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

Muttleythefrog

Username03725 said:

Saetana said:

Myself and my late husband opened a joint account within two weeks of getting married.  Sometimes I earned more than him, more often he earned more than me - however it was always "our" money, never mine or his.  I will never understand why married couples, assuming you are in a happy marriage, have separate accounts.  Because this is exactly the type of issue that occurs when you both have separate accounts and a "joint" account that you are both supposed to pay into.  Talk to your husband, not the internet!

But what works for you doesn’t have to work for everyone else. We got married in our 30s and were well used to looking after our own money, now with a joint pot alongside. Works perfectly for us, but it doesn’t mean our choice should be everyone else’s.

Re the original problem course he should refund it. The fact that it’s giving you angst is enough for him to do that.

It might be giving him angst that he has a wife who thinks a public referendum should be held to deal with minor transactions on his (or their or her) bank account. (Imagine what she'd do in a real crisis like finding unfamiliar knickers under her bed and him trying to convince her they're his.. that's when you need public assistance... to find out if he's having an affair or a mid life crisis). Divorce is the only option here before they start a national debate on Corrie versus Eastenders because they can't agree who has the remote control. It all reminds me of the frightful experience of having my Aspergers afflicted wife trying to decide between mushy and garden peas at Wetherspoons.. and what a mess that turned into when she changed her mind on receipt of the latter... all paid for using our joint account I should add.

Simplelogic

It is difficult to understand why a simple financial agreement is being converted into a 'moral' dilemma? This couple has hitherto agreed to split their expenses equally, and that is entirely their business to decide, without regard for who earns more, and without requiring any moral overtones from anyone else!
Child benefit is to assist with bringing up children and surely also an equal responsibility of both parents. So the benefit credits should go into their joint expenses account, maintaining the existing arrangement - there seems no logical reason to change their existing agreement (perhaps of many years) just because one partner has had a pay rise! Let them also deal with their individual tax liabilities separately, which is a very different item to their joint regular expenses.

Just_Incase

1. It depends where the CB is being paid into. Refunds should be taken from the account it was paid into. CB can't be setup to be paid directly to child account. If you use the monies received to then forward onto the child accounts, then adjust the transfer amount to be lower/match the new adjusted amounts.

2. @mse Govt should make it fairer and make CB based on total household income. At the moment if both parents earned below the threshold e.g. £49,999k each they are entitled to full CB, but if one parent earned £55k and the other only £25k, you get reduced CB rate. This doesn't really seem fair at all.

Flipflop13

Keep separate accounts and don’t be led by the ‘your married why would you have separate money’ line. Should anything change in a relationship, having your own account with some reserved funds would be a good idea. Also if anything happens with the joint account (network issues for example), there’s other accounts available to use in emergency. Finally we change banks every few years to get the switching deals so three different banks and over £500 in cashback.

We get paid into separate accounts and send over to a joint account a big chunk to cover everything house or child related. My husband pays more as he earns more but we don’t do a percentage, just an amount combined we knows covers outgoingd, if anything comes up and the joint account is dry then whoever has money leftover just pays it, we don’t keep track. 

Back to the question, it doesn’t really matter in the long run as you could take it out the joint account but if that needs topping up, he’s going to be the one with more of his wages leftover so inevitably it will end up coming out his funds anyway

Lancsbreaker

Seems simple - pay the money back from whichever account the benefit is paid into - if the government operated it sensibly it would reduce the payment before it was issued, not require it repaying subsequently.....

Pollycat

Glad to see this thread has been moved to a more appropriate board.

gloriouslyhappy

HannahNP said:

blagoslovljena said:

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.

Is not that benefits fraud?

Changing real income for benefits purposes?

I believe benefits fraud can be liable for prosecution. 

Also your money and enjoy it. 
Who knows we will be around for ornsion days and someone else comes and enjoys it

Benefits are to support in need. If earnings above threshold need had moved too

Nope, it's a legal way of increasing your pension - and that way you're more likely not to need assistance in old age so it's encouraged.

JayD

I am unable to relate to a 'family' that has separate finances. I consider fully committed relationships - especially with children - ought to have completely joint finances. Both contributing all their income and that income paying for all the bills and needs of the family.

tastyfish

Not sure what the dilemma is here. If it's his pay that affects the reduction in CB then he has to pay back the proportion to be repaid.

If his earnings are now above the £50k threshold before CB starts being cut then HMRC will amend HIS tax code to reclaim the amount of CB overpaid under the rules of the High Income Child Benefit Charge. (Once he earns over £60k his tax code will be amended for HMRC to reclaim ALL of the CB).

How they do this is by reducing the tax free allowance according to the amount that needs to be repaid. It's something like this:
If he has to re-pay £500 his tax-free allowance will be reduced by £2500. This means he will now pay 20% tax on an extra £2500 of his taxable income, or £500.

Agree with a previous poster, you can get round this by being efficient with your tax, ie reduce the taxable element to below the CB threshold of £50,000 by shoving the 'excess' into a pension, if you can afford to do so. No, this is absolutely not fraud, it's being smart.

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Don't get me started on this, the HICB Charge is a great example of how NOT to implement government policy. A household where both parents earn £50,000 (resulting in Household Income of £100,000) can get full Child Benefit. A household where one person earns £60,000 and the other earns nothing gets absolutely nothing (swapping tax allowances aside, which doesn't apply to unmarried couples anyway). I'm not saying we should get CB when our income is £60k and £100k, I just think if there's going to be a £60,000 cap then it should apply to HOUSEHOLD income, not one persons. A different subject though.

Pollycat

JayD said:

I am unable to relate to a 'family' that has separate finances. I consider fully committed relationships - especially with children - ought to have completely joint finances. Both contributing all their income and that income paying for all the bills and needs of the family.

But it works for some people (not me).

What I find worrying is that someone feels they need to ask random strangers on t'interweb what they think rather than having a discussion with their partner.