MSE News: Are you a child benefit loser? Full Q&A

Former_MSE_Helen

"Over a million families will soon be told they could lose their child benefit entitlement next year, or have it reduced ..."

Read the full story:

Are you a child benefit loser? Full Q&A

dazza.mk

Surprised you haven't included the 'grey area' re: a Non-Working parent who chooses to give up Child Benefit losing NI Credits towards their pension in the article?

Icequeen99

MSE, you might want to check the legislation on this point:

Q. What counts as 'living together' to determine income?

HMRC includes any two adults who live together, whether they are married or not.

The legislation doesn't say you have to live together. You could be married, but maintaining two separate households but you will have to pay the charge. Similarly, you could live in the same household, be married but separated in circumstances likely to be permanent and you wouldn't have to pay the charge.

IQ

Gaspode

It makes sense that if a family earns over a set amount, then the child benefit could be considered a luxury and should therefore not be paid. What I have a problem with is the idea that two co-habiting people could have a combined income of over £100K and still get child benefit whereas a family with only one working adult could have their payment stopped if the working parent earns over £60K.....
This is laziness on the part of the tax authority - the same authority that is quite capable of considering combined income when it comes to child tax credits, yet say that it's too complicated to apply the same rules for child benefit (or any other form of joint tax liability)
It's strange that politicians talk the talk about encouraging marriage and family life and yet are so ready to penalise those that try to put their kids first by means of one parent giving up work and being 'kept' by the other.....

JimmyTheWig

I don't understand how and why this is being introduced mid tax-year. Doesn't affect us yet, but probably will soon.

Does anyone know if there are plans to uplift the £50k and £60k along with inflation or will they keep them at that level meaning that in years to come the benefit will be received in full by fewer and fewer people?

beefturnmail

So my wife claims child benefit. Nothing to do with me whatsoever. What happens if my wife tells me she is going to stop claiming child benefit, but doesn't. I wouldn't know she was still receiving it as it goes in to her personal bank account to which I have no access. In good faith I tick the box on the SA return to say no child beneifit received.... This has more holes than Swiss cheese.

worldofnic

It's making me think twice about having a second job. As the marginal tax rate is now 40% + 17.52% + 1% = 58.52% for people with two children, it's reducing the cost/benefit on working into an early grave vs. being with said children.

Of course, I'd then be losing the whole shooting match from the second job ... which is hard in these times.

What to do.

InsertWittyName

worldofnic wrote: »

It's making me think twice about having a second job. As the marginal tax rate is now 40% + 17.52% + 1% = 58.52% for people with two children, it's reducing the cost/benefit on working into an early grave vs. being with said children.

Of course, I'd then be losing the whole shooting match from the second job ... which is hard in these times.

What to do.

That 1% is actually 2% for NI, which means the effective rate of taxation between £50k-£60k is almost 60% with two children!

Agree with other posters, it's wrong that it's based on a single person and not household income.

rebs

dazza.mk wrote: »

Surprised you haven't included the 'grey area' re: a Non-Working parent who chooses to give up Child Benefit losing NI Credits towards their pension in the article?

That is mentioned in the answer to one of the questions - "For each week you are entitled to the cash, you could qualify for National Insurance credits which can help protect your future entitlement to the state pension."

My question is how do I stop child benefit if I decide that is best for my family?

What is the process? what about timing? I don't want to stop too early and miss out on the last payments, but would prefer to avoid the hassle of paying any back via tax.

Icequeen99

rebs wrote: »

That is mentioned in the answer to one of the questions - "For each week you are entitled to the cash, you could qualify for National Insurance credits which can help protect your future entitlement to the state pension."

My question is how do I stop child benefit if I decide that is best for my family?

What is the process? what about timing? I don't want to stop too early and miss out on the last payments, but would prefer to avoid the hassle of paying any back via tax.

To protect national insurance, you simple claim child benefit but opt not to receive payments.

There is a two year revocation period, so say you decide to stop payments because you think your income is £60,000, but it turns out to be only £48,000 because you lose the job you can revoke your election to stop payments and get all of the child benefit paid to you.

IQ

rebs

Icequeen99 wrote: »

To protect national insurance, you simple claim child benefit but opt not to receive payments.

There is a two year revocation period, so say you decide to stop payments because you think your income is £60,000, but it turns out to be only £48,000 because you lose the job you can revoke your election to stop payments and get all of the child benefit paid to you.

IQ

Thanks for that - sorry, I should have separated my points. I was answering a previous poster on the NI credits issue.

Interesting about the 2 year revocation period - that's good to know.

I'm still not clear how I go about stopping CB payments, or when would be the optimum time to do that...