Dawlish Discussion

As per Roberta's request on another thread, here's some info on what's going on re Child Benefit. There was quite a bit about all this on the tv last night and here is a link which I've quite deliberately taken from the The Telegraph (it being a tory supporting newspaper - wouldn't want to be accused of any left wing biase would I? Perish the thought!).

http://www.telegraph.co.uk/news/politics/9124950/Families-in-child-benefit-threat-need-a-pay-cut.html

Seems to be two issues here:

1. Should those paying higher rate income tax get child benefit?

and

2. How is it fair that under the present proposals a single person earning say, £50,000 should not be eligible for CB but a couple both earning £35,000 each would be eligible?

Will be interesting to see how this is resolved.

and this is from The Mail

http://www.dailymail.co.uk/news/article-2110724/Coalition-disarray-child-benefit-cuts.html

Child Benefit, in my view, should be universally available to all mothers in recognition of the work they do in the home and in bringing up families. There is much evidence to show that some mothers, even in the wealthiest households, do not have equal , and in many cases, no access to resources and that child benefit is often their ONLY income. It has been shown empirically that the work involved in child rearing and in running a household is not shared equally with male partners and its only fair that women's contribution to the nation, and to individual children and male partners, is recognised and women are compensated in some small way for their WORK. Child benefit is a feminist issue and any attempt to prevent women accessing what is morally theirs for the benefit of their family is OUTRAGEOUS.

Libby that makes some sense, however I have a male friend that is bring up young children on his own and works full time.

Obviously not a feminist issue at all.

With repect 007 I disagree - its otally a feminist issue - am tired of having to express amazement and gratitude to the very few men bringing up children alone and working full time - big deal and bully for them - women have done this forever - often overlooked by census enumerators and policy makers (and we wont even mention employers!). It is unarguable that the vast vast majority of childrearing and housework is done by women and Child benefit, and access to it, should reflect that. You cannot airbrush out women's contribution (which is empirical, surely a male way of knowing!) with anecdotal stories about the odd male doing what women have always done.

I think it would be best to just scrap this benefit and increase the tax threshold to something that resembles the cost of living.

I would like to see :-

1) Increase the tax and NI threshold to 12K or what you would earn on the minimum wage working full time.

2) Merge NI and tax and have a fixed tax rate of say 45% for everyone.

3) Stop taking tax off people and then giving it back to them as tax credits.

... and you certainly can't dismiss men's contribution either. My husband took 4 years off to look after our son and he received the child benefit - are you saying he shouldn't be allowed to as he's a man? I don't ask for you to be amazed or grateful, that's just downright patronising. My husband still has an equal role in childcare as do the majority of his friends who have children - hey guess what we work as a team.

Am I correct in thinking that if a couple get child benefit then that is paid to the main child carer (usually, but not always, a woman) and that if the couple can also claim tax credit of some kind (working tax credit and child tax credit) then the main child carer also gets that tax credit paid to them?

Or is the tax credit somehow split between the two of them?

Whatever, what I'm getting at is this. That whilst I see the logical argument for stopping taking tax off people with one hand but giving it back to them with another in the form of tax credits, would it be the case that whilst such a system would see the main or sole earner having more money (because paying less tax) that extra money though would not necessarily find its way to the main child carer?

To give an example. I know a couple who have two children. The child benefit is paid to the mother. The father is the sole earner. The father's earnings are such that the couple can claim tax credits. They have often noted that what he pays in tax goes back to them, more or less, in tax credits.

What she gets from CB and the tax credit however is just enough for her to get by. But, if the tax the father pays were to be reduced because the tax credit system no longer existed will he give her his tax 'savings'? There is no guarantee of that, is there?

Congratulations to you and your husband Flo- and your friends - thats exactly how it should be but mostly isnt. I dont think anything I have suggested has dismissed men's contribution because I wasn't talking about men - I was referring to WOMEN and the money they (in my view, as I've already said) should receive to recognize their role as primary carers. You can give me anecdotes all day about how wonderful individual men are but THE EVIDENCE is that the vast majority of women undertake, and are expected to undertake, a greater role than their male partners in the private sphere (i.e. the home). (There is also much evidence to support the fact that for many many women the home is not a safe place for either them or their children. Its always seems a pity to me that there are smug women out there who choose not to recognize this and blame the victims but, hey ho, maybe this is another subject for another day).

@Lynne - i dont know about the tax system but if a woman is on income support her child benefit is deducted from her total weekly amount and, therefore, does not augment her income and, for her, is not a benefit of any value. that seems to me to be unjust and is another example of how the benefit system in this country does not prevent women and children from falling into poverty.

Libby,

Thanks for letting me know about CB and how it is deducted from Income Support. I had no idea that happened.

Still, not to worry though, 'cos we all know she'll nontheless be living a life of luxury on all those other state hand outs she's no doubt getting. (I say that extremely sarcastically by the way).

Child benefit doesn't count as income with regard to other benefits.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ChildBenefitandChildTrustFund/Childbenefits/Paymentsandentitlements/Benefitsforparents/DG_073790

@Lynne

Of course!!!

Once again we seem to have moved away from the first post. The stopping of CB for those on higher tax. If I were lucky enough to earn enough to pay the higher rate I would not be poor, and therefore not need CB. If my wife, or partner, voluntarily choose to not work why should we complain, if other wives do work and pay tax receive CB.

As for those on low income there are other benefits that they can claim. At over 42K no one NEEDS child benefit from the taxes of others

So, if as you say that "at over 42k no-one needs child benefit from the taxes of others" because those earning that amount wouldn't be poor, then doesn't it follow that couples who between them earn that amount or more also don't need CB?

I'm not saying that's what I would advocate - just that it's how I see your argument could be developed.

Since couples ( married or otherwise) are no longer taxed as one unit as they used to be, there is no option but to use single persons tax levels. There has to be a cut off point somewhere. It is not possible to calculate a couples income with today´s tax system.

Mmmmm.....wouldn't be yet another government proposal would it that wasn't totally thought through before it was announced?

If the government is going to give child benefit to parents / guardians / carers then what has it got to do with their gender?

However I agree with SteveJ. Why tax people then give it back? Just seems silly to me.

thank you Lynne

Child benefit is one of the most powerful positive elements in the UK tax and benefits system and should be strengthened as much as possible. Child benefit is basically the same as a tax allowance in that if you up tax allowances by £100 then you are giving people £20 each. However, there are essential differences which mean that child benefit should be extended and tax allowances lowered:

1. Child benefit means less net tax is taken from us at the time of life we are having children (if we do) and more when we are not, which is a good idea given the UK's current ranking in international quality of childhood tables, and improves our quality of life that we're paying more when we can afford more. If a response to this point is 'why can't people pay for their own children' - then we have well established principles in that nobody seems to mind about everyone's tax paying for schools - and anyway we are paying, just in a phased way across life that's beneficial for everyone.

2. Child benefit goes to the main care giver in the family, which might not matter much in some families but in lots of situations it absolutely does.

3. Overall, child benefit reduces the huge discrepancy in income between women and men.

4. Child benefit, unlike tax allowances, of course goes also to those who earn less then the lower tax threshold - who need it most and whose children benefit most.

5. Lower tax thresholds to fund higher child benefit are good in they get more people paying tax but reducing child poverty at the same time. It's desirable for as many of the electorate as possible to have a vested interest in what the tax rate is, isn't it?

6. For those on income support, higher child benefit would mean less means tested support, as the overall total stays the same subject to cost of living rises. This also weakens the poverty trap, as anyone who got a job/better job which took them out of benefits still keeps the child benefit element.

7. Universal child benefit is very cheap to run as there is no bureaucratic means testing and no perverse results to deal with. The recent higher rate tax unfairness issue could be solved for example by dropping the higher rate tax threshold by a certain amount and give people the child benefit back. This would not be equal on an individual basis as it depends upon how many children or any, and so there would be winners and losers in a reasonably fair way, unlike the completely unfair current policy where two parents with a much higher income still get it etc.

All of these points make an overwhelming case for raising child benefits when we can and reducing tax thresholds when we need to. It would take a courageous government to take this to its logical conclusion and completely restructure tax and benefits in favour of this far more beneficial and effective model.

So in your words, it is a tax on childless couples

And given the problems being caused in this country (and the world) by overpopulation and general overcrowding, is it a good idea for the tax system to reward people for breeding? Should we not be considering disincentives to breed?

Just wondering where the "I don't have kids therefore why should I be taxed to help support someone else's kids" argument might logically lead.

What about "I don't have kids therefore why should I be taxed to help provide state schooling?" And a variation on that might be ""Although I have kids I am rich enough to pay for them to be privately educated and receive private health care. Therefore why should I pay tax to help pay for someone else, who is poorer than me, have their kids educated/health looked after?"

Just saying.......

Get rid of child benefit. Reduce the tax people pay.

With the extra money parents/guardians can spend it on their own children.

Far fairer on everyone.

If you want to bring kids into this world then be prepared to pay for them out your own pocket, don't expect others to subsidise you.

@burneside: are you saying that unless people have the wherewithall to pay privately for education, health and other costs associated with having children that they shouldn't have them? or are you just talking about cb?

I'm talking about child benefit, I don't see why people should be "rewarded" just for having kids.

Not sure what the "reward" is for having kids. Estimated life-time cost of having a child is these days probably around the £80-100,000 mark once you take into account things like the need for larger house, car, food, clothing, holidays etc etc. So anyone having a kid is not undertaking that decision lightly. The relationship of tax to child benefit is a difficulkt one because the cost of a child is basically a fixed cost (in a business model) whereas a cut in tax rate is a "marginal benefit" - so higher rate tax payers could probably cover the cost of a child through a cut in their tax rate whereas low-income families would not be able to.

Without kids the human race would die out, simple as that. So perhaps people should be penalised for NOT having kids!!!!

And don't forget the loss of earnings for the main chilld carer if s/he (but usually she) either stays at home full time or goes back to work part-time. And then from that drop in (paid) work there is the knock on effect in terms of pension entitlement. (and I'm not talking NI contributions/State Pension).

And don't forget the loss of earnings for the main chilld carer if s/he (but usually she) either stays at home full time or goes back to work part-time. And then from that drop in (paid) work there is the knock on effect in terms of pension entitlement. (and I'm not talking NI contributions/State Pension).

If people can't afford to have children, or are not prepared to put up with the financial hardship, then just don't have any. I don't see why the state should subsidise people who choose to have kids.

As I understand it the person who receives the CB also gets NI contributions credited to them which goes towards their state pension entitlement.

If we were to remove CB would you also argue that the main child carere should not have these NI contributions credited to them?

Some might say that once a child reaches school age, then the NI contributions should stop, as their argument would be that the CB recipient could be deemed as being available to work again? If they don't work after this time, then they might argue that the CB recipient shouldn't receive the NI contribution.

http://www.nidirect.gov.uk/how-claiming-child-benefit-can-protect-your-state-pension

Burneside. I second that.

I know a couple who never wanted, they enjoy their life going places whenever they want, no ties or to contend with the 'like' of demanding teenager kids of today.

Perhaps pay those who dont have em! lol.

And should that couple ever get old and be in need of help from the state like needing medical treatment for example then who will be funding their 'free' medical treatment? Why, the taxes paid by those who were once children.

Just trying to make the point that if we don't have kids who then grow into adults then we could end up with not enough adults paying enough taxes to fund the needs of an ageing population - which is what I understand we have in this country.

Should we perhaps start another thread on the benefits that the elderly (let's say those of state retirement age) get and whether or not they should be entitled to them and why they are seemingly exempt the from welfare cuts unlike other age groups in this country?

Having paid over £250,000 income tax and over £90,000 NI during the 40-year working life of the average child-free couple, I would think that said couple would expect that they've paid enough direct taxes to fund their medical treatment in their old age. Having also paid over £101,000 VAT and over £64,000 Council Tax, this average child-free couple would perhaps be entitled to say that they've done their bit.

But, as I understand how the system works, it isn't how much any of us pay in over a life time that funds what we get in our old age but rather the tax receipts of those who are presently working/paying taxes .

So, all that money that you refer to above wasn't put to oneside for that couple's needs in retirement it was spent by the government (of whatever political hue) on other things at the time that the couple paid all those taxes.

And another aspect is this. If, as seems the case, that you are saying that they deserve whatever they are entitled to in old age because of what they paid as taxes when they were working, then what about those who didn't/couldn't pay as much in. Are we to have the deserving retired and undeserving retired a bit like the concept of the deserving and undeserving poor?

Not at all, I'm trying to look at it from all angles. The proposition I was alluding to was why should people who are available to get a job and therefore available to pay direct taxes like NI, have their NI paid for them, at the expense of those that dutifully pay their NI through their employee contribution? By the way, I do understand that it's an interesting subject that can cause a wide range of conflicting opinions, and find it pleasing that a discussion can be had about it on here.

I think I might start a separate thread about the elderly and benefits etc but I'll do so after tomorrow's budget just in case there is anything of direct relevance to the elderly in it.

@Lynne

Nobody mentioned the concept of deserving/undeserving retired until you did. Not sure it would enter most people's heads.

Just because nobody mentioned it doesn't mean that it hadn't entered other people's heads. But if, as you say it hadn't, then it may well have done so now.

"Are all the retired equally deserving or are some more deserving than others?"

Sounds like a good topic for debate to me. But really should go on a thread of its own don't you think?

Along with " Should those of state pension age be exempt from any benefit cuts?"

and

"Should all those of state pension age, irrespective of how rich they are, receive universal benefits given that CB is to now cease being a universal benefit for those who pay the higher rate of tax?"

Well now, there you go, three topics for debate concerning the retired (but to be debated on a different thread I think).

bored.com

interested.co.uk

@Brazilnut -then don't participate.

Simples.

I think this is one of the most interesting and best conducted threads I have seen on Dawlish.com with a wide variety of views presented constructively and without abuse.

@Don - agreed

@Lynne - issue of the retired/elderly is very similar and a separate thread would be interesting

There'll always be opposing views on child benefit and similar such state "benefits" because people all have different underlying perceptions about "self" and "society".

If we start from the premise that a couple who have children are actually providing a benefit to society then you get a different picture. Why are they providing? - because it's their children who will keep society going, who provide the future economy, who do the building, who produce the food, who care for the increasingly aging population etc. etc.

What is this worth?

Let's do some simple maths. Thanks Nelson for some starting figures. From Nelson's figures it looks like the average child-free couple is contributing about £400,000 in tax during their working life-time.

I don't know the equivalent figures for a couple with children but let's assume conservatively that that couple would be the same for half the working life-time (i.e. 20 years when they don't have children) and contribute only 50% of the tax (i.e. one salary) during the child-raising years. Then their tax contribution would be £300,000.

Meanwhile that same couple is contributing approx £100,000 per child (after tax) say (i.e. if we didn't have parents that would be the cost to the state of raising those children). So for the average 2-child family that would be £200,000

So a 2-child family is contributing £500,000 to society whereas a child-free couple is only contributing £400,000

So if we are going to treat everyone equitably then a child-free couple should be paying £100,000 more tax over its working lifetime - or about £2500 MORE tax per year - and that's a conservative estimate.

Not a good political message is it? So instead, the state provides a compensatory "benefit" for children - which for a 2-child couple is only about £1500 a year - or still £1000 LESS than the benefit a child-free couple notionally gets through their reduced contribution to society!!!

@wondering

just to backtrack a bit - and just as a matter of interest, who do your childless friends think fly the airoplanes that take them places, clean the hotel rooms they stay in, serve in the restaurants they eat in, empty their dustbins, nurse them in hospital, and will eventually put them in their coffins and bury them are? i suggest these will be other people's children. personally i think if you don't want children don't have them but that shouldn't absolve you from sharing some of the responsibility for helping to pay for them and invest in the country's future. @Lynne has already mentioned the problems we will face in the future without enough 'children' to pay taxes to support an ageing population - but further to that is the the enormous problem we will have of not having enough people to do any work at all.

@neilh - great argument!

This country (and planet) is bursting at the seams, it's laughable that some people think we could have a problem with under-population in the future.

here in the uk we are not replacing our population so what is your solution then @burneside?

You are seriously saying the population of the UK is decreasing? I suggest you look at past census figures.

Libby didn't say the population is decreasing burneside, what she said was that the UK is not replacing its population. The population increase has little to do with number of births from people who were themselves in turn born in the UK.

Think about it in family generations - in my own family you don't have to go back many generations to see it as normal for there to be 6-8 and sometimes more children per family group and very few people had no children at all, in this generation in my own family (and I am one of four children, born to parents who had no siblings so that sort of evens out I guess) 2 of us have had 2 children each, 1 has had one child and the other has no children, so in my generation that is 4 children plus partners, 8 people, in the next generation down that is 5 children from those 8 people, a reduction!

The census figures of course have to take into account that people are living longer so there are more of those older generations around where there were more children born per family unit, plus net migration which is what is really increasing our population considerably. But in the great scheme of the universe, what happens in the UK is small potatoes compared to some other countries and their population increases.

Whichever way you look at it the population of the UK is increasing, some would say alarmingly, I don't think there is ever going to be a shortage of people to do the jobs that Libby mentioned.

@neilh. that was a well thought out response, however do not families with children receive more than just cb from state funds? i'm thinking of the additional costs from child healthcare and education as probably being the two greatest costs that child-free couples do not the burden the state with. by the way, i'm not advocating private education or healthcare!

@Nelson. agreed there are other benefits such as tax credit etc. however the figures i was playing with are conservative.

Let's go to the extreme for example and assume that the state, not parents, looked after all children. The cost of raising a child in residential care is let's say £30,000 - £40,000 a year (I'm guessing because I don't know that particular stat but I do know that's approx the cost for elderly care). So if the state were to raise children the pre-working life cost (say 18 years) would be of the order of £500,000 - £700,000 per child!! So the state is effectively saving £400-600,000 (or £22-26000 per annum) by treating parents as a "free" resource for the state and not paying them a salary. If we throw that into the equation as well then any additional "benefits" parents might receive is insignificant.

@burneside. if we ignore immigration then 3 things are happening to population in the uk (in common with most, if not all, developed countries):

1. Population is becoming increasingly elderly - and, in economic terms, non-productive or non-contributory;

2. Working (or "contributory") population is decreasing as a percentage of total population - and it's working population which is key to the economy of the country and to providing the services required to support the increasing elderly population

3. Birth rates are declining which in turn will exacerbate point (2)

These lead to a declining population which can not sustain itself unless the working-base population is maintained at an appropriate level (whatever that may be) - which means children!

I should say by the way that social economics is a minefield!!

@neilh

You cannot ignore a major contribution to the rising UK population: immigration. That has a bearing on the rest of your response to me. I would also say that the elderly are not non-contribututors, my pensioner mother pays income tax and spends money in the town, how is that non-contributory?

@burneside - your mother is non contributory because she is non productive. social economics is not only a minefield (as neilh says) but also doesn't have a soul. and is your mother, without wishing to disregard/dismiss her past productive contribution (to society), nursing (for example) other people's parents - which is what would have to happen if we don't have enough 'children' to do this work? the less elderly would then have to look after the more elderly......

Immigration introduces a different dimension and if you are happy to accept immigrants to do much needed work, (and, sadly our history suggests not - just think about whats happened to the Caribbean communities - once welcomed and now regularly vilified and, more recently, the Polish communities in East Anglia who pick their produce, also regularly vilified by locals as 'taking our jobs' and other such, in my view, rubbish) - then OK, its a solution. However, this solution is likely to bring huge social problems in its wake...

@burneside. you're right, i have ignored immigration but becuase it just introduces a whole host of other social issues not directly related to the child benefit thread. just so that i'm clear though, is what you're saying that we shouldn't support our own children but rely on increased immigration instead to bail the country out of its future social economic crisis? it's a valid solution but would it be acceptable?

It's a shame child benefit wasn't cancelled in the budget. If you can't afford kids do not have them in the first place.

Overheard a girl about aged 18 last week, ..saying 'its ok I got a kid so I get everything paid its better than work!'

Just putting to oneside for the moment the social and economic reasons given above for why we need to have kids and thus, some would argue why we need to have CB, can you imagine the political furore if CB were to be cancelled en masse?

I am also intrigued to know how the "if you can't afford to have kids do not have them in the first place" policy would be enforced. Who would decide who should have kids and who should not|? Would we have enforced sterilisations, enforced abortions? And what about those children born to those whom it had been deemed (based on what criteria and by whom?) shouldn't have them. Would those kids be strangled at birth? Or would the state look after them? And if the state, just how much would that cost? (see one of neilh's postings above for an idea of how much that might be).

Oh yeah I forgot to mentionthis scenario. Let's say people have kids because it has been deemed that they can afford to have them.

What happens then if that family income drops to a level that they now can't afford to have them due to death of a partner, divorce, loss of job/business. You know, the type of thing that can, and does, happen to many of us.

What would happen then to these kids in a "you may only have kids if you can afford them" society?

the workhouse @Lynne??? since everything i have read on here leads me to think that you and i probably have similar views about these issues, there is no point in me taking up your baton and running with it ! however, it would be interesting to have a different point of view expressed to debate........anyone???

If, and it is a big if, CB was to be stopped it could not be done retrospectively. It could be announced tomorrow that it will cease for all new babbies in 9 months time.

As for one parent dying or loosing their job....we would still have a benefit system so what is the problem.

Not necessarily my view, but it adds to the discussion

"If you can't afford kids do not have them in the first place."

I did not mean people should be forced not to have kids. I was just saying only have kids if you can pay for them. Otherwise you're relaying on others to pay for YOUR kids.

We seem to be going round in circles. See my post above: "If we start from the premise that a couple who have children are actually providing a benefit to society then you get a different picture. Why are they providing? - because it's their children who will keep society going, who provide the future economy, who do the building, who produce the food, who care for the increasingly aging population etc. etc."

@Paul - it's today's kids who will be providing for you in the future.