[Closed] Child benefit cuts

It will push those families that have decided they could just about get by on a single wage, so as to bring their children up properly with mother interaction and discipline, back to work (incuring childcare costs - which are significantly higher in UK than elsewhere in Europe TJ) etc

Or more families will decide that both parents will work part-time?

Ive just told the wife that as I am just into the higher tax band, whereas the wife is just below, we will be better off if she goes back to work and I give up
Hooray for the Conservatives, now I can palm sprog off with the grandparents and spend every day out on the bike instead of sat behind a desk 😆
(although I will loose the cycle to work scheme)

[i]No, dividends must be declared on your tax return and will attract extra tax. [/i]

Only if the dividends take your total gross income into the higher rate tax band, otherwise they are free of tax.

ie Gross salary £5k and gross dividends £30k = £0 tax and £0 NI paid

But of course corporation tax has to be paid, because dividends can only be paid from profits.

Or more families will decide that both parents will work part-time?

Unlikely. On the whole part time jobs are less well paid and often of lower status consequently it would be difficult to find 2 part time jobs to contribute as much as a single full time.

scottyjohn - Member

Lol. There are consultants working alongside me at my current contract who pay no tax at all. They are prt of some loophole company setup by a former director at Delloitte, whereby they get paid in Bellarussian roubels and the upshot is they pay no tax and its legit.

i know a group of city IT contractors who do the same thing, most of them work at barclays

they formed their own company to do it but i think they are officially based in croatia

they are mates, i went to school with tme but their slaries are 100k+
- porsches, motorbikes,etc etc couple of flats in london, one of them just took 6 months off to go on holiday
they pay about the same tax as me

its all legal but it does piss me off, the funny thing is they were constantly whinging about how labour were ****ing up the country and couldnt wait for the torries to get in so they could make even more money!?!
the thing is will they still qualify for child benefit as tehir taxable income is certainly under 45k?

Kimbers, that is quite upsetting (but not surprising).

The welfare state was created to support real need, now it has become a prop to support lifestyles rather than true need.

And before the tirade of negative comments are heaped upon me I know there is true poverty in this country and these cases should always be supported.

The desolation of our manufacturing capability is also a massive factor.

What we need is jobs and not a papering over of the cracks that has been happening for the last 25 years.

The sense of closing coal mines and steelworks and then importing as well as paying benefits to UK workers is crazy.

Get real with the crap about kids being required etc. to support us as pensioners - it's totally irrelevant. The debate is not whether kids are necessary it's whether child benefit is, are you saying you wouldn't have had kids if the benefit didn't exist (if so I feel sorry for your kids...).

The mash are on the case

http://www.thedailymash.co.uk/news/society/middle-class-to-sell-their-children-201010043135/

😆

are you saying you wouldn't have had kids if the benefit didn't exist (if so I feel sorry for your kids...).

So aren't we supposed to make this sort of decision based on our ability to afford?

So aren't we supposed to make this sort of decision based on our ability to afford?

If you're earning £44,000 a year (in the top 5% or so of earners in the UK), and the difference between being able to afford a kid or not is £1000 in child benefit, it says a lot about your poor financial abilities.

44K a year is a lot of money. It is perfectly possible to keep a kid or two on that kind of wage even in London, let alone in the rest of the country.

I can't see any obvious reason that we should subsidize childcare for the top 5% or so of wage earners.

Obviously it is a bit unfair with the 2 salaries thing, but they were pretty clear about why - this way it hardly costs anything to administer (just a slight addition to PAYE or a note on your tax return). Whereas doing tax credit style means testing would be very expensive, and they are aiming to simplify not add complication to the system (I understand there are some simplifications / removals of family tax credits in the pipeline also).

Joe

That's a different point though FuzzyWuzzy wasn't explicitly making his comment to higher rate tax payers. Anyway, not all higher rate tax payers feel rich I'm sure - lots of other outgoings to consider and their mortgage/rent might be an issue if they're in the SE and want to live somewhere they consider to be OK.

All that has been done is another inequality, Would have been better setting a total household income rather than basing it on individual's salaries. That would get round two earning just under the 40% threshold getting it and one earning over not.

I'm not sure household income is fairer. I think a family where one partner earns 48k is better off than one where both partners earn 24k.

Why do you think that? They'll take home more as both using their lower income tax bands - some is tax free.

But it is certainly not fair that a household income of around 80k gets the benefit and one of 44k doesn't.

I think a family where one partner earns 48k is better off than one where both partners earn 24k.

You think wrong.

Interesting perspectives on here. The lose of this benefit for my wife and I can be covered in a number of ways.

1) Fewer MTB trips a year to wales.
2) Only 1 pint after work on a Friday.
3) fewer canteen lunches at work.

etc..

When I think of it like that we definitely don't need it and it won't take anything away from our little girl but on top of;

1. Forthcoming VAT rise.
2. Increased Petrol.
3. Increasing mortgage repayments (Interest rates have only 1 way to go next year)
4. Increasing car insurance costs.

It's not the best of news!

Any Joe mentioned, the gov admit that the definition of who qualifies isn't perfect but is simple to administer.

I said better off, not have less take home pay.

But it is certainly not fair that a household income of around 80k gets the benefit and one of 44k doesn't.

it does seem to be an outstandingly stupid way of doing things

I said better off, not have less take home pay

Sorry you've lost me. person 1 who gets paid less in real terms than couple 2 is better off than couple 2???

I'm not sure household income is fairer. I think a family where one partner earns 48k is better off than one where both partners earn 24k.

I said better off, not have less take home pay.

[i]2) Only 1 pint after work on a Friday.[/i]

As opposed to 8?

For me this (and tax credits) are about taking money off me in tax, and then giving me it back - so don't take it in the first place!

And
[i]44K a year is a lot of money. It is perfectly possible to keep a kid or two on that kind of wage even in London, let alone in the rest of the country. [/i]

I'm guessing from this that you've no kids and don't live in the SE?

Grrr, who voted these twunts in???

We made the decision that the misses stays at home and looks after the kids (4 of them), we believe that this is the best as it allows proper care of our kids by giving them the attention and time that they deserve to grow up into decent human beings.

I'm lucky enough to be in the higher band but not by much and fair enough cut it for high earners but surely the combined household income is a better measure.

It would be better to drop my days and send the misses out to work.

yes as one has a full time carer at home that the other does not
quality of life [better off] may not be just down to pounds and pence.
EDIT: Not saying I agree but I get the point.

it does seem to be an outstandingly stupid way of doing things

Would you say that one person working 80hours a week was better off than someone working 40 for the same or nearly the same pay? It's the same principle.

Also one couple is presumably paying childcare whilst the other isn't. If you have one partner earning and the other at home you've always got the option of the non working partner to get a job if they need more income. That's what I mean by better off.

I'm not saying the earn 80k as a couple and keeping child benefit isn't ridiculous mind.

yes as one has a full time carer at home that the other does not
quality of life [better off] may not be just down to pounds and pence.

of course but why give more money to the one with the most take home pay?

yes as one has a full time carer at home that the other does not

thats quite a big assumption

Junkyard and uluru,

big assumptions that someone earning 44K + a year has a partner.

But the couple earning £80k won't be earning that while the woman is on maternity leave + whatever time they want to take (up to a year I believe).
Like I say, I think we can manage without the benefit but I understand the methodology as the couples income will be halved (assuming equally paid jobs).

I agree that the case is different for single parents.

For any single earner family in £45..50K territory, it's seriously worth looking at the work/life balance after this, for those of us who don't see their family enough already. I'd seriously consider negotiating (say) 90% work, to get below the ~44k level and keeping the allowance. Overall loss would be probably 3..4k gross. So for probably ~ £35 a week net, I could get double the holiday, more family time, and probably help out my wife's small craft business enough to make up the difference anyway.

Perhaps it's a nice opportunity after all..

So let me get this right.

Rather than a combined household income the new system will look at both parents salary?

My wife looked after our 3 kids until they were all at school so has only recently gone back to work.
So, does this mean we both apply?

I dunny get it?

If one of you pays higher rate tax then neither of you get it.

This goes against a manifesto promise.

Say one of you is in the 40% - £44k bracket and the other works full time but only earns £10k, you loose the benefit. Yet couple next door earn £79k between the 2 of them keep to keep the benefit.

Thats fair isnt it !!

What's that Voltaire quote "the perfect is the enemy of the good"

Now I'm not a particular fan of the Conservatives, however what they are saying here seems to me to pretty sensible. If you accept that this universal benefit has to end as they do (I realise that there are those who do not agree with this) then this seems to be a pretty easy way to impliment it. It isn't completely fair, however no-one has stated that it is and in an interview this morning on Radio 4 George Osbourne acknowledged as much. What it is however is a very simple and cheap way of implimenting this change. Making it 100% fair would almost certainly involve a very comlicated system and with complexity comes cost thereby reducing the benefit to the taxpayer.

This goes against a manifesto promise.

The argument goes that the manifesto pledge was not to introduce means testing. This isn't means testing, it's effectively 'higher rate taxpayer' testing!

Whats even more ridiculous

Say you have 3 kids and earn £200 under the threshold. get a pay rise of £250 and you go over the theshold and lose £2000 pa in benefits? so your spending powewer is 1750 less for a £250 pay rise?

this is why they have universal benefits and tapers for means tested benefits.

Doesn't affect me as I earn less than 44K and my daughter is nearly twenty anyway

To my mind it seems fair enough, now lets stop all the rich pensioners clogging up the buses riding about for free and getting 400 quid to supposedly heat their houses whilst they winter abroad

clogging up the buses

2) [i]Only 1 pint after work on a Friday.[/i]

As opposed to 8?

You try going to pub to have 3 or 4 pints and not get round in when you are a team manager 😆

"Mumsnet begins to whinge at a geometric rate. It becomes self-aware at 2:14 p.m. BST, October 4th. In a panic, they try to pull the plug....."

I'm guessing from this that you've no kids and don't live in the SE?

One kid. Lived in London until recently (although before kids).

It is clearly quite possible to live in London with a kid and not have anything like 44k income. I know people who do it. It is also possible to decide that you want a lifestyle that requires a massive income, and to spend pretty much any amount of money you happen to have on your lifestyle. It isn't obvious to me that the government should subsidise people with more expensive lifestyle choices, or who choose to live in fancy areas?

What it is however is a very simple and cheap way of implimenting this change. Making it 100% fair would almost certainly involve a very comlicated system and with complexity comes cost thereby reducing the benefit to the taxpayer.

Exactly - you can hate the tories (what sane person doesn't?), but if they want to save money by cutting child benefit bills, this is probably a practical way to do it. The big problem with most alternative ways people are suggesting, is the great big administrative cost, which would probably wipe out much of the savings, and create complicated screw ups, like in the current tax credit system, or ways to dodge it. Here, there is one simple rule, which you have to be aware of.

Also, surely most people on that level of pay are negotiating their pay rises, rather than just being given particular fixed rises, so I'm sure people will keep it in mind when negotiating pay rises that go past the threshold.

Joe