Higher rate tax payers to lose child benefits

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Higher rate tax payers to lose child benefits

349 posts & 73 voices | Started 4 months ago by randomjeremy | Latest reply from randomjeremy

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randomjeremy - Member

So I read this article about how there are to be changes to the child benefit system.

I don't have kids but this seems really unfair to me; a family with two parents earning £42k each qualify for benefit, but a family with one parent earning £43k don't qualify (even if the other parent doesn't earn anything) - are you suddenly rich if you earn £43k a year?

I'm sure this proposal will affect many people on STW - what are your thoughts? Are you going to make bigger pension contributions to bring yourselves under the £43k limit? Work less? Just "MTFU"?

Posted 4 months ago #
ScottChegg - Member

If it was both parents as higher rate taxpayers it would be reasonable to disqualify them.

Just the one being higher rate is a bit unfair.

Posted 4 months ago #
yunki - Member

no this again..!?

it does seen unfair.. they should apply it all..

most people I know that are in receipt of child benefit are unlikely to make 43k in five years

Posted 4 months ago #
gonefishin - Member

Anyone above the age of about 9 years old who uses the phrase "that's not fair" is in need of a reality check. They may well be correct, but life's not fair so deal with it.

Posted 4 months ago #
CaptJon - Member

Tory welfare cuts are unravelling. The defeat in the Lords the other night, now this.

Culture Secretary Jeremy Hunt has said the government is looking at ways to make controversial plans to cut child benefit "fairer"

David Cameron also hinted moves to scrap the benefit for families where one parent earns more than about £44,000 a year could be amended.

But Treasury sources said there had been no change in policy.

They should have a chat and work out what they want to do.

Posted 4 months ago #
b r - Member

In every tax/benefit system you get these 'steps'...

most people I know that are in receipt of child benefit are unlikely to make 43k in five years

Eh, don't think so - unless you're still living in the 20th Century.

Posted 4 months ago #
ahwiles - Member

are you suddenly rich if you earn £43k a year?

no.

you're rich long before then.

Posted 4 months ago #
wwaswas - Member

this was originally rushed out when there was a bit of a 'look the tories are just attacking benefits for the poor' thing goign on during the party conference season so they said 'look, we're going to hurt the relatively well off as well'.

Only, as above, they hadn't really thought it through.

My household income has been pretty much static for the past 5 years, we seem to have less money available each month due to rising food and fuel costs etc.

We are 'well off' in terms of the tax bracket thing but, clearly, losing £120/month is a 1/4 of our amnnual food bill we have to find from elsewhere so it's going to have an effect.

I'm in two minds really, yes I could probably afford to not have it (but then so could people earning under 44k who own their own home, for example) but it's also a good way for the state to 'reward' those who produce children that will be paying for the future retirement and health benefits the current 'crop' of workign age people will require.

Posted 4 months ago #
stilltortoise - Member

Proposed-plans-for-Government-to-reduce-hand-outs-causes-some-people-to-be-worse-off shocker

(but I agree that is doesn't seem that well considered)

Posted 4 months ago #
yunki - Member

Eh, don't think so - unless you're still living in the 20th Century.

LOL.. oh dear.. a miscalculation on my part..

I'm not far off at all though

Posted 4 months ago #
stevewhyte - Member

About time the rich English started to pay their way.

Just glad that in Scotland we are not introducing this

Posted 4 months ago #
TandemJeremy - Member

40 000+ a year puts you in the very well off indeed category - don't whinge.

Posted 4 months ago #
petrieboy - Member

Higher rate tax payer in recipt of CB here. To be honest, I was a bit surprised to recieve it when we did (never had any cause to understand the benefits system) and it seemed odd to be giving money to people that already had enough. Seems a little unfair that many of our friends with similar or greater household incomes will continue to get it but I suppose the alternative is increased administration overhead and associated expense.
Ultimately, benefits should be based on need, we dont eed so im comfortable with loosing out, I do wonder how much it will actually save tho.

Posted 4 months ago #
hora - Member

I don't get it. We don't/aren't entitled to a penny. Even when mrshora wasn't earning anything for a year and I was working alot less to help out.

On the flipside we know a couple who get £400 a week in tax credits, both work but have two babies. She also works part time now like mrshora.

Posted 4 months ago #
Junkyard - Member

Anyone above the age of about 9 years old who uses the phrase "that's not fair" is in need of a reality check. They may well be correct, but life's not fair so deal with it.

This is about the actions of a govt and their policies making something deliberately unfair rather than fair. It is reasonable to say to a person or agency that it is not fair when they are being unfair when they could be fair it may be different if we say this to nature [its not fair steve peat is a better MTB than me for example]....everyone realises life is unfair on many levels but that does not mean we cannot protest when the govt does something unfair

I dont have a problem with the principle of stopping child benefit for the wealthy [ and 40k is wealthy] but the implementation is rubbish.

hora you dont get tax credits because you earn too much [ and they base them on last years earnings when mrs hora was working] and non one but no one with two kids is getting £20 k per annum tax credits...did you mean 400 per month

Posted 4 months ago #
mudshark - Member

No point arguing about how well off earning £40k makes you. The point is that a minor payrise at the wrong salary level results in people with kids being worse off so that's bad. The idea was that it's simple (cheap) to implement.

Recent studies have shown that people with kids are losing out most in recent changes to save money so I suppose this might have something to do with it.

Posted 4 months ago #
mogrim - Member

40 000+ a year puts you in the very well off indeed category - don't whinge.

Depends where you live, and if both of you (assuming a married couple + kids) are working. In London you're hardly "very well off".

Still, to the original argument: seems fair to me. Massively annoying if you're just above the cut off point, of course, but in that sense no different to any tax band. Is there any real reason they can't simply apply a percentage based sliding reduction on the benefit, rather than a binary cut-off?

Posted 4 months ago #
stilltortoise - Member

40 000+ a year puts you in the very well off indeed category - don't whinge.

We all live to our means, even if those means may seem "well off" to others. If your income is then reduced why on earth would you just take it on the chin? Don't expect sympathy maybe, but put-up-and-shut-up is not the answer in a democratic society.

Posted 4 months ago #
Junkyard - Member

you would take it on the chin because you can afford it...what happens now? they have to buy less Olives and capers and can only have one foreign holiday a year ...they dont suddenly plummet into poverty as a result of this

Posted 4 months ago #
TandemJeremy - Member

Oh yes you are mogrim - no matter where you live that level of income puts you into the wealthy elite. get real.

What makes me laugh about this whinging is its the situation that has existed for years for the poor - high marginal tax rates where earning a bit more takes you over a threshold and you lose benefits.

This is why we have universal benefits and long tapers to prevent this situation.

Posted 4 months ago #
b r - Member

40 000+ a year puts you in the very well off indeed category - don't whinge.

Yer, right - you've not kids have you TJ?

And it can't make you very well off as you are still entitled to benefits

Posted 4 months ago #
nickf - Member

Here's the thing though. If you're a higher tak payer, you've seen the removal of personal allowances, an increase in tax rate, the removal of the cap on NI (and an increase in it), and now the removal of child benefits.

Labour always used to be thought of as the stealth tax party, but the Conservatives have learned well from them.

Posted 4 months ago #
mudshark - Member

Raising a kid is so expensive these days that £100/month (or whatever it is) child benefit doesn't have much impact really, supposed to ensure decent food and clothing I suppose. The better off will sort this out anyway and the poorer might not be able to without it - though apparently some parents use chunks of it for themselves

http://www.telegraph.co.uk/news/politics/8929809/Feckless-parents-would-only-spend-extra-benefits-on-themselves-says-Iain-Duncan-Smith.html

Posted 4 months ago #
mudshark - Member

Oh yes you are mogrim - no matter where you live that level of income puts you into the wealthy elite. get real.

Rubbish. Elite is a small %age in my definition, £40k puts you in about the top 10% nationally. In parts of the SE it's a lot lower than that.

Posted 4 months ago #
stilltortoise - Member

I think this is the reason it is a problem worth "whinging" about:

a family with two parents earning £42k each qualify for benefit, but a family with one parent earning £43k don't qualify (even if the other parent doesn't earn anything)

Or, to rephrase it, a family with £84k income can qualify but a family with £43k income might not. That's what makes it sound unfair to some. On the flip side, if it was done on joint income then there will be a lot of families with modest individual incomes who would lose out too. Like I said above, there are always losers when the government want to claw back some money. It's just maths and if the maths didn't add up this way there would be no point in the government doing it.

I still don't think it means people should just put up and shut up tho'

Posted 4 months ago #
clubber - Member

Ignore TJ - he's essentially right actually but he clearly gets enjoyment in seeing anything that makes people a bit less happy (regardless of whether that's justified).

Posted 4 months ago #
Junkyard - Member

And it can't make you very well off as you are still entitled to benefits

its a universal benefit so having a child makes everyone entitled, billionaires even.

are we now actually arguing that being in the top 10% does not make you well off or wealthy ....can anyone do statistics here and care to say how many SD above the norm that is

Posted 4 months ago #
ransos - Member

Depends where you live, and if both of you (assuming a married couple + kids) are working. In London you're hardly "very well off".

Yes you are. £40k is double the median salary in one of the richest countries in the world.

Posted 4 months ago #
mogrim - Member

Oh yes you are mogrim - no matter where you live that level of income puts you into the wealthy elite. get real.

You're wrong (hint: "wealthy" and "elite" are comparative, subjective definitions), but as I know there's no way of convincing you, I'm not going to bother.

Posted 4 months ago #
mudshark - Member

Universal benefits are great really as the better off pay so much tax that the benefit is small in comparison but they still think they're benefiting from paying all that extra tax.

Posted 4 months ago #
binners - Member

Hora - In your case its personal. They're trying to stop you breeding any further. For this they have the eternal gratitude of the nation.

Stop moaning!

Posted 4 months ago #
miketually - Member

I don't have kids but this seems really unfair to me; a family with two parents earning £42k each qualify for benefit, but a family with one parent earning £43k don't qualify (even if the other parent doesn't earn anything)

The simple solution here is for the person earning enough to pay 40% to take get a worse paying job and for their non-working partner to go out to work. Problem solved!

The tax system is already 'unfair'. If both halves of a couple earn £25k each, they're better off than a couple with one person earning £50k and the other not working.

Between the two of us, we don't earn as much as one person in the 40% bracket. We have two kids and while we'd notice the removal of Child benefit, we'd manage.

Posted 4 months ago #
mogrim - Member

Yes you are. £40k is double the median salary in one of the richest countries in the world.

So a single earner in a household with one dependent partner and two kids would be "wealthy elite", then?

Posted 4 months ago #
TandemJeremy - Member

top 10% by income = small wealthy elite

The distorted values of some on here is laughable. Yes you are rich if you earn £40 000+.

Posted 4 months ago #
TandemJeremy - Member

So a single earner in a household with one dependent partner and two kids would be "wealthy elite", then?

Yes. top 10%

Posted 4 months ago #