Child benefit to be scrapped for higher rate tax payers from 2013

vivatifosi

George Osborne doing the rounds of TV interviews this morning and this is a breaking story:

http://www.telegraph.co.uk/news/newstopics/politics/8040632/Child-benefit-to-be-withdrawn-from-middle-classes.html

So from 2013, no household where anyone earns more than £44,000 a year will be eligible for child benefit.
"For higher rate taxpayers, we're going to withdraw this," he told ITV's Daybreak. "It's a tough but fair decision."
He added: "It's just not fair to ask someone who's on £15 or £20,000 a year to be paying for the child benefit of someone who's on £50,000 or even more."
"At any other time, I wouldn't do this. But Labour left us with a heck of a mess."

JonnyBravo

Tough but fair agreed.

I'm in favour of it.

Generali

The feminists will have a fit. Universal family allowances were the beginning of the feminist movement in the UK, pre-dating the suffragettes. In many cases it was the same people campaigning for family allowances and universal adult suffrage.

vivatifosi

I think times have changed since then Gen.

If there's an issue with it, it is that it isn't truly means tested. Therefore you could have two adults earning just under the threshhold (say £80k combined) who would still get it, but a family with one working parent that just scrapes in will have to pay. This is a cheap way of doing it in terms of administration, but probably not the fairest.

I agree with Jonny though, it has to happen.

chucky

vivatifosi wrote: »

George Osborne doing the rounds of TV interviews this morning and this is a breaking story:

http://www.telegraph.co.uk/news/newstopics/politics/8040632/Child-benefit-to-be-withdrawn-from-middle-classes.html

So from 2013, no household where anyone earns more than £44,000 a year will be eligible for child benefit.
"For higher rate taxpayers, we're going to withdraw this," he told ITV's Daybreak. "It's a tough but fair decision."
He added: "It's just not fair to ask someone who's on £15 or £20,000 a year to be paying for the child benefit of someone who's on £50,000 or even more."
"At any other time, I wouldn't do this. But Labour left us with a heck of a mess."

it's a tough one - one thing that i'm not sure about is

there's a difference between

scrapped for higher rate tax payers

and

where anyone earns more than £44,000 a year will be eligible for child benefit

one person on £45k won't receive child benefit but a house hold with 2 times £25k will receive child benefit.

it should be household income instead of making it 'higher rate tax payers'.
it will complicate the system and make others better off when they shouldn't be.

it's a start but i'm not convinced

Really2

So does this mean couple both earning under top rate, say £43K each (total income £86K) would get it but a household with one working on £45K would not?

I agree with the cut, just interested on how it will work?

chucknorris

I think this had to happen, if I was chancellor I would have been inclined to want to instigate it even in non recession times, however for political reasons I could understand why it would not have been introduced in better times.

It might need significant tinkering though regarding the issue about household v individual income

Graham_Devon

I'd love to be able to back this one up, but unfortauntely I can't, and see it as a massive blunder by the coalition.

Could even be on par with the 10p tax rate once the media has finished with it.

The problem is, it's based on one persons income, so you have various scenarios:

- Father currently receives the benefit, earns £46,000 a year. Mother earns nothing. So a simple transfer and the child benefit goes to the mother. Generally it's the mother that has it anyway, so could be the other way around.

- Household income is £75,000. Father earns £40,000, Mother eanrs £35,000. They continue to get child benefit.

- Single mother earns £47,000. Child benefit is taken away. Family above has an extra £28,000 a year, but continues to get child benefit.

I do understand how costly it would be to means test everyone. But in this case, if the cost outweighs the benefit, they should have just left it. There are far too many holes in this one, and it's just going to annoy people. And I think they have the right to be annoyed in all honesty.

Saves around £1bn apparently. Going to cost so much more for politics.

True lib dems will be pretty happy with it, but I think this is a massive blunder for the tories.

Doing something, in this case, is far far worse than doing nothing.

chucky

Graham_Devon wrote: »

I'd love to be able to back this one up, but unfortauntely I can't, and see it as a massive blunder by the coalition.

and so it begins...

there will be many more massive blunders and people will start to want Labour to win the next General Election to get this 'blundering' Government out of power...

funguy

It seems fair that in these times benefits are cut to help us through the recession! However all benefits need cut so we all share the burden equally....lets look at all other social benefits and see if the lower earners can do their bit to help this country out of the recession too!

Graham_Devon

chucky wrote: »

and so it begins...

there will be many more massive blunders and people will start to want Labour to win the next General Election to get this 'blundering' Government out of power...

It's a big blunder in my mind, but don't think it's enough to see an outgoing labour party win an election on!

Will only hit around 10% of the richest in society where both earn enough for higher rate tax. No one else will be that bothered....just the media will be all over this for a while I reckon.