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Family Allowance

That’s what they called it when my kids were small. Today it’s Child Benefit and it’s causing a hell of a stir in the UK, given the Government’s intention to remove it from people who are higher rate taxpayers. Sorry, but isn’t that a no-brainer? Isn’t a benefit system meant to underpin the needy in our society, rather than dole out cash to categories, regardless?

Categories: Uncategorized
  1. Kelman Chambers
    October 6, 2010 at 2:19 pm

    Sorry Quintin, but where they’ve mucked up is a duel income family, where both earn £40,000 will still receive it, whereas a single income family where one earns £45,000 will loose it.

    Sadly this is just another political “noise” with very little substance. They should really think things through before they come out with their nonsense.

    They WILL have to alter this proposal and base it on household income, much like they do with the tax credit system, or risk loosing all credibility.
    If they do sort it out, it makes sense…… but not as currently proposed.

    • October 6, 2010 at 3:31 pm

      I agree with almost all of that, Kelman. The dual income situation is a problem and so far the only excuse is that it would require a system of means testing to overcome it. ‘What’s wrong with means-testing?’ is my counter. I come back to my central premise, that benefits should be for those who need them, not doled out universally up to an income ceiling that’s pretty high at £45,000. Those who want child benefit should apply for it, and eligibility should not be based on tax bands, but joint income. If I wanted to be provocative (not that I’d dream of it!) I’d suggest that anyone who needs state child support, for the first child at least, on a single or joint salary of even the £40k you cite should be given compulsory domestic budgeting counselling. Dave-Nick are not alone in addressing this area. Currently, the parents of all new-borns in Spain receive a birth grant of €2500. That will be withdrawn at the end of this year by the socialist government of Zapatero. You can expect to see a Spanish record number of caesareans and induced births this December.

  2. Kelman Chambers
    October 6, 2010 at 6:07 pm

    Agree with that Quintin. My main gripe was the return to “soundbite” politics. I was really hopeful that a change of government might have meant and end to them, but…………….

    As for the level of income, a lot of it depends on whether it’s two incomes of £40,000 combined or one. A salary of £20,000 will produce just under £16,000 p.a. (therefore £32,000 combined) whereas a £40,000 salary would produce just under £30,000 net. A product of our pointlessly complex tax regime. And that’s before allowing for pension contributions.

    Going on from your means testing point, it could easily be done on a net monthly amount per couple.

    • October 6, 2010 at 6:20 pm

      When you have one Cabinet and two party conferences, soundbite politics will never die. In any event, they never will, not now. The media won’t let them.

      What is means testing anyway? Application form, one or two P60s as appropriate. and a decision will be straightforward. Is that means testing? If so, what’s wrong with that?

  3. Kelman Chambers
    October 6, 2010 at 10:36 pm

    That’s what means testing should be, but as soon as HMRC or any other civil service dept. get involved, they manage to add several conditions and caveats.

  4. Kelman Chambers
    October 7, 2010 at 8:52 am

    Hmmm, more inclined to believe that the civil servants are not really servants. The person you speak to in “centre 1” may be, but the senior ones are the people who draw up the ever more complex tax and benefit rules.

    Domicile, residence, deemed domicile, non-dom and somewhere in the region of 40 taxes……..

    Still, it keeps me in a job. (and buying books!) 🙂

    • October 7, 2010 at 9:46 am

      I have a rule. I never speak to them. I let my tax adviser do that.

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