is the PR sop to the other announcement - capping family benefits at £500 per week all in including housing. By the time you take couples rate JSA and a couple of child benefit payments out of that, there won't be a lot of room left for housing benefit and council tax benefit especially in London. The only way they stood any chance of getting that one through was if there was some high profile pain for higher earners which they presumably feel they need to create without clocking up a load of admin costs on a means tested system.