Higher rate tax payers to lose child benefits

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  • Higher rate tax payers to lose child benefits
  • 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”?

    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.

    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

    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.

    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.

    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.

    Premier Icon ahwiles
    Subscriber

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

    no.

    you’re rich long before then.

    Premier Icon wwaswas
    Subscriber

    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.

    Premier Icon stilltortoise
    Subscriber

    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)

    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

    stevewhyte
    Member

    About time the rich English started to pay their way.

    Just glad that in Scotland we are not introducing this 😉

    TandemJeremy
    Member

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

    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.

    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.

    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

    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.

    Premier Icon mogrim
    Subscriber

    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?

    Premier Icon stilltortoise
    Subscriber

    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.

    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

    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.

    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 🙂

    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.

    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

    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.

    Premier Icon stilltortoise
    Subscriber

    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’

    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).

    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 🙄

    Premier Icon ransos
    Subscriber

    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.

    Premier Icon mogrim
    Subscriber

    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.

    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.

    Premier Icon binners
    Subscriber

    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!

    Premier Icon miketually
    Subscriber

    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.

    Premier Icon mogrim
    Subscriber

    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?

    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+.

    TandemJeremy
    Member

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

    Yes. top 10%

    Premier Icon sadmadalan
    Subscriber

    Originally child benefit was a fixed amount per child per week and was paid to the mother. It was originally seen as a means of getting money to the mother to ensure that children were fed as the father spent his on beer!

    Changes in society have forced changes into child benefit, different rates for first and subsequent children, more women work and people in relationships are individually taxed. Based on this, some of the original concepts about child benefit no longer apply.

    Hence the Government now want to make it based on income. The idea of using higher rate taxpayers as the key is that this is quite easy to determine. However it does lead to the anomalies as shown.

    I suspect that what will happen is that child benefit will be merged into the tax credits system. The number of children you have will change the income levels for the tax credit assessment. This should get rid of some of the anomalies, but those that lose it will complain.

    In my personal case, we are just about lose child benefit as the youngest is 18 and it will cease when he finishes his A2’s this summer. Still expensive to run, the amount of food and 18 year old lad can eat is scary!

    therealhoops
    Member

    My salary has crept me into the higher tax band but I rely on CB to stop me going in to the red each month. Mortgage + nursey fees + the unexpected are killing me. Why only yesterday our toilet threatened to cause a water feature in the kitchen below but I had to fix it myself coz there wasn’t enough to cover a plumbers call out fee.
    I still don’t understand how I’m borderline struggling on the money I’m on but at least I’m now an expert on siphons,plumb pliers and flapper seals 🙂

    Junkyard
    Member

    it wont, if he stays in education as it stops when he turns 19

    gonefishin
    Member

    Inequities already exist in the tax system and I don’t see this as being any different just becuase it involves the benfit system. To use the same sort of argument that is being use to demonstrate the “unfairness” of the removal of this benefit, is it fair that a family income of £44k with one parent working will pay more income tax than a family income of of £44k with two parents working?

    I say again, life’s not fair so deal with it.

    Premier Icon ransos
    Subscriber

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

    You can use whatever description you like. I’ll stick to the facts – namely that £40k is double the median salary in the world’s 7th richest country.

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