If you contribute to max pension, can you claim child benefit?

izawa

Hi,

Say if a couple earns £90,000 each . They contributes £60,000 to pension. Can he now claim full child benefit now that their adjusted income is £30,000?
The numbers are hypothetical.

Dazed_and_C0nfused

There is no income limit which prevents anyone claiming or being paid Child Benefit.

If adjusted net income of the person with the highest adjusted net income is less than £50,100 then no High Income Child Benefit Charge is payable.

izawa

So in above example, how can I calculate adjusted net income ?

Is Adjusted net income = 90,000 (gross salary) - 60,000 (pension) = £30,000 ?
So in this case, I can claim the child benefit without paying any element of it back? 

sheramber

As long as  neither parent exceeds the £50k limit.

Dazed_and_C0nfused

izawa said:

So in above example, how can I calculate adjusted net income ?

Is Adjusted net income = 90,000 (gross salary) - 60,000 (pension) = £30,000 ?
So in this case, I can claim the child benefit without paying any element of it back? 

Not normally quite as simple as that as adjusted net income includes all sources of taxable income, even if it is taxed at 0% like interest and dividends can be.

But unless either of you exceed ANI of £50,099 there will be HICBC to pay.

izawa

Dazed_and_C0nfused said:

izawa said:

So in above example, how can I calculate adjusted net income ?

Is Adjusted net income = 90,000 (gross salary) - 60,000 (pension) = £30,000 ?
So in this case, I can claim the child benefit without paying any element of it back? 

Not normally quite as simple as that as adjusted net income includes all sources of taxable income, even if it is taxed at 0% like interest and dividends can be.

But unless either of you exceed ANI of £50,099 there will be HICBC to pay.

Ok, hows this. 
Eg
90,000 gross salary for each person
5,000 in interest, rental income, dividends, door to door selling tiles, etc any other income we can think of. For each person
Total 95,000 for each person
Pay 60,000 in pension for each person
Net is 35,000 for each person

Now can child benefit be claimed?

izawa

My purpose isnt sinister. I am just trying to figure out how broken is this benefit? Those who are on high incomes can afford to put more on pensions and claim CB . Those with less income cant get both cb and pension benefit. This is just pure wrong. 

This is the case when a singe person in a couple earning 65,000 cannot claim benefits. But both couple earning 49,000 can claim cb whilst earning more in net. 

This whole nonsense of raising pension allowance to 60k is nothing but nonsense.

Dazed_and_C0nfused

izawa said:

Dazed_and_C0nfused said:

izawa said:

So in above example, how can I calculate adjusted net income ?

Is Adjusted net income = 90,000 (gross salary) - 60,000 (pension) = £30,000 ?
So in this case, I can claim the child benefit without paying any element of it back? 

Not normally quite as simple as that as adjusted net income includes all sources of taxable income, even if it is taxed at 0% like interest and dividends can be.

But unless either of you exceed ANI of £50,099 there will be HICBC to pay.

Ok, hows this. 
Eg
90,000 gross salary for each person
5,000 in interest, rental income, dividends, door to door selling tiles, etc any other income we can think of. For each person
Total 95,000 for each person
Pay 60,000 in pension for each person
Net is 35,000 for each person

Now can child benefit be claimed?

Child Benefit can always be claimed.

But in the scenario you have outlined there would be no HICBC on either person so the whole of the Child Benefit would be retained.

kaMelo

Those are two separate issues, whether they are nonsense is a matter for debate. However the purpose of this board is to help people, not to discuss policy.

izawa

kaMelo said:

Those are two separate issues, whether they are nonsense is a matter for debate. However the purpose of this board is to help people, not to discuss policy.

Yeah ofcourse. I just wanted to know whether it is possible for someone to exploit this and claim. I dont have children so this does not apply to me. I wanted to understand the rules.

sheramber

The unfairness of the policy has been reaised since it was introduced. The Government have no plans to change the rules.