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Child Benefit Changes Come in to effect today (07/01/2013)


Genie
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Families with one parent earning more than £50,000 lose part of their child benefit and it will be fully withdrawn where one parent earns above £60,000.

They have also pointed to the fact that a family where two parents work and both earn £49,000 a year will keep their benefits, while a family with a single earner on £51,000 - where the other parent may have chosen to stay at home in a caring role - will lose part of theirs.

The government hopes to save £1.5bn a year to help reduce the deficit

What are your thoughts on this. I have to say, as the only earner in a family with 2 children and a stay home mother I'm bloody furious. My incentive for working hard and earning payrises will be the get an extra bit of my salary going off to the government whilst other families earning more can be laughing all the way to the bank.

There was a mini debate (rather than a mass debate) on 5Live this morning, the woman who was trying to defend this really did embarrass herself as there simply is no way to defend it. Its simply not fair and needs another revision.

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There is no way to defend this for some of the reasons you say. This is just another example of the targeted cuts by this Gvmt that show that their words are nothing more than hot air.

I think that this has been one of the occasions where mass spewing of lies and propaganda have actually made most people unaware of the reality of what is happening and what impacts it will have on the middle - lower paid in society.

Put on the very big pile of awful policies implemented by an awful Gvmt

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The problem is governments don't think things through

Friends of my parents live in Spain and yet still receive the winter fuel allowance( least they did I don't know if it still exists ? ) , you can be a millionnaire and get a bus pass etc ....

In principle taking it away from people who don't need it isn't a bad idea , but the execution is wrong where 2 earners in a household of say £40k each keep it whilst one of £60k loses it.... All it does is provoke a reaction of unfairness

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Quite right Tony but its worse than the figures you mentioned. One earner of £50,001 will have to fill in a tax return and expect some more tax, 2 earners of £49,999 will happily still get an extra £1500+ a year (based on 2 children).

Its one thing saying money needs to be saved 'cos of the deficit/debt problem. Its another to do it so unfairly.

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what impacts it will have on the middle - lower paid in society.

You'd have trouble persuading me that a family where only 1 of the wage earners earn't 50K+ is 'lower paid'.

Yes, the implementation of this policy is wrong, but let's be clear about it, it's going to hit middle to high earners, not the poor/low paid.

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You'd have trouble persuading me that a family where only 1 of the wage earners earn't 50K+ is 'lower paid'.

Yes, the implementation of this policy is wrong, but let's be clear about it, it's going to hit middle to high earners, not the poor/low paid.

Fair point Jon, I suppose that is the problem trying to "label" certain wage groups because there are a million and 1 different circumstances that will affect the impacts of monies coming in (and going out)
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I think it may hit middle to low earning 'families'. I believe £25,000 is below the national average so a family income of £50,000 can be considered lower than 2 people who earned the average.

Edited by Tamuff_Villa
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I think it may hit middle to low earning 'families'.

Hmmm. Again, you'd have trouble persuading me that a family earning 50K+ is low earning, especially where that income is garnered by 1 sole earner, and the other partner (assuming there is 1) does not work.

I'd imagine childcare costs for starters will be a lot less for said familes?

Obviously everyones circumstances are different, but IMO this is going to hit middle earners, not the low paid.

Depends on your definition of low paid I guess. Does the partner in such a family choose not to work (to look after children for example)?

I thought this was a staged reduction anyway for those near the 50K mark, not a full removal of the benefit?

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Why are we all typing in BOLD?

Anyway - IMO sensible policy - families on 50k+ dont really need Child Benefit - but poor execution. Should be based on household income not individual as others have said.

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Its actually worse to be earning £50,000 x 1 rather than £25,000 x2 though isn't is as you're only getting 1 tax free element (first £8k or so).

Take home pay from 1x £50k salary is £35,781, take home pay from £25,000 salary is £19.533, x2 earners is £39,066 or £3,285 more!! Not only are the £49,999 earners still getting the Child Benefit they're also benefitting from 2 tax free elements of their salary.

Childcare costs stop parents going back to work. It would not be worth my wife working as she probably wouldn't earn any more than it would cost to have 2 children in full-time childcare.

It is a staged reduction.

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What are the chances of a U-Turn and it being moved to household income rather than single earners?

Loving the Bold by the way.

None.

Too much admin that the already **** HMRC couldn't handle.

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See its not just as "simple" as saying families above 50K (Eames you have purchased the Gvmt fed info pack I suspect)

I like the Grud's analysis on this

link

Age: First paid out in 1946.

Appearance: Every four weeks in the bank accounts of millions.

What is it? A universal welfare payment for parents worth £20.30 a week for the eldest or only child and £13.40 a week each for the rest.

And the government is cutting it? It is indeed. Or, at least, it's no longer going to be a universal payment.

Meaning? Meaning, as of 7 January, 1.1m parents earning more than £50,000 a year can expect to see their benefits substantially reduced, and the 820,000 parents pocketing more than £60,000 a year will somehow have to learn to live without.

And presumably this is saving the taxpayer money? Yup. An estimated £1.5bn next year, in fact.

Doesn't sound wildly unreasonable, does it? In theory, no. In practice, there's a right way to make a cut and a wrong way.

And this is the wrong way? No, this is the bizarre way. For a few reasons.

Such as? Such as the fact it doesn't distinguish between single-income and double-income families, meaning a single parent on £60,000 a year will lose their child benefit entirely and a couple on £50,000 each will keep every penny of theirs.

Well that's just silly. Yup. But not as silly as the HICBC.

The what? The High Income Child Benefit Charge. Rather than simply stop or reduce the payments for parents earning more than £50,000, HMRC have created the HICBC to claw it back. Which, for most people paying it, will cost exactly the amount they have received in child benefits, but require them to fill out a lengthy self-assessment tax return.

Making it less of a child "benefit", and more of a child "paperwork-intensive interest-free mini-loan"? Essentially.

Is there any way to avoid the faff? Only by opting out of receiving child benefits entirely before 7 January.

That's a bit short notice. It is. Especially for the more than 300,000 parents who will be liable to pay the charge but have not received a letter, phone call or email about it.

Do say: "Surely there's a better way?"

Don't say: "We're going to end up with rich people having kids just to get cheap payday loans."

This Gvmt would have been hard pressed to make a bigger pigs ear of this whole policy if they wanted to. At a time when many are now seeing through the Gvmt sponsored BS about benefits and seeing that people like IDS are nothing more than a vindictive failed leader, the way they have tried to sell this as being "fair" is ineptitude of the highest. Maybe the richest in society wont miss it anyway because of their tax cuts :-)

I see that Boris scored a cracking OG with his so called defence of the inept policy. He said

“We’re looking at 10 half-decent ski holidays here, or about five luxury safaris. We could have laid down a cellarful of Chateau Lafite, or picked up an Old Master drawing, or a share of a lovely little place in Spain.”

Not exactly a reflection of the man in the street is it, at a time when the Tory party has a (quite right) image of being only supporting those who are at the higher end of the income scale

Edited by drat01
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See its not just as "simple" as saying families above 50K (Eames you have purchased the Gvmt fed info pack I suspect)

Strange comment - all I've said is its a good idea - but implemented badly.

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Not exactly a reflection of the man in the street is it, at a time when the Tory party has a (quite right) image of being only supporting those who are at the higher end of the income scale

haven't we just been discussing a policy that is penalising those at the higher end of the income scale ??

it's not like they've penalised the poor by scrapping the 10p rate now , is it :)

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haven't we just been discussing a policy that is penalising those at the higher end of the income scale ??

it's not like they've penalised the poor by scrapping the 10p rate now , is it :)

:-) ........ and there it is the "ahhhh but Labour ,....." oh how we have missed you

So I suppose that the tax breaks that give the higher earners significant more monies are to be ignored then? You see you can try and try and try Tony to deflect from the unfairness of the Tory party policies (most of them long term held beliefs) but the reality is that they keep coming back and biting you. And interestingly you have obviously (again) not read the point that was being made re Boris - still lets not context get in the way of trying to deflect from an obvious bad move by the party eh?

Maybe a thought on how you reconcile the tax breaks against the obvious errors in this flawed policy?

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The problem is governments don't think things through

In principle taking it away from people who don't need it isn't a bad idea , but the execution is wrong where 2 earners in a household of say £40k each keep it whilst one of £60k loses it.... All it does is provoke a reaction of unfairness

Exactly. it's (as is almost always the case with this Gov't) a mess. They mess everything up. The idea of taking beneifts from the wealthy is arguably supportable in times of need. Though Cameron won't countenance taking some payments from very rich pensioners.

An inconsistent, badly implemented, unfair mess.

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The political problem for the tories in this one is the bizarre distribution of the impact. No-one likes losing any benefit they have, that's a given. But the perceived unfairness of the way the cut falls will create bitter resentment among a certain band of people.

The IFS have show this graphically. This is the impact on marginal rates of tax, by income. There's a cluster of people who are hit worse than those below them and those above them. Putting this together with the discrepancies between single earner and dual earner households compounds the sense of unfairness.

But that's what happens when you make a policy pronouncement on the hoof, then whack it across to the officials and say "There you go son, implement that". You can't easily shoehorn one measure in to a complex package of benefits without some odd effects. Whatever you think of the idea of cutting child benefit, it's a poor, poor example of policy-making.

child_benefit.jpg

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They should of done it on household income. The way they gone about it is messy. I have no sympathy for people who moan they not getting it anymore £50k is a lot of money. I earn between £14k-£15k a year me and my partner have 1 kid. Add on our benefits we don't get housing or council tax benefits btw, we get less than £20k but we get by fine. It's just annoys me when I hear people on the radio crying about it. Your spending ur money wrong if you miss that money and on £50k+

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