Child Benefit Cuts
Millions of parents around the UK will be getting a dreaded letter this week from HM Revenue and Customs spelling out how their child benefit (currently £20.30 a week for the first child and £13.40 for all subsequent children) could be cut in January 2013.
The cuts and the letter explaining it all basically says households where at least one person earns more than £50,000 will have the benefit reduced, with the highest earner in the household paying an “income tax charge” equivalent to some or all of the amount they currently get. This means if you have two children you will effectively have lost half the benefit by the time you are earning £55,000, and the lot by the time you hit £60,000. And for households with two children, where one earns £60,000 a year this is the equivalent of a 4.5% pay cut.
The cuts are so unfair in this climate where we’re all struggling to get by for a whole host of reasons including the fact that a couple together can earn around £90,000 (£45k each) and still be entitled to the complete child benefit, while a family £30,000 poorer will lose it completely.
For me it seems ridiculous and also incredibly unfair that the government are not assessing household income as a whole. £60k may seem like a dream wage but if you’re the only earner in a family of four, paying a mortgage/rent, income tax of around £2,500 a month and council tax, the loss is huge.
And let’s face it not all single income households are single income by choice. At the moment I know plenty of parents desperately searching for work and desperately needing their child benefit to pay for weekly shops and clothes for their kids. The loss will be felt whether George Osborne and his motley crew choose to believe this or not!
How do you feel about the changes to child benefit? Will you be losing out? Let us know.