MSE News: Chancellor: child benefit cut will go ahead

tooldle

Whilst I understand that people feel agreived by the proposal, I am convinced that many families are under the false impression that they are making a net contribution to the system, when the reality is that they are taking far more from the governent than they put in. The example of a family with a stay at home parent, one earner just over the higher rate tax threshold and three school age kids, is a case in point. The education of those kids will be costing in excess of £15K per annum, and that is before you have added on child benefit and any other tax funded services the family may receive. The reality is that there are very few tax payers, making a net contribution to the system. It is those few, who are subsidising all of the other recipients of government funded benefits and services.
My family has two wage earners and one child. To me this problem is not just about the household income, the number of children should also be considered.
Either get rid of child benefit completely or, pay it to all children until they reach a defined age (5, 7 11 etc whatever suits), or pay it for a fixed number of children, be that the first one, or the first two, or perhaps just the second child (again whatever suits).

zagfles

JimmyTheWig wrote: »

Had another thought on this yesterday.

Got my tax code notification through the post. Apparently I've underpaid by a few hundred pounds in the last few years. (Not quite sure how, but their figures seem correct.) They've adjusted my tax code so I pay back what's owed. Fine.
But this will make me more likely to be paying higher rate tax. Does this mean someone could lose their child benefit because they've underpaid tax in previous years?
If that's the case then that's crazy!

No. The tax code is fiddled to collect the underpaid tax, which could mean you get pushed intp 40% via PAYE, but when they assess you at the end of the year they'll work it out properly, so you won't be in higher rate just because of underpaid tax from previous years.

tyllwyd

With all the talk about people on the threshold finding ways to avoid becoming higher rate taxpayers by extra pension contributions, refusing pay rises etc, are there any government figures to estimate how much tax revenue might potentially be lost?

kitkatt1982

This is completely wrong. They should either pay child benefit to everyone, or scrap it altogether. The majority of people don't just wake up one morning earning 40k, they work bloody hard to get it. Yet they are penalised yet again, you're ok you're well off so we'll take your tax and give it to other families who earn less than you and make you pay through the teeth for your kids to go into childcare so you can keep topping up the tax pot, and make you pay back collossal student debts you needed to take out to get your job in the first place? Another example of why you're better off having loads of kids, not working and living off the taxpayer. Sorry for the cynisism. Surprising from a conservative government

Gannonman

I have a major issue with the cut off. I earn £46k a year my wife earns £42k to be perfectly honest in these times everyone has to give a little and we can survive ok without the £180/month we get for our 3 kids. so while i'll be sorry to see it go i can understand why it is needed.

We also have friends who have incomes of £40k and £42k who will continue to receive their £180 for their 3 kids which doesn't seem fair when compared to our scenario but i suppose there has to be cut off somewhere.

Where i really have the issue is a 3rd friend who earns £48k a year has 3 kids his wife doesn;t work and he will lose their £180/month.

So three families:

Household 1 income £88k lose benefit
Household 2 income £82k keep benefit
Household 3 income £48k lose benefit

Fair?

Jennifer_Jane

eeeeeee wrote: »

my familly is one of those in the middle ; i earnt 43755 last year : i hard and for work long hours too provide for my family like wise may others in this group ; due too the extra few quid i earn the chancellor thinks i should be an extra £2500 a year worse off just due too the fact that my wife stays at home ; yet a couple who earns double can keep their money :
the chancellor needs too GET A GRIP of this ... and quickly
ive already worked it out that i could leave my wife move out of our house in with my mate and financially we would all be better off ( less nagging less bills more money ) \Our familly is not well off in this tax bracket at all :mad:

Doesn't this mean that the taxpayer (eg a basic rate taxpayer like myself) is paying for your wife not to work? Presumably if your wife moved out (and I can see many advantages for her in this...), , and started working, and your WORKING mate moved in, then the Country would be benefitting from his tax.

PS - and it's irrelevant how hard YOU work - very many poorly paid people work exceptionally hard in jobs which are totally necessary to the smooth running of the Country. I'm tired of this hackneyed phrase 'hard-working taxpayers'. We've mostly worked hard for our money, and in stressful jobs, even if we were on low salaries.

tyllwyd

Jennifer_Jane wrote: »

Doesn't this mean that the taxpayer (eg a basic rate taxpayer like myself) is paying for your wife not to work? Presumably if your wife moved out (and I can see many advantages for her in this...), , and started working, and your WORKING mate moved in, then the Country would be benefitting from his tax. ...

I don't understand - why do you say that the tax payer is paying for the poster's wife not to work? He is earning and paying tax and supporting his family - I don't suppose he gets any benefits beyond child benefit. If he & his wife feel that their family life works best with him working and her running the home, then that's a perfectly valid choice, arguably the best thing for the children, so why should they be penalised for that decision? Overall, a family with one earner paying higher rate tax rather than two earning the same gross amount in total pays more tax not less.

Or have I misunderstood, and you are saying that the tax payer would pay more to support his wife if they split up and she moved out - yes, I agree, but surely all the more reason to support them as a couple rather than penalising them.

Jennifer_Jane

tyllwyd wrote: »

I don't understand - why do you say that the tax payer is paying for the poster's wife not to work? He is earning and paying tax and supporting his family - I don't suppose he gets any benefits beyond child benefit. If he & his wife feel that their family life works best with him working and her running the home, then that's a perfectly valid choice, arguably the best thing for the children, so why should they be penalised for that decision? Overall, a family with one earner paying higher rate tax rather than two earning the same gross amount in total pays more tax not less.

Or have I misunderstood, and you are saying that the tax payer would pay more to support his wife if they split up and she moved out - yes, I agree, but surely all the more reason to support them as a couple rather than penalising them.

No, I'm wondering why the taxpayer should be sponsoring a human being (ie his wife) who presumably can work, to stay home. I'm not arguing whether or not it's better for the children, who can say - but it's certainly better for a cash-strapped country to have everyone working who is able to.

I'm surprised you don't seem to agree.

The poster's point was that he would be better off getting rid of the non-working wife and bringing his mate to share with him (I do realise this is tongue-in-cheek, but that is what he said).

Why should you - or I - pay for someone not to work?

Also is the poster earning the £43,000 after tax? If so, he's on a pretty good salary and seems to be very churlish about the fact he will be losing this benefit. If he's getting £43,000 before tax, then he will be below £40,000 net and this won't affect him.

As some others have said, he can increase his pension contributions to bring him down to the level where he retains the £40,000 level, absolutely nothing wrong in that. He will pay plenty of tax on the future pension income.

zagfles

Jennifer_Jane wrote: »

Doesn't this mean that the taxpayer (eg a basic rate taxpayer like myself) is paying for your wife not to work? Presumably if your wife moved out (and I can see many advantages for her in this...), , and started working, and your WORKING mate moved in, then the Country would be benefitting from his tax.

Why would his wife start working if he moved out? If she remained not working she'd get child benefit in full, plus child tax credit in full (about 3100 for the first child and 2600 for every other child), plus council tax benefit, plus maybe housing benefit/SMI.

Then the taxpayer would really be "paying his wife not to work"

zagfles

Jennifer_Jane wrote: »

Also is the poster earning the £43,000 after tax? If so, he's on a pretty good salary and seems to be very churlish about the fact he will be losing this benefit. If he's getting £43,000 before tax, then he will be below £40,000 net and this won't affect him.

As some others have said, he can increase his pension contributions to bring him down to the level where he retains the £40,000 level, absolutely nothing wrong in that. He will pay plenty of tax on the future pension income.

What are you on about? Where do you get the "£40,000 net" rubbish from? Someone on over £42475 gross taxable pay will be affected by this, as they will pay higher rate tax.