Tories hit Child Benefit – and pensions

George Osborne has just announced that families in which one earner takes home more than £44k are to lose child benefit from 2013.

I’m a supporter of some benefits being universal, including Child Benefit, so I’m unhappy about this move. Coupled with the removal of Child Tax Credits from higher earners this is quite a financial hit if you are on the lower end of this earning spectrum.

It seems especially unfair that if the household has two earners who both take home just under the cut off they continue to receive the benefit.

One aspect that hasn’t been picked up by the press yet is that receiving Child Benefit maintains your National Insurance payments, therefore protecting your state pension. In a situation where one partner earns and the other stays at home this is likely to be a major blow.

At one point the Tories were talking about recognising marriage in the tax system with proposals that only benefitted you if one partner stayed home. And now this proposal which in contrast hurts many of those doing just that. It seems very messed up policy making if you ask me.

I’m glad to say that (with a little help from me) the blog world is slowing picking up on the potential impact on a stay at home parent’s pension. I wonder what the Tories will say in response.

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6 Responses to “Tories hit Child Benefit – and pensions”

  1. Michelle Twin Mum Says:

    Gosh that is scary isn’t it! Soon there will be nothign left…

    Mich x

  2. Paul Says:

    Hmm, seems to me that if you’re earning over £44k then child benefit is simply topping up savings and not providing the extra support that low income families need. As for the state pension, anyone earning this type of money doesn’t need to claim one. Imho this is exactly the type of cost saving to make.

    Just to be clear, it’s around £1,000 per year which is hardly enough to make a difference to those individuals concerned, but a significant sum when stopped from the 3m or so families it’s estimated to affect.

    Further more; the benefit system should be there to provide for basic human needs – shelter, food, warmth etc – having a child (or children) is a choice that doesn’t have to be made. Put simply; (and I doubt this sentiment will be well received) if you can’t afford a child, don’t have one.

    • jenmum Says:

      Thanks for commenting. I agree that these cuts aren’t going to have a devastating impact on families. Unlike, say, the looming cuts to Housing Benefit. And I definitely agree that higher earners need to contribute to clearing the deficit. But do that through the tax system, in a fair and clear cut way. I’d have no issue with the Coalition asking for 1p extra on income tax. But this mechanism hits families, mostly mothers, and in an unfair way. Why do we lose it when a richer dual income household keep theirs? The pension thing is what bothers me most though. The benefit of maintained National Insurance contributions goes to the unpaid parent. This hits your entitlement to a state pension and also your ability to claim job seekers allowance. In a perfect world where everyone paid into a work/private pension and there was no divorce or family breakdown it wouldn’t matter. But we don’t and so it does.

  3. Jane Says:

    The proposed cut is a regressive move against women and children. The cutting of the child trust fund and, now, the child benefit payments is setting an anti-family agenda.

  4. Paul Says:

    @Jenmum: I do agree that the dual income vs single income seems to be a strange move, and it is one which I would have trouble defending. I still personally believe the pensions aspect is a non issue. Family breakdowns do occur, but it is for these reasons that child maintenance exists. Remember; the child benefit allowance is not there to improve the living standards of the parent(s) but of the child(ren).

    @Jane: The child trust fund is another area I agree with cutting. £250 isn’t enough to single handedly provide a trust fund of any worth to a child, yet when given out to every child born in the country (it isn’t means tested) it costs the Government an estimated £500m per year.

  5. How did this blog do in 2010 « Jenmum's adventures in parenting Says:

    […] The busiest day of the year was October 4th with 163
    views. The most popular post that day was Tories hit Child Benefit
    – and pensions. […]

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