Jaynehowarth’s Weblog

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Archive for October 2010

What’s the benefit for children?

with 11 comments

Child benefit is the sacred cow that has been slaughtered before our eyes.

I understand the need to make massive savings. The country is in the mire; we owe £900 billion and that is forecast to soar to £1.1 trillion by next year.

According to the UK Debt Bombshell , it is the equivalent of every man, woman and child paying back £15,213. UK pays £120 million debt interest every day to foreign governments.

That kind of debt is not sustainable. Everyone agrees that significant savings must be made across the board. Something has to give.

Getting rid of child benefit for high earners, those people earning over £44,000, is one idea.[picapp align=”right” wrap=”false” link=”term=george+osborne&iid=9913374″ src=”http://view2.picapp.com/pictures.photo/image/9913374/the-conservative-party/the-conservative-party.jpg?size=500&imageId=9913374″ width=”234″ height=”156″ /]

The Chancellor George Osborne, who before the election pledged to save child benefit, says it will save £1 billion a year.

While there are undoubtedly good arguments to scrapping a universal benefit for high earners – whatever they are (that depends, naturally, on whatever you earn. It’s probably £5,000-£10,000 more than what you are on) – the dichotomy comes with the mathematics.

In a one-income family, with the sole earner’s yearly salary at about £44,000, they lose their child benefit. For the oldest child in full-time education, that payment stands at £20.30 a week, with £13.40 a week subsequent youngsters. For that one-income family, it means losing £1,752.40 if there are two children in the family.

That’s a lot of money.

While some families may not even notice the money going into their bank accounts every month – see India Knight’s tweet about how she used her child benefit (she also tweeted that she didn’t claim it after 1998 when she returned to work) – for others, it is the difference between being able to keep the house warm in the winter; it is being able clothe their youngsters. It isn’t about paying for piano lessons.

But the real problem for the angry middle classes and Mumsnet and the like is the incredibly iniquitous decision to allow two parents who each earn just under the 40 per cent threshold (£40,000 each, say) to continue claiming child benefit.

How does that seem remotely reasonable? To many people, including Tory activists, high earners and those who will continue to receive child benefit when the changes come into effect in 2013, it is a monstrous policy.

Is the government sacrificing the simplicity of the system, by introducing a crude cut-off point without any regard for household income, for fairness?

All of this rather overshadowed Osborne’s next announcement to cap the amount of benefit any family can claim to £26,000. Of course, the comfy middle classes won’t be wringing their hands about that.

What next? What are the next elephants in the room to be sacrificed? Winter fuel allowance; pensioners’ bus passes; free TV licences for pensioners? More than likely. We are, as this government continues to say ad nauseam, all in this together. Unless you are super rich. Then that doesn’t apply, of course.

Written by CommonPeople

October 5, 2010 at 8:31 am