MSE News: Higher rate tax payers to lose child benefit

jlpike

I have figured it out.

I am £1200 (approx £600 after tax and NI) into 40% and have 2 kids so get £1700 CB tax free.

I will therfore be £1700 after tax down or around £3400 before tax (i.e salary) down.

So I am going to put £1200 extra into my company pension to reduce my taxable income below the 40% bracket and if im lucky enough to get any pay rises over the next 10 years they will also go into my pension because if I dont I will be worse off.

Therfore I would then have a livable pension as I have been putting in the minumum so far and would be very poor in retirement.

What is more likely is that in 20 years time the government will change the state pension rules and means test them to get them out of the pension crises that is coming up.

So anyone with a private pension will not get a state pension and this money will go to everyone who has refused to think about retirement and pi***d it up a wall. Great !!!!!!!!!!!!! We may as well live in a comunist state as there is absolutely no point in worling hard and trying to do well for yourself.:mad::mad::mad:

I can only think that by doing this which will be a big issue for some people (admitidly who can best afford it) there is some really bad news coming for people who can not afford it. The 85% of people who this does not effect are in for a shock when further announcements come out in the next 2 weeks.

deedee1968

The Govt has really not though this one through.

The inequality of it will hit single parent families and SAHP families hard. How is it fair that a family earning over 80K get and one on 45k don't?
Personally I am a SAHP with a HRT paying partner so we will lose it. It doesn't pay for coffee at starbucks like some people think. It enable us to balance our account at the end of the month. At least we have notice so I will able to find work. But how is that going to help the country. Lots of SAHP having to find jobs to maintain their standard of living. How on earth do they propose people on benefits will be able to find work?
I also wonder what effect it will have on home responsiblity protection.
Perhaps the worst thing of all is that the saving will be swallowed up in the changes they plan to make to universal credit.
Totally crazy.

El72

So does anyone know what will happen to the NI contributions which are paid to the parent receiving CB if they are not working. So enabling them to draw a state pension in later life.

This is there as a recognition of the sacrifice of earnings some parents make due to giving up work to raise children.

Potentially this is more damaging than the loss of money now.

Anyone any ideas?

SurfBowlSC

Naughty_Noonoo wrote: »

I have read a lot of different arguments on this matter. It seems to me that certain people simply think that earning 45k is like being a millionnaire, that is far from the truth.
Now if benefits are to be removed from the so called wealthy like me on 45k then I would like benefits to be non cash and only to be used against food and clothes. Other benefits relating to rent, council tax and fuel can be paid direct to the relevent authorities. All too often I see people stood outside a Supermarket with a trolley full of booze and junk food, puffing away on cigs and scratching lottery tickets, talking on a mobile phone and their children are dressed in rags. These people do not work but manage to have subscription TV channels and hi-spec electrical equipment. They can afford to go to the pub and bingo but are often too ill to work. If this element of society were dealt with properly then people like me would accept decisions like the Child Benefit cuts. At present my child Benefit goes towards the cost of food and clothes for my children and nothing else.

Couldn't agree more!!!

Make these claimants PROVE their outgoings with receipts etc.
It will stop the benefit cheats who get their mortgage/rent paid by their ex partners, but still claim it from the government.

Wandering through town at lunchtime yesterday and there were two evidently work shy characters, scruffily dressed, puffing on cigarettes eying up a PS3. Wonder how that's being paid for...... (though it could be drug deals I suppose).

Naughty_Noonoo

The government claimed the reason behind their decision to stop CB for high rate tax payers was due to the associated costs in doing by means testing for example. If they were serious about saving money on this benefit then surely the simplest and fairest way would be to cap the benefit to 2 children per family. there would be little or no costs to implement the policy, no need to cross reference other agencies such as the inland revenue and would save more than £1 billion a year.

flutterbybutterfly

El72 wrote: »

So does anyone know what will happen to the NI contributions which are paid to the parent receiving CB if they are not working. So enabling them to draw a state pension in later life.

This is there as a recognition of the sacrifice of earnings some parents make due to giving up work to raise children.

Potentially this is more damaging than the loss of money now.

Anyone any ideas?

I heard that when child benefit stops people over the threshold and therefore not entitled can continue their claim, but the amount will be taken off them through the tax system. So they're not actually preventing anyone claiming or continue to do so, but if you do and you are not entitled it will be taken off you anyway. Apparently they are hoping people not entitled will just stop claiming. Maybe under these circumstances even if you are not entitled to child benefit, just registering your claim may protect you for n.I. Credits purposes. Otherwise they would be completely shafting stay at home mums!

jlpike

I have just worked out that recent announements will (if I dont change a few things) make me 10% (£3600) worse off in my take home pay which is approx 16% (£7000) before tax. Im sure my bos is likely to give me a pay rise like that in the current conditions, my company is just about staying in business.

I would lose child benefit
I am losing Working family allowance (although this is not much and I probably should not get this)
NI is going up 1%
VATis going up 2.5%

Thankyou Mr Cameron

deedee1968

Jeff_Bridges_hair wrote: »

Whilst i appreciate that you work hard looking after your children but it was YOUR choice to be a stay at homemother. Why should the rest of us have to pay for you to stay at home?

This is the type of attitude that annoys me the most. Do you really think that you personally pay for a SAHP of a non tax payer to stay home? At the moment I get £150 a month ctc and cb. However, I worked for 18 years prior to having children and paid quite a bit of tax and NI into the pot. My husband is still doing so. It is his salary that allows me to stay home not yours. In fact in is probably his salary that forced me to stay home as the cost of childcare for two young children is more than I could have earned working. And of course because of his salary the state does not pay towards the cost of my childcare. Also because of his highly responsible job he works long hours so it is hard for me to work around his hours as they are not fixed.

ajaxgeezer

Naughty_Noonoo wrote: »

The government claimed the reason behind their decision to stop CB for high rate tax payers was due to the associated costs in doing by means testing for example. If they were serious about saving money on this benefit then surely the simplest and fairest way would be to cap the benefit to 2 children per family. there would be little or no costs to implement the policy, no need to cross reference other agencies such as the inland revenue and would save more than £1 billion a year.

... if only the Tories weren't so politically opposed to tax rises. I've no idea what would be raised compared to the £1 billion of CB cuts, but a 1p/2p basic tax rate rise couple with a sensible benefit review would surely be fairer across the board?

This government will cripple this country. No-one listened to me in May though, and I doubt things have changed now.

welshmoneylover

deedee1968 wrote: »

Jeff_Bridges_hair wrote: »

In fact in is probably his salary that forced me to stay home as the cost of childcare for two young children

Many moons ago, there was no help at all for working mothers to pay for childcare.

Didn't stop them working though...