Child benefit U turn being lined up

LydiaJ

Pimperne1 wrote: »

Whenever I hear this argument with respect to single parents it occurs to me that there is something missing from the formula. A one parent household earning £45k should also have income from the absent parent.

Indeed, if the absent parent is (a) known, (b) alive, and (c) either willing to cough up or possible to coerce into coughing up. These aren't always the case. It's shocking how many divorced parents I've talked to recently who get next to nothing from exes who are earning good money but manage to wriggle out of paying what they should.

I understand that the benefits bill needs to be reduced, and I see the point (and agree with it) of not paying benefits to high earners who don't need them. However, I think any changes to the current system should be designed to treat families with a SAHM (or indeed SAHD) no worse than families with the same income but both parents earning part of it each.

Whatever the new system is should also not have a cliff-edge cut-off. We've been hearing for ages about the way that the stupid design of stamp duty distorts the housing market around the cut-off points. That's bad enough, but it would be even worse to have something similar happening to the employment market around the CB cut-off. If you want to remove it from higher earners, at least taper it.

Tapering CB itself sounds like a lot of expensive and unnecessary admin, though. Removing it altogether and adding an equivalent amount onto TCs for those who qualify for them sounds like the best of the options I've heard so far.

LydiaJ

pqrdef wrote: »

Even the CSA might draw the line at extracting money out of dead people.

An interesting point that I was wondering whether to raise. This is one area of life where marriage makes a huge difference to finances. If you're a married parent and your spouse dies, you get widowed parent's allowance of £100/wk or so (or less if your spouse had gaps in their NIC record). If you were cohabiting, or divorced and getting maintenance, or in some other way financially dependent on someone you weren't married to at the time that they died, then you get nothing.

It's not much better with widow's pensions. You can allocate your death in service lump sum to a partner or ex that you're not married to, but pensions to provide ongoing income are just for spouses (or civil partners), and although the kids get some pension of their own, it's not as much. At least, this is true of public sector pensions - I'm afraid I don't have details of death in service arrangements for private pensions.

melly1980

Percy1983 wrote: »

As you say we all benefit from education so I will leave that, likewise with the NHS some will use it more than others but it is available to me so fair enough.

But having children is a choice you make, even if I have 2 children another family will get more for having 3 children.

eg, To put it in a currency which this money may get spent on, I have 2 children, next door have 3 children, all 5 children want an xbox game yet I end up paying for 3 and only get 2 while they pay for 2 and get 3, why because they decided to have more children, doesn't sound fair to me.

Instead of taking money off me to give to others children take nothing off me and let me spend it on my own children, if that means my children get a better life because I only had 2 then so be it.

so then, if you munch your way to fatness should i pay your medical bill. If you wander into the road like a fookwit and get run down through your own negligence should I pay for your hospital treatment. When your dribbling down your chin at the rip old age of 80 should my kids be working and providing for you? Your medical care, ambulance provision, security services, police, fire brigade and so on?

zagfles

chewmylegoff wrote: »

if we didn't pay so much in benefits to people who don't need or shouldn't have the money we may well be able to reduce taxation to the point where people, even the relatively low paid, could actually afford to save for their own retirement rather than the state providing retirement income by taxing current workers.

If you only give benefits to those who "need" it, then you have to define a level of income/savings above which you don't "need" it. The results in it not being worthwhile to save, because if you don't save you get the state to pick up the tab. So why bother? You may as well !!!! your money against the wall instead.

That's why the state pension isn't means tested and never will be. You'd need to save about £150k to get an annuity of about the level of the state pension, why would anyone bother saving that sort of amount if they'll lose their state pension? They'd be stupid to.

still, instead of that i'll continue paying tax at 40% so that the state can continue to pay a pension and winter fuel allowance to my parents whose wealth is approximately 40 times greater than mine.

And they've probably put in far more than they're taking out, so what's the problem? Do you think they should pay to see their GP, or pay if they need an ambulance, or pay to walk in the local park?

zagfles

chewmylegoff wrote: »

How do I dare suggest it?

Because they're multimillionaires, that's why.

So they've probably paid loads of tax then.

If we accept that the more you earn the higher the rate of tax you should pay, why does this model break down when it comes to receiving certain state benefits.

Why should they be penalised twice?

This is of course what happens to people at the lower end of the income scale, which is why the "it's not worth working" attitude is so prevalent, and people come from eastern Europe to do all the jobs the British won't.

chewmylegoff

Except the state pension is already means tested - the minimum income guarantee results in the state pension being topped up by pension credit. The result is that you have bizarre result with the downsides of means testing without the upside of the cost saving.

We run a redistributive tax system which takes money from the top 20% or so and redistributes it amongst those not so fortunate. Most people seem to accept that this is a good system, until it comes to a few traditional benefits which for some reason are sancrasanct. If I suggested that ultra rich bankers should get working family tax credit to top up their million pound bonus you'd think I was insane. So what's the difference?

Batchy

The problem is over the last few years the government has
froze then reduced the tax bands bringing more people into 40%
Raised stealthily the 40% rate to 42% (ni over higher rate threshold)
Raised the cost of employing you by 1% (ers ni)
Is introducing pension enrolment (to reduce effect of pension credit so everyone has a small pension)
Has taken from private pensions via dividends into pension changes.
At the same time given 5% increases to benefit claimants, pensions!
Allowed the high street banks to control the economy rather than the bank of England strangely
They can't keep taking from the supposed rich to give to the supposed poor, else soon reality kicks in and people will realise your better off being poor in England than working hard to earn a reasonable wage.
To be a higher rate tax payer I've endured 10 years of crap, and grafting. To now simply be as well off as someone with 6 kids and on benefits? WHY.... It's just not right!!!

zagfles

chewmylegoff wrote: »

Except the state pension is already means tested - the minimum income guarantee results in the state pension being topped up by pension credit.

The state pension is not means tested. Pension credit is, but that's not the "state pension", it's a means tested benefit.

The result is that you have bizarre result with the downsides of means testing without the upside of the cost saving.

Which is why the govt are talking about a flat state pension which would incorporate pension credit so everyone would get about £140pw or so.

We run a redistributive tax system which takes money from the top 20% or so and redistributes it amongst those not so fortunate. Most people seem to accept that this is a good system, until it comes to a few traditional benefits which for some reason are sancrasanct. If I suggested that ultra rich bankers should get working family tax credit to top up their million pound bonus you'd think I was insane. So what's the difference?

If the govt concentrated on getting "ultra rich bankers" and the like to pay the taxes they should rather than trying to take their trivial £20pw child benefit off them the govt books would be lot healthier.

ILW

zagfles wrote: »

So who do you think will be paying most of the taxes in a generation's time?

As now, the offspring of the parents who do not need to rely on benefits to raise their children.

ILW

zagfles wrote: »

The state pension is not means tested. Pension credit is, but that's not the "state pension", it's a means tested benefit.


Which is why the govt are talking about a flat state pension which would incorporate pension credit so everyone would get about £140pw or so.


If the govt concentrated on getting "ultra rich bankers" and the like to pay the taxes they should rather than trying to take their trivial £20pw child benefit off them the govt books would be lot healthier.

Nice idea in theory, does not work like that in the real world. Big money is very mobile.