Monday 5 March 2012

Child Benefit Conundrum


“We’re all in this together” is possibly the favourite slogan of the current government (despite bankers getting massive bonuses in failing banks). It also seems a bit strange considering what the current government is doing with child benefit. I agree with their idea, but they only need to tweak the plan a little to make it better.

As a result of the shake-up a family with three children in which one of the partners is earning £42,756+ (so in the upper rate of tax) will lose all their £2,449 of child benefit. Whereas someone earning £1 less on £42,275 will keep all their child benefit, this seems extremely unfair but it would be difficult to do it any other way. The major problem is that, let’s say both partners are just under the threshold and have a combined income of £84,950 they will still keep the benefit. It would seem to me that it would be fairer to treat the couple as the one person and cut benefit if it they earned more than, say £50,000.

In a perfect system child benefit would not have to be cut, but unfortunately we are living in a debt filled world and some of that debt needs to go away. I do not agree with this government’s policy of savage cuts, especially the VAT at 20% and believe it is causing economic stagnation. But some cuts are necessary if we are to move away from this crisis.

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