Osborne Scraps Child Benefit For High Earners

[Brendan]

I just love the logic spewing forth from the mail and the telegraph today. People on 10K who need council houses are labled "scroungers" but when folks earning 50K get their child benefit taken away it's "unfair".

Why are people such wankspanners?

Why oh why oh why?

[Brendan]

In fact that may be a good idea for a thread.

[SeanMacGabhann]

Or at least a show on e4

[silverfox]

Interesting bit of news in The Times this evening:

Child benefit cut could hit millions more when tax band falls

Hundreds of thousands more families than expected could be hit by the decision to withdraw child benefit, it emerged yesterday.

Almost two million workers who are currently basic-rate taxpayers, including tens of thousands of teachers and policemen, are expected to become higher-rate taxpayers over the next five years because the starting level for the top-rate band is set to fall from next year. This means that hundreds of thousands of families could find that by 2013 they, too, will lose the weekly payment...

...Anyone currently earning between ?36,500 and ?42,000 is likely to become a higher-rate taxpayer before the end of this parliament if their wages increase in line with expectations...

[Jeremy]

Brendan Wrote:

-------------------------------------------------------

> People on 10K who need council houses are labled "scroungers" but when folks earning 50K

> get their child benefit taken away it's "unfair".

I know. I am still struggling to understand what is unfair about not paying these benefits to higher earners.

[Huguenot]

I'm struggling to understand why we have a Child Benefit system anyway.

Same as the married couple's allowance, what's the justification for that?

I'm aware that poorer sections of society need income support, I'm just doubtful that it should be linked to having children or being married.

I just don't see why we should be paying other people to have kids.

[DJKillaQueen]

What was the original idea behind child benefit?

It was first introduced in 1946 as part of the Beveridge Report which sought to tackle squalor, ignorance, want, idleness and disease. Part of the idea of the then nmaed 'family allowance' was to make sure the mother could feed her children as it was commonplace for fathers (working or otherwise) to spend all their money elsewhere (which is why it is paid to the mother). This was a time when most women didn't work (many having given up war time jobs for the returning men) and relied on their hisbands or charities for support. So Child beneifit was designed to pay for food at a time when most families were in need of it.

It is completely irrelevant for today where most of the families in receipt of it are not living in squalor nor poverty.

And I totally agree with the comments above regarding the hypocracy of the press in bashing the poorest who live on just ?65 a week whilst for most affected families, the loss of child beneifit will mean no more than the loss of a holiday or the second car.

[silverfox]

Huguenot said:

"I know. I am still struggling to understand what is unfair about not paying these benefits to higher earners."

There is probably nothing unfair about taking away the Child Benefit allowance from higher earners. What is unfair is the way it is being proposed. It's illogical and ill-thought out. A person/household earning ?44,000 gets no allowance, two people next door both earning ?43,999.99p get it.

The unfairness is the way it hasn't been thought through, despite the arrogance of the Children and Families minister saying "It's fair, end of. End of." It's also becoming obvious that hardly anyone in cabinet yet alone government knew about the plans or that it was going to be announced at conference. Teresa May was asked 11 times by Jeremy Paxton on Tuesday when she first heard about it and refused to answer the question, although she did deny the first she heard of it was on BBC News that morning. Baroness Warsi was asked the same question by Andrew Neil at least four times yesterday and again refused to answer the question.

Why does this matter if the policy is reasonable and fair? Despite it being a PR disaster that hijacked the Tory conference it does not inspire confidence or bode well for the rest of the cuts to be announced if they are all as badly thought out as this. (I still think this won't see the light of day in its present form).

When all's said and done this is just an pay cut for middle class parents, although the income is unearned. What is more worrying is some of the proposed benefits cuts for welfare claimants. You can't cut housing benefit etc unless you offer the claimants real jobs for them to do. Many working people would struggle without help with housing costs. With figures of 80,000 people becoming homeless if such cuts were implemented being quoted the Coalition cannot afford any more ill-thought out, half-cocked policy releases. We cannot leave people out to hang and dry.

If we're not careful we'll see riots that make the Poll Tax riots look like a playground squabble.

[Loz]

There is probably nothing unfair about taking away the Child Benefit allowance from higher earners. What is unfair is the way it is being proposed. It's illogical and ill-thought out. A person/household earning ?44,000 gets no allowance, two people next door both earning ?43,999.99p get it.

This is true, but can you suggest a fairer, cheap way of doing it? Look at the mess tax credits became.

[Brendan]

Quote:

"There is probably nothing unfair about taking away the Child Benefit allowance from higher earners. What is unfair is the way it is being proposed. It's illogical and ill-thought out. A person/household earning ?44,000 gets no allowance, two people next door both earning ?43,999.99p get it."

Although the reality (at least before children go to school) is that for the couple who both earn ?43,999.99p one of them will have to give up work anyway because the cost of childcare will be equal to or more than one of their salaries.

[silverfox]

I agree that setting up a system to establish that combined household income exceeding ?44,000 will be bureacratic and expensive especially where the couple is not married or even living separately.

Off the top of my head, keep giving it to children as now but reclaim it through the tax system retrospectively as unearned income. High earners have the ?1,000 odd pound deducted from the sole salary or divided between the joint salaries. Those families whose joint income comes in under ?44,000 in a particular tax year can then claim it as an allowance upon proof of cross-checking their individual tax returns. This also has the advantage of not penalising those without children.

It would only require a tweak to the pre-existing tax system.

[Brendan]

There?s also the regional issue. In the West Midlands, or one of those other made up places, a family of 4 with one earner bringing in ?45K will be doing pretty well while the same family on the same money living in London will probably be pretty reliant on the child benefit.

[silverfox]

That's a very good point Brendan - the relative value of salary/income. In my home town in the West Midlands I know of solicitors and accountants whose earnings would be laughed at in London yet they live very comfortable lives thank you very much in houses with big gardens the value of which wouldn't buy you a three bedroom flat in East Dulwich.

Ironically, that may be an argument for lowering and raising the level of income at which to exclude earners from receiving Child Allowance eg, combined income of, say, ?35,000 in Scunthorpe = no child allowance. Combined income of ?150,000 in Chelsea = no allowance. Quite messy though and nobody has to live in Chelsea.

[DJKillaQueen]

Yes this why so many middle income families are so called 'whining'.....the reality is that the coust of living and housing in some parts of the country is so high that a 44K salary is barely covering the costs of living. For me the housing market (today again described as over inflated by the EMF) is part of the problem with out economy.

But at the same time, the cruelty of this government in imposing welfare cuts to the poorest right away and delaying cuts to the better off for a few years smashes any idea that 'we are all in this together'. Same old tories, same old prejudices.

[Ridgley]

I absolutely agree DJKQ on this one, normally when there are cuts by the Tories it is usually the poorest that are worsted effected looking at the history of Tory governments so there is no surprise when they decided to cut middle income benefits they are up in arms about it.

[Loz]

To be fair, at least they are trying to make cuts at the middle class/richer level. Previous governments have been scared witless to go anywhere near them. I just amazed that Labour are trying to oppose them on the Child Benefit cuts. I had hoped that, after his speech, Ed M would have been above this sort of thing.

[Ridgley]

The Tories will make cuts, we just have to see how bad it will get :X

[Loz]

Labour would have made cuts, too. Your point is...?

[Ridgley]

But would Labour, go as far as the Tories this is the question?

[Loz]

Yeah, but it's a bit like being asked if you want to be punched in the head four times or five times. It's still people wanting to punch you in the head - the fact that one of them wants to punch you 20% less is of little comfort.

[????]

I'd rather Caroline Flint punched me than Kenneth Clarke say

[Loz]

Yvette Cooper will kick you in the Balls?

[peckhamboy]

Or perhaps like being asked to choose between being punched in the head five times this year and being punched in the head twice this year and three times next year. And then maybe a couple of times the year after that.

[Ridgley]

The point is we will have, whether we like it or not just have to wait and see how deep it will be.