MSE News: Higher rate tax payers to lose child benefit

gauly

ellie43 wrote: »

We have been repeatedly told that we will all have to pay, but the loss of £2,000 per annum has a much greater impact on a family earning £20k, than it does on a family earning 50k.

Not necessarily! I've been doing a bit of maths based pretty closely on our family circumstances. I think I must have made some mistake. Can anyone tell me if I if I have gone wrong?? This is for a family with four children, with 6% pension payments and with just the husband working (in central London).

INCOME OF £44k WORKING IN LONDON

---

Net of pension/tax/NI £30,183
Season ticket to London -£4,028

Benefits £0

Total income £26,155

INCOME OF £19k WORKING LOCALLY

---

Net of pension/tax/NI £14,122

Child tax credits £9,112
Council tax benefit £53
Child benefit £3,154

Total income £26,441

I got the benefit levels from the entitledto.co.uk website. I was looking into this because it's looking pretty certain that my husband is going to lose his job next year but I think earning a low salary locally should not be difficult. I'm rather shocked to see that after the latest government plan we could actually be better off!!

Obviously the big drawback is the pension payments are smaller which is bad, but then it's not clear that a stay-at-home mother is going to get automatic pension qualifying years if she doesn't get child benefit, so even that might be better.

Fran

Badger_Lady wrote: »

Breeding cats (brilliant with younger children to learn about the lifecycle of a mammal, but you do have to cope with noisy cats in heat!)

Oh no! Please don't encourage people to breed anything when there are so many unwanted and abandoned creatures! Interesting suggestions otherwise!

JimmyTheWig

bunny999 wrote: »

The only FAIR thing would be to abolish child benefit. It's crazy to encourage people to breed when the world is over populated and their are millions of unemployed.

Firstly, child benefit doesn't encourage people to breed. It helps out in looking after the children that people have.
Secondly, more relevantly, over-population doesn't cause unemployment. If the population dropped by a million then the unemployment figures wouldn't drop by a million because the million people who we had lost would previously created demand for products that would take just under a million people to produce.

JimmyTheWig

WestonDave wrote: »

Obviously the detail is still to be sorted however the way it has been said to work is that everyone will still get CB, but those who pay higher rate tax will have it clawed back in extra tax when they submit their tax return.

So someone earning £1 below the 40% threshold will get full child benefit.
But I can't decide if this suggests that someone earning £1 over the 40% threshold will get zero child benefit or have £1 deducted from their benefit. If it is zero then this is crazy.

PipsoG

Isn't it time that Child Benefit should be Means Tested? It does seem very unfair if those on high income get paid when they don't really have such a need as those on a low income.

Following the announcement where single earners of £44,000 won't get Child Benefit but with both parents who earn below the High Tax Rate [which gives them a total income of £70,000 plus] will get it!

How can that be fair - with the debt that is owed by the country this seems stupid!

WestonDave

Jimmy - as I understand it, its all or nothing so if you earn £1 over the threshold you are better off giving that £1 to charity than losing over £1000 in benefits. I suppose it might help charities hit by the reduction in gift aid rates!

Kimitatsu

gauly wrote: »

Not necessarily! I've been doing a bit of maths based pretty closely on our family circumstances. I think I must have made some mistake. Can anyone tell me if I if I have gone wrong?? This is for a family with four children, with 6% pension payments and with just the husband working (in central London).

INCOME OF £44k WORKING IN LONDON

---

Net of pension/tax/NI £30,183
Season ticket to London -£4,028

Benefits £0

Total income £26,155

INCOME OF £19k WORKING LOCALLY

---

Net of pension/tax/NI £14,122

Child tax credits £9,112
Council tax benefit £53
Child benefit £3,154

Total income £26,441

I got the benefit levels from the entitledto.co.uk website. I was looking into this because it's looking pretty certain that my husband is going to lose his job next year but I think earning a low salary locally should not be difficult. I'm rather shocked to see that after the latest government plan we could actually be better off!!

Obviously the big drawback is the pension payments are smaller which is bad, but then it's not clear that a stay-at-home mother is going to get automatic pension qualifying years if she doesn't get child benefit, so even that might be better.

No sadly you are not wrong........and that has been the rub all along! To be a higher rate tax payer in the main you have had to work hard to get to where you are, either taking extra qualifications whilst working your way up, or going to university and in some cases still paying off the fees.

For the lady who has said that you have to go to work, for some single parents, its not worth them going to work if they have 3 or more children because of the benefits they will lose. Now I know what the chancellor has said today is that no family will be worse off, but that means you either have to cut benefits to families that dont work, or increase them to those that do.

Apart from of course, if you are a higher rate tax payer.............

Kimitatsu

JimmyTheWig wrote: »

So someone earning £1 below the 40% threshold will get full child benefit.
But I can't decide if this suggests that someone earning £1 over the 40% threshold will get zero child benefit or have £1 deducted from their benefit. If it is zero then this is crazy.

Currently as I understand it if you earn £44,001 then you will have the entire child benefit clawed back through the tax system, whereas if you earn £44,000 then you can get full child benefit.

That is of course if HMRC can send you out the right tax code.......................................

EvieSaver

gauly wrote: »

Not necessarily! I've been doing a bit of maths based pretty closely on our family circumstances. I think I must have made some mistake. Can anyone tell me if I if I have gone wrong?? This is for a family with four children, with 6% pension payments and with just the husband working (in central London).

INCOME OF £44k WORKING IN LONDON

---

Net of pension/tax/NI £30,183
Season ticket to London -£4,028

Benefits £0

Total income £26,155

INCOME OF £19k WORKING LOCALLY

---

Net of pension/tax/NI £14,122

Child tax credits £9,112
Council tax benefit £53
Child benefit £3,154

Total income £26,441

I got the benefit levels from the entitledto.co.uk website. I was looking into this because it's looking pretty certain that my husband is going to lose his job next year but I think earning a low salary locally should not be difficult. I'm rather shocked to see that after the latest government plan we could actually be better off!!

Obviously the big drawback is the pension payments are smaller which is bad, but then it's not clear that a stay-at-home mother is going to get automatic pension qualifying years if she doesn't get child benefit, so even that might be better.

We had a similar experience last year whilst chatting to my brother. Although he is considered to be on a low wage he actually ended up with more money coming in each month than us! (my husband is just over the higher tax limit) because of the amount he received in benefits. Also, they could get discounts for Open University degrees which when I looked into it would cost us about £5k. They also could get help with child care costs if his wife went to work, whereas if I got back to work we foot the bill ourselves.

I'm not saying here that I expect to receive these benefits but I do wonder what is the point of going to Uni and working hard if your salary is just made up to the same level anyway?

Although we will loose the CB and I am ok about that I am annoyed about the unfairness of how it will be done.

I have always found it strange that people pay tax and receive benefits at the same time ....

andys15

Once again I am discriminated against for being a high earner. I pay £1526 every month to the system and I get nothing in return. I cannot even get an NHS dentist. I pay for all my prescriptions, I have never claimed any support. Now they are taking away my child benefit, just because I earn to much. I wouldn't mind if it would go to support the real needy, but it wont, it will go to funding the underclasses, who have never worked, have 5 kids and get free everything.Talk about rewarding the failures. I still think there should be a number to ring where I can get one of these people who have no intentions of ever working, and get them to do chores for me. I pay £1526 every month let one of them come round and do my garden.