Child Benefit Changes in 2012

gmang

Flower76 wrote: »

Earlier this year they were talking about sending out some kind of letter to every household and you had to simply tick if one person in the house earned over £44000 or whatever the limit is. Not exactly a fool-proof system is it?!

It's fool proof because if you intentionally lie then it's fraud. As with not declaring savings and claiming benefits, they will eventually find out via your tax records.

zagfles

There've been loads of threads on this here and possible ways round it. But until they announce the nitty gritty nobody can say for sure. The threshold as announced is higher rate tax threshold which is about £42500, might go up a bit in April.

flight747

What the point of having a child benefit as there is child tax credit available. It stupid to have both CB & CTC.

Dorastar

CTC is means tested whereas CB isn't - although the £44k rule will mean it is for anyone earning that amount. We will also be stung by this and I have no options to change it - gutting that I have worked hard to rise in my profession and so get penalised for being paid whereas a family with much more than us will keep their CB. Wrote to my MP who raised it at PM question time and the response was "I know it's tough" - gee thanks.

zagfles

Dorastar wrote: »

CTC is means tested whereas CB isn't - although the £44k rule will mean it is for anyone earning that amount. We will also be stung by this and I have no options to change it - gutting that I have worked hard to rise in my profession and so get penalised for being paid whereas a family with much more than us will keep their CB. Wrote to my MP who raised it at PM question time and the response was "I know it's tough" - gee thanks.

I'm becoming convinced it's a publicity stunt - they want the unfairness of this proposal constantly highlighted they want the relatively better off complaining about benefit cuts, so it's constantly highlighted that it's not just, or even mainly, the so called "poor" who are suffering with benefit cuts...

tooldle

I think it is more simple. If you have a look on the BBC website at their tax calculator, it shows that a family with one parent working earning a salary of approx 43K, gets almost as much back from the system as they pay into it. Those with two workers earning approx 60K are making a massive net contribution (approx 10 time more than the 43K family), purely because they receive so little back from the system. The figures do change a bit according to the number of kids you have. It doesn't provide an explanation of how they calculate the figure for 'take from the system'. Quite interesting, I must admit I never thought that the difference would be so large.

chickpea

But it's not just single earner v. dual incomes.

What about the scenario whereby you have two families next to each other, each with one child:

Family A has two full-time earners, one on 50k and one on 20k.

Family B has two full-time earners, both on 42k.

Despite the fact that family B has a greater income, they keep their CB benefit while their 'poor' neighbours lose theirs!

(Arguably, neither should get it, but if you're going to cut it, at least cut it based on a threshold of combined household income or something sensible!)

tooldle

Whilst I understand your point, you have to consider the demographic as well. Myself, I have no idea how many single earner families there are with a higher rate tax payer, or indeed how many double earners with a higher rate tax payer. Some of those families will have one full timer and one part timer (who may or may not pay tax), and some will have two full timers. The government will have these figures.
I think the number of children is critical as well. It seems to me that the government are trying to encourage two earner families that make a overall net contribution to the state. They do afterall need the revenue.
I have just looked out a figure for education here in Wales, which is £5595 per head. If you have a one earner family, a stay at home parent and three kids in education, its easy to see how the net overall contribution is low. Throw in health care and the picture look even worse.
This is not about fairness, its about increasing revenue to close that deficit.

tooldle

I've just run the figures that chickpea suggested above. I have given the family one child aged 11 in education.
The family earning 50K and 20K make a net tax contribution (after child benefit, education, health etc) of £12433.
The family with two salaries of 42K each, make a net tax contribution of £27221.
This I think is why they are taking away child benefit from one group and not the other.

tooldle

http://www.bbc.co.uk/news/uk-politics-13633966
Here is the link to the calculator for anyone who is interested.