New year, new start – but it might not be one all of the country is looking forward to. From the 7th January 2013 all households where one parent earns over £50k will see child benefit cut and for those where one parent earns over £60k, child benefit will be cut completely.
Changes to child benefit
Whilst I, and I’m sure, most of the nation appreciate our Government is doing their best to get us out of a recession, it’s hard not to question decisions such as this which will really hit households hard.
Through my work at ClearDebt I speak with so many families who are already stretching their pennies as much as possible and I can’t help but wonder how they will manage when the new cuts come in.
It strikes me that before long, new policies will introduce a society where the low income families continue to be supported with benefits, the high income households continue without but manage to live accordingly, and the middle earners become the most affected – earning decent salaries but punished by a cut of benefits which they still rely on – no matter what the government think.
I wonder, and wonder if you do too, if George Osborne has really considered the full impact of their changes to family dynamics?
See here, what other people are saying on twitter about this!
How will the child benefit changes affect me?
According to Price Waterhouse Cooper, one of the most shocking implications is that for families with three children or more, by the time the children reach 18, this will equate to a cut of benefits of around £50,000!
Other areas of impact from this new change means the following for many parents now juggling their finances to cope with the cost of bringing up children:
• Where one parent earns over £50k child benefit will be cut.
• Where one parent earns over £60k, child benefit will be cut completely.
• The changes will expect parents to be open regarding how much each earns.
• If one parent does choose to claim child benefit, notwithstanding the high earnings of the other, the other will be taxed at higher rate – could be a particular problem for divorced parents!
• Stay at home mums may have to return to work
So are these proposed child benefit changes fair?
My feelings are the Chancellor needs to look elsewhere to achieve his expenditure cuts. Receipt of child benefit is an established institution to all classes of recipient for different reasons.
The bottom line is middle class families will have to bear the brunt of the proposal and make sacrifices. The rich will manage without it and the less well-off will be unaffected.
How will the child benefit changes affect you and your family? Do you think the proposed changes are fair?