unmarried partner and child benefit means testing

bluphoto7

May partner of ten years is expecting our second child in January, and will, as with the first, stay at home to look after the kids. She could not go out to work if she wanted to as she has a psychological disability which prevents her from doing so.

I, on the other hand, make £43,500 per year, plus an annual bonus which could be £100, or £1000, depending on the performance of the company I work for. As such, I may or may not fall into the 40% tax bracket, depending on... well... pretty much anything! Bonuses are paid in March salary, so I don't find out until the end of the tax year whether I've breached the limit or not. By 2013, it's pretty certain I'll be over £44k, but then of course, the 40% tax limit will likely have changed as well.

I am not married to my partner, though obviously we live together, and SHE is the one who claims child benefit. We just about get by on what we have, though I have to extend the house to accomodate our new child next year. As such, I'm having to find another £400+ per month to be added to the mortgage, for the extension - that's going to be a BIG struggle.

Suddenly, we hear about this child benefit thing where 40% tax payers will no longer qualify. IF this affects us, we will be hit for around £150 per month. That's a lot of money to lose when you're already struggling. Trying to find £600 per month as opposed to £400 per month makes the WORLD of difference as to whether we can go ahead with this extension or not, and we need to make a decision now, not in 2013.

From what I understand, this new policy is based on individual income, and not household income.

David Cameron said yesterday that lower earners should NOT pay for the child benefit of those higher earners. So I'm trying to get my head around how I stop paying the child benefit of families where BOTH parents earn around £40k each.

many thanks for your advice...
Guy

dreamylittledream

Sorry was this a question or a rant?

No one knows exactly how the system is going to be administered but I doubt whether you are married or not will make any difference to whether you lose CHB as a higher rate tax payer, they are likely just to ask your partner what her partners NINO is and link you as a household with a higher rate tax payer from that.

And you are quite right it's not particularly fair but I believe the logic is that implementing a full means testing system on all child benefit claims as opposed to just using existing information like higher rate tax status would cost almost as much as the savings from not paying child benefit to these couples. So they have gone for the quick and simple saving and not the fairer but less cost effective approach. At the end of the day this is all about saving money really and not what is or isn't fair.

viktory

To be honest, unless you are living in a one bed house you do not need to extend anything just yet. The new baby can sleep in your room for at least the fist six months and then share with its sibling. In these uncertain times, you should be wary of extending your finances any further - especially if you are struggling on such a good wage, plus benefits.

McKneff

Do you have lots of debt.
Do you know where all your money is going.


On your income you should be living the life of riley,
Some of the things you have taken for granted are going to have to be curtailed or cut.
Why not post a Statement of Affairs and we'll see if we can help you do a bit of costcutting.

midgetsmum

No-one knows yet what will be implemented re child benefit in 2013. All we do know so far is that if you are in any way affected, the child benefit office will contact you to let you know, they won't just cut off your benefit without warning.

RazWaz

If you are worried about being able to find extra money with that kind of income, you need to scale your lifestyle down a little. You have over 6x the wage I have and I've never had to worry about covering the bills.

karenx

Im sure alot of people would love to be on the kind of wage you have! Plus you still get some benefits!
Like has been said, you dont NEED an extension. It would be nice to have one but its not a life or death situation. And when you have money worries already this will only add to it as theres an uncertanty over whether or not you will continue to recieve child benefit in a few years.
Your baby can sleep in your room for a while, then move to your other childs room. May not be the ideal situation or what you want but you have to think yourself lucky you will have 2 children and a good salery. There are people alot worse than you!
If you are going to be struggling is there any reason why your partner cannot go back to work? A night job or weekends where no childcare is needed?