Child Benefit axed for higher income families

melancholly

i can't see how it will be cost effective to do the means testing.... seems more symbolic than actually beneficial to me.... i can see this going down very badly for those who have one partner earning much more than other, but with one over the threshold, as they lose out versus two people who both earn good wages just under the threshold

i know it can never be fully fair, but the amount of money being saved, in the grand scheme of things, this is just surprising.

(why can't the government sell some of the shares in the bank that were bought to cut the deficit? am i missing something?!)

Spendless

Though we are borderline with hubby's salary, we will come over the threshold due to his 'benefits in kind' his company car, fuel and BUPA. I was interested to see the post that said a £45k income should give a net income of £33K we are not anywhere near that figure. I guess it's to do with hubby's negative tax code? :cool:

That's something that those on £30k plus salaries might need to watch, if you have benefits in kind, as my guess is your CB will stop, if your salary + benefits take you over the higher rate.

Princess_Coupon

melancholly wrote: »

i can see this going down very badly for those who have one partner earning much more than other, but with one over the threshold, as they lose out versus two people who both earn good wages just under the threshold

A couple also has the advantage of getting 2 tax free allowances rather than 1. So a couple both on 40k will still get CB and pay £1,500 less tax a year (from April 2011)
Than the single wage family who earn £45k who will loose their CB.

Seems very unfair, I understand why they have done it this way, as the paye system can instantly identify those eligiable or not, when a joint income would require forms so admin costs.
This will not be popular! (I am a single wage family along way off £44K so totally unaffected)

Imp

gonzo127 wrote: »

to be honest from my point of veiw anyone who is struggling on 44k a year must have over streached themselves quite badly, my household income including all benifits we are entitled to is under 30k and we survive on that with a family of 5, mortgage, other debts etc

Someone who just ends up in the higher tax bracket will be taking home under £33k, so not very different to your household income.

tooldle

I do indeed mean two parent families with one wage earner. I had assumed that there are far more of these as single income families that there ever would be single parent households, and hence none or little in the way of childcare costs. There will always be exceptions, and single parents would be a case in point. Myself, we are a two income household and to do this we incur childcare costs.

sassyblue

Do you think they'll ammend their oversight, a single parent earning over 44K won't get child benefit whereas a couple who each earn £40K will still get the benefit?

That's just not right, it should be 44k per household.

Kate78

sassyblue wrote: »

That's just not right, it should be 44k per household.

This would be fairer, I agree.

ceridwen

csh wrote: »

The article says planned from 2013 but tbh I can't see it actually happening.

It would cost more to implement than they would save. I forsee another tax credit call centre style disaster with this one.

Also what may become a famaliar senario: father earns just below the threshold, family lose tax credit and child benefit for 3 children due to mothers low income earnings just tipping them over. So the mother gives up the 16 hr a week or whatever job.

There is another way to look at that scenario though - the lower-paid parent giving up their part-time income and that job then being available for someone else who would otherwise be unemployed.

Swings and roundabouts...snakes and ladders...

ceridwen

got-it-spend-it wrote: »

But for someone living in a relatively expensive part of the country, who has bought a house near the top of the market, went to university since the abolition of grants so has a student loan to pay back too then suddenly £44k household income isn't huge at all.

It is huge to someone on less than National Average Salary of £26,000pa. Its astonishing to someone on National Minimum Wage.

jellyhead

I don't agree with removing child benefit at all (it's the only stable reliable income if a vulnerable woman flees violence), but we've done that to death in other threads.

If child benefit is to be withdrawn from the higher earners then why on earth isn't it just absorbed into the tax credits system which looks at household income? It's bonkers to give CB to a family where both parents earn 40k but not to a family where 1 earns over the threshold but their joint income is lower than the 80k of the other couple.

Tax credits figures could be readjusted to give an extra allowance for CB, surely, and their thresholds adjusted so that the people who get the CB aren't richer than the ones who don't.