MSE News: Higher rate tax payers to lose child benefit

northwest1965

I probably have missed this as I havent redy every reply:o but heres my question. How will it work say for instance if my OH pays tax at the higher rate but has an ex wife who has remarried with 2 kids? Will it get stopped for her? Or will it be based on her h income as they dont live with us.

2010

The Tories come in promising savage and massive spending cuts to save the economy from the horrendous mess and debt Labour has left us in and what happens.

They are going to stop CB from 2013 for anyone earning over £44,000 a year.
This affects about 1.2 million people who don`t really need it anyway.
Well Big deal,what a pathetic saving.

If there are two incomes coming in the household at £40k each, these people are unaffected.
Fair but firm

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I don`t think so.

It may have been a better move to scrap CB altogether and make people take responsibility if they want to bring children into the world.

bluebluecow

I agree with all above that it should be on Joint Income, not a single high earners when only one person works.

Although it wont affect us YET. As I was on IB but started a 3 yr business management degree course, and also doing my AAT (accountancy training) alongside it. My Husband works nights as a care assistant as we have a disabled child and it cuts on childcare costs, £29.50 per day for my 4 yr old 2 days a week, and £28 per week for childcare for my 5+7 yr old for 2 days afterschool care.

BUT my friend has been a stay at home mum by choice, for the 1st 5yrs of her childrens life, Her husband earns just over the high rate tax cutoff, so they will lose child benifit for 2 children. Like me she has returned to college to train as a hairdresser, already because of the household income she has to pay £1850 a year in course fees, not including things like head blocks, scissors ect. They also have to pay between £28-70 of childcare a week for afterschool care. She gets no help from college, has not claimed jsa opr any other benifit while looking after her cjildren as they dont belive they should. I think they get £53 per year ctc, although that will change soon or may stop. So they will Be about £3000 a year worse off. I can understand why she gets upset about it, she is the only one on her course that pays for her training, the others are on icomes under £20000 joint household, our colleges free training cut off amount.

How is this fair, when her our other friend,works 3 days a week, husband works 4 days both just earn under the cut off and have 2 kids so will keep the child benifits, they also have friends to help with childcare so small childcare costs.

I for one also agree with a cut off at 2 children, yes having children is a choice, and I choose to have 3, but I would be happy to have the cut off at 2 children. The average family size is 2.4 and falling, so would only affect those that either choose to have 3 or more kids, or the off workers that have 5-10kids.

I also think that ion the next couple of years there will be a fall in the amount of people earning just over this cutoff point, and even more creative accounting going on, and that annoys me, (my sis husband owns his own caravan site, they have a nice house, 2 kids in private school, YET he earns enough to get tax credits each year, the rest off income comes from things like company car BMW each, Company house, work on house like new carpets ect.)

Kimitatsu

Armada wrote: »

Sarcasm shows the lowest form of wit and the lowest form of ignorance! :T:rotfl:

:D:D but then again it made you giggle lol!

You make you make your case based on one child....how much, roughly, is coming into your household...and how much in total do you spend on feeding and clothing this child for school??.......Did your child cost the same amount pro rata aged 5.6.7.8?

You don’t think it’s going to catch on....lol :rotfl:.......It’s about to start in 2013 certain parents/carers not getting CB and what we know now is only one of the least bad announcments......wait and see!!

On a serious note (I can do that too lol) then its been an argument of mine all along that the child benefit and tax credits should be graded as the child gows. It has always seemed madness to me that we give the child double the tax credits in the first year, surestart grants etc etc, when they actually need more support as they get to secondary school and above. Once at secondary school, frequently they need access to a pc and broadband, plus the software to go on it, school uniform becomes more expensive, and they need a considerably larger pe kit than a t shirt and shorts. In many areas they need more money to do activities out of school or to participate in sports etc etc.

So no, I have two boys and they have cost far less going through school then than they do now, and because we live in a very rural area then there are few opportunities for them to interact with others without a car journey. The nearest facilities for leisure to us are a minimum of 10 miles away and buses are twice daily. I am certainly not going to post how much comes into my household on a public board but suffice to say my child benefit does not cover the clothing nor feeding costs of my children!! It does however go towards lesiure activities, school trips etc (and no it still doesnt cover the costs)

Now if I could see that the money that was going to be taken away was going to be used for the benefit of those children, better leisure facilities, free bus travel, free broadband for all students under 18 etc etc, then it would be something that I could see would benefit everyone. When I read today that banks will pay out £7.1bn in bonuses this year, then it sticks in my throat that we may yet have to bail them out again and it is the benefits of 50,000 families that will pay for it.

For the first time ever we have more people over 60 in this country than we do under 16, yet it is those children who will pay for OUR pensions, so maybe we should start looking to the future rather than a quick fix now.

pennylikespounds

Benefit's capped at £26k - equivalent to gross salary of £35k, this is out of
most people's reach so they would still be better off on benefits.

The above is absolutely nuts. How is this fair! It still means people can choose benefits as a lifestyle choice. Again the givers continue to give and the takers, take.

My husband and I are now slightly over the 44k threshold due to bot our incomes and worrying immensley as we have quadruplets (no this was not a choice) We will lose childcare tax credits next year then CB the next. Never had any help and always paid our way. In serious discussions about me just working 16 hrs and us bringing in 35k for a less stressful life, nicer lifestyle , or emmigrating.

Watching out carefully for advice like DaveWestons...Thanks

picardygirl

sh1305 wrote: »

But they don't need child benefit. Or are you really telling me that someone with an income of £60k "needs" money to clothe and feed their children? (or child)

So if somebody with an income of £60k doesnt "need" child benefit, why do the government seem convinced its fair to give a couple with an income upto £86k child benefit!

They are going to lose alot of voters if they implement this!

DavidLaGuardia

2010 wrote: »

It may have been a better move to scrap CB altogether and make people take responsibility if they want to bring children into the world.

An interesting idea to get rid of the benefit; although I would disagree with the sentiment that those with the costs of bringing up children should not be given any breaks - even the childless will be relying on the success of younger generations when they are old!

In the US, they give a tax allowance based on what children you have - a far more progressive way to tax than the current proposal here of removing thousands in child benefit for going £1 into higher rate tax, or the obvious anomaly of it not being based on joint household income.

I think the allowance in place of handouts is an idea we could well
use here. It gives a break while rewarding work and while it removes from the poorest on benefits, I contest that their claim should be based on a single payment based on household need rather than multiple layers of benefits.

As for the unfairness in the current proposal of dual earners potentially getting much more than a single earner, this is so obvious I think the current administations has taken leave of their senses! Labours 10% tax bracket was stupid (why not just raise the personal allowance by half the band value) but at least this could be dressed up to look good.

jlpike

There is going to e a big knock on of this decision.

1 People on £44-£50k will sudenly start putting much more emoney in pensions

2 People will wonder what the point is in working hard and earning more money. For example if I have 3 kids and earn £43800 I get an extra £2500 in Child benefit. If I get a £100 pay rise I am £2400 worse off. But worse than this in order to be the same I need an extra £5000 pay rise to make me the same off after 40% tax and NI.

So why should I work hard to be worse off.

I thought the Tory's where te party of the individual where if you work hard you get the benefits.

As people move from 20% to 40% sure more money is paid in tax which in fair and I have no problem with this a £1000 pay rise from £40k to $41k will get you an extra £800 aftertax and a £1000 increase from £45k to £46k will get you £600 extra but the tax man gets more.

The Big thing is you still get more for getting a pay rise and the tax man will get a bigger chunk. With this stupid decision you can get a small pay rise and be significantly worse off.

How is this going to make GB Plc prosper when working harder and earning more makes you worse off.

I will look out for rthe number of jobs advertised at £43800 as there will be thousands. It will have the same effect as stamp duty on houses where there are loads of houses under each limit and nothing until you get £20k over each limit.

If they wanted to do something like this why not have a 45% tax band set at £50K to make the money where at least there would be a point to earning more. Obviously that would affect peole without children though.

DavidLaGuardia

Kimitatsu wrote: »

On a serious note (I can do that too lol) then its been an argument of mine all along that the child benefit and tax credits should be graded as the child gows. It has always seemed madness to me that we give the child double the tax credits in the first year, surestart grants etc etc, when they actually need more support as they get to secondary school and above. Once at secondary school, frequently they need access to a pc and broadband, plus the software to go on it, school uniform becomes more expensive, and they need a considerably larger pe kit than a t shirt and shorts. In many areas they need more money to do activities out of school or to participate in sports etc etc.

Becaue child benefit is for essential living needs not extras!
A new baby inevitably requires capital expenses and goes through more nappies.

Kimitatsu

DavidLaGuardia wrote: »

Becaue child benefit is for essential living needs not extras!
A new baby inevitably requires capital expenses and goes through more nappies.

But this is my point as they get older their essential needs become greater. As babies my two needed cot, pram, basic clothing and nappies (there are grants and subsidies for reuseable nappies now too so the disposable argument isnt as great)

Go forward to primary school, they need uniform, lunch boxes or lunch money, pe kit etc.

Onto secondary school, brand new uniform, much of it more expensive because it has to have a logo, computer, relevant software, art materials, cooking materials, books, printer, memory stick, school bags, new pe kit, rugby boots, football boots, swimming gear.....the list is endless.

My point was in response to the previous poster that no at 5, 6, 7, 8 their needs were not as great as when they are 11, 12, 13 etc and so the whole concept of child benefit needs to be looked at.

All of the above are not extras they are the things the school demands that they have available to them. Whereas a new baby I agree has capital expenditure, there are many ways to be thrifty and get around some of those expenses, bit more difficult when they require new uniform.