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

Earl_of

Would (and could you) it be worth salary sacrificing into your pension if you earn't over £50,000 (say £55,000) and the only high earner in the house in order to continue to claim Child Benefit?

InsertWittyName

Earl_of wrote: »

Would (and could you) it be worth salary sacrificing into your pension if you earn't over £50,000 (say £55,000) and the only high earner in the house in order to continue to claim Child Benefit?

Definitely.

I would use this route if it was possible for me to do so.

mad

I'm a bit confused why they have introduced the change mid tax year. Does that mean that the CB payments in the 2012/2013 year to the 7th January are unaffected?

I will probably lose about half the CB we get as I am only earner in the household and will end up getting about 55k over this year, so you can see it matters. Up to now I have budgeted to lose half from Jan, up until then will all be spent. Please don't say it will be CB for the whole of the year........

zagfles

Icequeen99 wrote: »

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

Also of course you could be living with a friend/parent/sibling etc, which definitely wouldn't count for this, so it's very misleadling to state "any two adults who live together".

It's only "partners" in the usual DWP sense of living together as man and wife (or civil partners).

http://www.legislation.gov.uk/ukpga/2012/14/schedule/1/enacted

zagfles

mad wrote: »

I'm a bit confused why they have introduced the change mid tax year. Does that mean that the CB payments in the 2012/2013 year to the 7th January are unaffected?

I will probably lose about half the CB we get as I am only earner in the household and will end up getting about 55k over this year, so you can see it matters. Up to now I have budgeted to lose half from Jan, up until then will all be spent. Please don't say it will be CB for the whole of the year........

Yes for this tax year it's only what you get from Jan that will be clawed back.

zagfles

InsertWittyName wrote: »

Definitely.

I would use this route if it was possible for me to do so.

It doesn't have to be salary sacrifice, you can contribute to a personal pension (eg a SIPP) to reduce your income for the purposes of this. Only disadvantage of this over a salary sacrifice is you miss out on the 2% NI saving (and it's a bit more bureaucratic).

InsertWittyName

zagfles wrote: »

It doesn't have to be salary sacrifice, you can contribute to a personal pension (eg a SIPP) to reduce your income for the purposes of this. Only disadvantage of this over a salary sacrifice is you miss out on the 2% NI saving (and it's a bit more bureaucratic).

Thanks for the clarification on this.

I was already aware of this and (unfortunately) the reason I can't sacrifice my wage away is that I can't afford to sacrifice away ~£12k of my wage.

My missus is a SAHM that looks after our two children. I have two jobs.

Through the higher rate tax and now this it's a sorry state of affairs that the government are penalising those who earn a decent wage.

I don't mind losing Child Benefit in all honesty - what I mind is the rules around the single person earning £60k not getting it vs. a couple earning £100k getting it all.

julie2710

I find this whole thing really frustrating! I am wondering if they will include company car P11D value as income too? I'm assuming they will as for Child Tax Benefit purposes they do.

This will mean that as a single parent of two small boys who gets no maintenance and no working tax credits or child tax credits but has a mortgage, bills and childcare costs to maintain on my own, my company car, hardly a luxury as I do in excess of 30K miles per year for business will mean I no longer get Child Benefit either!

There really isn't much more this government could do to discourage single parents from returning to work short of setting them a seperate much lower minimum wage as we clearly are all evil and should go to hell for producing kids with fathers we believed would stick around when clearly they didnt :mad:

zagfles

julie2710 wrote: »

I find this whole thing really frustrating! I am wondering if they will include company car P11D value as income too? I'm assuming they will as for Child Tax Benefit purposes they do.

Yes, all taxable benefits will be counted.

This will mean that as a single parent of two small boys who gets no maintenance and no working tax credits or child tax credits but has a mortgage, bills and childcare costs to maintain on my own, my company car, hardly a luxury as I do in excess of 30K miles per year for business will mean I no longer get Child Benefit either!

There really isn't much more this government could do to discourage single parents from returning to work short of setting them a seperate much lower minimum wage as we clearly are all evil and should go to hell for producing kids with fathers we believed would stick around when clearly they didnt :mad:

Yes. Single parents who work and earn a decent wage get screwed already, this will make it even worse.

A single parent who doesn't work and gets a reasonable amount in child maintenance could be better off than one who works and earns £60k !!

[Deleted User]

at last some of the "better off" will also "all be in this together",should knock another few points off the tories poll ratings !