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Money Moral Dilemma: Should my husband pay back the Child Benefit we're losing due to his pay rise?

MSE_Sarah
MSE_Sarah Posts: 327 MSE Staff
Ninth Anniversary 10 Posts Photogenic I've been Money Tipped!
edited 12 July 2023 am31 11:50AM in Marriage, relationships & families
This week's MoneySaver who wants advice asks...

My husband and I have separate bank accounts and each month pay a fixed amount into a joint account to cover bills. My husband recently got a pay rise, and now his income means we have to repay some of the Child Benefit we received. I think my husband should pay it back, as he's had the pay rise and hasn't increased the amount he puts into our joint account each month, but he thinks it should be paid from our joint account, as it's a 'family bill'. Who's right? 

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Comments

  • kaMelo
    kaMelo Posts: 2,740 Forumite
    Fifth Anniversary 1,000 Posts Name Dropper
    edited 11 July 2023 pm31 5:55PM
    My own opinion is that as a family with child(ren) then there is no mine and your money, it's all family money, it doesn't matter who put the money in there.

    However there are a million different ways to run a families finances and all that matters is both of you are on the same wavelength and that requires discussion.
    If they aren't it will cause problems and resentment, like the tone of this dilemna. 


    PS, this thread is more about budgeting than benefits so would think budgeting and bank accounts is a more appropriate board for it.
  • For future years it might be worth your husband increasing his pension contributions through his employer to bring his taxable pay just under the child benefit threshold.

    That way you get the best of both worlds - he gets a bigger pension and your family receives full child benefit payments.
  • bikaga
    bikaga Posts: 179 Forumite
    Part of the Furniture 100 Posts Name Dropper
    I'm a strong believer in having separate accounts, especially as a woman (I've seen too many cases where women were completely scr**ed over by their exes during or following a separation, so would never let anyone have complete control over my finances).

    But I also feel that issues like this should not be a competition about who's right, but a discussion of what the consequences would be.

    Is the child benefit going into that account? If so, yeah, it should be paid back from that account - but it might make sense to think about whether his contribution should be adjusted seeing as he's now earning more.

    Is it going elsewhere, like child(ren)'s savings accounts? Then you'll need to find a way to deal with it fairly. Legally, the person with the higher income is responsible for paying the charge, but it seems weird to me to make him pay the entire charge if the benefit doesn't go to him and isn't passed on towards bills or savings for the kid(s).
  • lixi
    lixi Posts: 101 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    If he views money like that I'd suggest you keep claiming it and put it into your single account.

    Actually it's an extra tax liability for him not you. He should be paying more for household expenses not equal if he is a higher earner.
  • lixi
    lixi Posts: 101 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    For future years it might be worth your husband increasing his pension contributions through his employer to bring his taxable pay just under the child benefit threshold.

    That way you get the best of both worlds - he gets a bigger pension and your family receives full child benefit payments.
    Pensions are marital assets. So by all means he should increase his contributions. Because they'll need to be at least equalised when they split (and quite frankly that's looming with an attitude like his).
  • daivid
    daivid Posts: 1,282 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    There are many good reasons for keeping separate accounts. Regarding the child benefit being repaid what was that money to be used for? And how will the deficit be made up/who will miss out? Sounds like for the OP the key issue is what constitutes yours and his fair shares of contribution to the family pot? 50:50? ratio of earnings? some more complicated formula? From the sounds of it that may not be an easy issue to resolve.
  • The repayment of child benefit is a tax liability on the higher paid parent. From what you've said that's your husband, so it's his responsibility to pay this and he needs to ensure he has the funds to do so when he's completed his self assessment tax return. Even if it gets to the stage where he has to repay it in full, there are still good reasons why you should continue to claim it.

    That said, only the two of you can agree how to split your family finances. Having separate accounts for personal use and a joint account for shared expenses (including children!) is how my wife and I operate. I am paid considerably more than her, so our contributions to the joint account are split in a way that leaves us each a similar amount of personal money each month. It's what works for us.
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