MSE News: Budget 2012: what the child benefit overhaul means for you

beaker141

Its a right farce, I wrote to my MP some time ago about it and he requested an answer from some minister - it was exactly the bullsh*t you'd expect, talking about everyone has to do their bit and fairness this and that. I'd accept it all with grace if it wasnt for this 2 earner anomoly.

From a father of 4 kids and a stay at home mother.

thelawnet

sly_dog_jonah wrote: »

I make it 73.47% for a 4 child family: 40% tax, 2% NI, 10.56% lost CB for first child, 6.97% lost for each additional child. Oh and an extra 9% if you're still paying back student loans.

It's 73.46%.

Here's a spreadsheet showing the effect of the budget changes for any given number of children and income

http://www.!!!!!!/document/sifGsxE0/Tax_changes.html

Guardian's Allowance is only paid for about 2000 children each year

This woman I think does not earn over £50k/year: http://www.express.co.uk/posts/view/295326/Mum-adopts-friend-s-five-children-after-she-dies-Mum-adopts-friend-s-five-children-after-she-dies-Mum-adopts-friend-s-five-children-after-she-dies-Mum-adopts-friend-s-five-children-after-she-dies but if she did, her nominal tax rate between £50k and £60k would be 132.71%.

There must be people in the same situation.

More regularly, 2 children, none guardianships, is a nominal tax rate of 59.52%, 3 is 66.49%, and 5 80.43%.

sly_dog_jonah

thelawnet wrote: »

It's 73.46%.

I stand corrected. I'd used the annual (rounded) figures on the MSE article, rather than 52 * the weekly rate.

JimmyTheWig

3under3 wrote: »

I understood that it would take in to account all of your income for 2012/13, but only the child benefit received between 07/01/12 and the end of the 2012/12 tax year. So if you earned 51k you would lose 10% of the child benefit received between 07/01/12 and the end of the 2012/12 tax year. Is that right?

This is the only way it makes sense to me.
But starting mid-tax year doesn't make any real sense to me, so who knows?

FBaby

Bokc wrote: »

If a father earns £65K (net, self employed) per year but pays his ex wife £30K in maintenance, does that mean his new partner is in effect (due to the income tax clawback if child benefit over £60k) barred from receiving child benefit? Despite the fact that the "second family" income contribution from the father is in fact £35K? Does it make any difference whether or not they are married? Will the ex-wife be penalised as well as the current partner?

I don't think it would be ok to deduct child maintenance to consider salary for the purpose of child benefit assessment. After all, it is nothing different to the new family than a bill that needs to be paid, like many others.

I personally think it would be fairer that entitlement to child benefit for each child should be dependent on the salary of both parents rather than household. After all, it is CHILD benefit, not household benefit.

If a nrp earns over £50K (declared), he will be liable to pay a hefty maintenance payment. It is therefore the pwc of that child for whom maintenance is paid to who should no longer receive child benefit (in addition to maintenance payment). The nrpp should continue to receive child benefit for her children from a previous relationship (if her ex doesn't earn over £50K), but not for the child(ren) of the nrp.

But of course, they would claim this is unenforceable (although not sure the suggested method is either, most likely going to rely on people signing a form declaring that their partner is in receipt of child benefit...)

bromleymum

Men around here are already calling it the "girlfriend tax".

So I have a childless, male friend and he earns just over 60k and is "in a relationship" with a lovely lady who also happens to be a mum of three. She already receives generous maintenance and has a good relationship with the father of her kids.

They are going to live together and as a little reward to my friend, he will now have to pay £2500 extra tax. Thats the equivalent of receiving a 5k pay cut.

THIS IS BONKERS!!!!!

Where's his incentive to inform the tax office of the change of address? How are the tax office ever going to know who's living with who. When did you move in? Or when did you move out?

JimmyTheWig

bromleymum wrote: »

Where's his incentive to inform the tax office of the change of address? How are the tax office ever going to know who's living with who. When did you move in? Or when did you move out?

The fact that it would be fraudulent not to?

beefturnmail

I still don't get how this will stop this situation:

Husband earns over £50k. Wife earns under £50k and claims child benefit, but does not tell the husband this

What question are they going to ask the husband on his tax return?

1) Do you claim child benefit? Answer: No
2) Does your partner claim child benefit? Answer: Not that I'm aware of.

JimmyTheWig

beefturnmail wrote: »

I still don't get how this will stop this situation:

Husband earns over £50k. Wife earns under £50k and claims child benefit, but does not tell the husband this

What question are they going to ask the husband on his tax return?

1) Do you claim child benefit? Answer: No
2) Does your partner claim child benefit? Answer: Not that I'm aware of.

What's to stop (under the current rules) the husband claiming child benefit himself?

Someone mentioned earlier (may have been a different thread) that the child benefit application asks about your partner. So the situation would be covered.

50Twuncle

All this talk about £50k + - sorry but you chose to have children, nobody forced you - if you can't afford to survive on £50k or even £100k - there is something seriously wrong with you.....
I think that they should have stopped ALL child benefits if the joint income exceeds £25k.