MSE News: Chancellor: child benefit cut will go ahead

leereni

I'm also interested to know how they will find out how somebody is or isn't over the limit. Will it be done through hmrc. So basically this next financial year I need to make sure I do little overtime.

zagfles

Naughty_Noonoo wrote: »

I will bust the threshold by £1000 in 2012/13 and without action I will lose £1750 of Child Benefit.
Therefore my plan is to pay the £1000 into a pension, this in effect means that I am £600 worse off rather than £1750.
Of course, that £600 can no longer be spent in shops so they will lose out (great news for the economy)!
Also, the treasury will be a minimum of £400 out of pocket (great news for the deficit)!
Not to mention the fact that the administration costs of this policy will by far outweigh the amount actually saved, I am trying to work out exactly what Osborne hopes to achieve.

They are trying to prove "we're all in this together" by spreading the cuts across income deciles as evenly as possible so the IFS's graphs look good.

They've ignored the dispropotionate effect it'll have on mid-high income people with children compared to mid-high income people without children.

Now here is an idea.......Osborne said he wants to save money by reducing the amount paid in Child Benefit, his party also pledged prior to election that Child Benefit would remain universal. How about they limit Child Benefit to 1 or 2 children per family. This approach would cost nothing to administer, be fair for all and more importantly save loads of money.

They're not trying to reduce the amount paid in child benefit in particular. They're trying to reduce the amount paid in benefits in the mid-high decile groups.

zagfles

omcornwall wrote: »

I'm also interested to know how they will find out how somebody is or isn't over the limit. Will it be done through hmrc. So basically this next financial year I need to make sure I do little overtime.

PAYE records, tax returns. That's the easy bit. The hard bit will be to determine if the higher rate taxpayer has a partner who claims child benefit. And what to do about partners splitting up/new partners etc.

Changes to tax credits in April will remove a lot of higher earners from the tax credits system, so all the complexity of joint assessment and the bureaucracy involved will be reduced from that system, but they're now reintroducing it to the child benefit system!

leereni

Ok so when they look at tax returns will they be looking at a p45 or p60. Reason I ask is because some months I'll do overtime and earn enough to take me well into the 40% tax group and then other months I'll do no overtime and fall well short.

Thanks

leereni

But also agree with your last comments regarding proving eligibility for the benefit. It's definitely open to abuse if it will be up to people to submit forms etc

zagfles

omcornwall wrote: »

Ok so when they look at tax returns will they be looking at a p45 or p60. Reason I ask is because some months I'll do overtime and earn enough to take me well into the 40% tax group and then other months I'll do no overtime and fall well short.

Thanks

It'll probably be your income over the whole year - you're then faced with the problem that you might not know whether you'll pay 40% tax till the end of the year. They might do it based on previous year, or a complicated combination like in tax credits.

But it's all guesswork at the moment, they said they'd announce the details in the next few months. Although it sounds simple to remove child ben from higher rate taxpayers, it isn't. It will be very complicated. And people will finds way round it.

FBaby

Since this is on the child support thread.... at the moment I have made an arrangement with my ex over child support. It is undoubtedly less than what he would be paying through the csa. That's on the basis that I earn a decent salary and I rather agree something that he will pay than having to go via csa, hence raising resentment, which in turn will bring on stress that will inevitably affect our children. I have had trouble to get him to pay anything in the past, and even now, he doesn't pay every month or when he does, it isn't always for the full amount. His contribution doesn't constitute even 20% of what the children cost every day taking together, but with CB and what I accept to contribute in excess, it seems quite fair.

However, as it stands, I will be losing this, whilst he wont. He's just had child with his partner who already has two so are getting a fair amount of CB. Why should I be the one compensating what I will lose whilst he will see no change at all... this is making me think that I will probably end up asking him to contribute more...which most likely will lead to argument, issues, and very likely with me having no choice but to go to the csa after all....

leereni

Yes it's going to be difficult unless they do it based on a previous years income. As I've worked almost all my adult life I don't know anything about tax credits.

Doesn't it say a lot about the benefits system when a councillor from tower hamlets has just been found guilty for the second time of benefits fraud.

zagfles

omcornwall wrote: »

Yes it's going to be difficult unless they do it based on a previous years income. As I've worked almost all my adult life I don't know anything about tax credits.

Doesn't it say a lot about the benefits system when a councillor from tower hamlets has just been found guilty for the second time of benefits fraud.

You don't need to be out of work, or even on a low income to get tax credits. Anyone with a child on under £41,000 can get some, and last year it was £58,000!

Even next year there will some circumstances where people paying 40% tax will be eligible for tax credits, so you'll get the ridiculous situation where they get tax credits but not child benefit!

Dorastar

I think we are mostly agreed on here that whatever it turns out to be it is going to be a pretty mental system - particularly near the cut off point where I am. If I do manage to get any I'm going to have to try to keep it stashed somewhere just in case they end up asking for it back.

I did write to my MP when it was first announced and pointed out that some public sector salary schemes were weighted to 40k for upper management - police inspectors, deputy and headteachers etc so there would be a big bunch of us losing our CB for actively seeking career progression and working hard. Their reply was "yes we realise the system will not be fair but we are going to do it anyway for the good of the country" - Gee thanks