Child benefit cuts

Anyone else think this is all a big ploy to enable the chattering classes to vent their spleen on a tax change that will affect few who can easily cope with it?
Why announce it ahead of the big spending review? And surely he should have foreseen the anomaly of two-income households benefitting. If not, then he really is a moron... ah, yes, that explains all.
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On Wed, 06 Oct 2010 07:18:08 +0100, Tiddy Ogg

Everything you need to know: http://bit.ly/drGvf9
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I'd say an inexperienced amateur, in a guvmint which is making policy decisions "on the hoof".
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Gordon H
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On Wed, 6 Oct 2010 09:18:17 +0100, Gordon H

And nothing about the years credited to the state pension for non working mothers getting child benefit, which could be lost with the benefit. Who knows.
The ghost of GB and the law of unintended consequences which he invoked endlessly is wadering round Downing Street.
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On Wed, 06 Oct 2010 07:18:08 +0100, Tiddy Ogg

It's certainly got the BBC HYS nutters foaming in the mouth with delight - so it must be a bad idea.
There's not just the obvious flaw of the single/two income issue but the fact, if you are close to the limit, a small pay rise could see you much worse off. If they are going to do this thing then they should:
- Raise the income threshold. - Use the whole family income. - Have a graduated reduction in benefit.
A lot of people argue that it would be too expensive to administer this way but whole family income is already assessed for child tax credits so the system's already there. (Higher earners are already due to lose their tax credits so there's a double whammy there.)
I wouldn't mind betting that the scheme won't actually save any money owing to the extra admin either way.
But it's all alright since rich pensioners will still get their fuel allowance and vote tory.
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Mark wrote:

Should they be denied their state retirement pension too on that basis?
You see, the way I see it, the winter fuel allowance is really only part of the state pension, being paid on an age-related basis that is very similar. If it was just regarded as part of the state pension, and not called something different, there wouldn't be any fuss about it at all.
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On Wed, 6 Oct 2010 10:20:28 +0100, "Norman Wells"

What? I see your totally failed to spot the irony there.

The winter fuel allowance is nothing to do with the pension. It is a recent innovation and not funded by NI unlike the state pension.
Let me throw it back at you. Do you think that a rich pensioner who spends the winter abroad on holiday should receive the winter fuel allowance when a poorer family with young children do not get any help?
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Mark wrote:

State pension is not funded by NI. It's funded from the Big Pot. NI also feeds into the Big Pot, but I don't think it can feed in enough, especially given all the other things people seem to think NI is meant to fund, like unemployment benefits and the NHS.

I think so. Your comparison is a bit muddy because it co-mingles the comparison of rich and poor with that of pensioners and young families. It makes more sense to keep those comparisons separate. You do have a point with rich vs poor, but that boils down to whether the cost of administering means testing adds too much to the cost of the whole scheme. The comparison between pensioners and young families does, I think, justify favouring the pensioners, and this is because to them the cold is more than a mere discomfort, it is life threatening. Not a lot of yougsters die at home of hypothermia, but pensioners do. Pensioners' homes need to be warmer than homes of "normal" people.
If a pensioner chooses to keep warm in the winter by spending it in a warmer climate, that may well be quite cost efficient, given that he can then reduce the heating of his UK house to a minimum. He may not even need to be particularly rich to afford that holiday, given that it will be part-funded from savings in heating costs. You wouldn't deny pensioners an annual holiday, would you? It makes sense to take it in the winter than in the summer. If the WFA is supposed to help pensioners keep warm in winter, there's no reason to deny them it if they choose to keep warm in an unorthodox way.
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On Wed, 06 Oct 2010 11:37:58 +0100, Ronald Raygun

Then we've been lied to. One of the justifications for the current NI swindle is that it pays for state pensions.

I thought it was a good comparison ;-)

But if they are weathly enough then they can afford to pay their heating bills themselves.
When my youngest son was a small baby he was quite ill for a long time, the entire winter. I would hate to think what might have happened if we could not heat our house.

Yet many pensioners choose not to use their heating, despite being able to afford it.

I very much doubt that the cost savings would pay for a holiday!

If I can't afford a holiday I don't have one. I can't see why this should be different for anyone else.

I don't see why the taxpayer should subsidise anyone's holiday.
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Mark wrote:

We've been lied to? How unprecedented! :-)

Sure, but what next? If they're wealthy enough (in terms of having a very comfortable private pension), would you argue they should not need the basic state pension either?

If your baby had a need for heat, he could have cuddled up to mummy. More seriously, you could have just heated his room, and not needed to heat the entire house.

I didn't say it would. It would pay for part of it. The idea is to shift the holiday he would have taken in summer into the winter instead, which already makes it cheaper (being off peak) which means it can be a longer holiday than otherwise. The fuel cost savings would mean it could be longer still.

Nor do I, but even pensioners do generally have holidays.

But he already is subsidising a pensioner's whole cost of living, through the state pension. And you mustn't think of subsidising the holiday other than as indirectly subsiding the cost of staying warm.
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On 10/ 6/10 02:38 PM, Mark wrote:

Who told you that? I don't think it's been the case for years.
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wrote:

You can get NI credits towards the state pension without paying any NI.
You can be forced to pay NI but get no credits.
NI is charged as a percentage but the vast majority of NI benefits are flat rate, and even S2P is becoming flat rate.
NI is a tax, nothing more.
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On Wed, 6 Oct 2010 23:41:31 +0100, "Andy Pandy"

But they're still called NI credits which adds to the implication that NI pays for the state pension.

This is a different "class" of NI.

It seems it is nowadays. Although governments hide behind it being something different by promising no income tax rises but instead increase emloyee's NI, which amounts to the same thing as far as the employee is concerned -- less takehome pay.
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wrote:

So why does someone who doesn't pay NI get credits, if NI is "paying" for his pension?

No it isn't. The normal employee class 1. I've already said how in this thread (eg working part of the year).

Yup.
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Mark wrote:

I know that, but it would be much simpler, and far less divisive, if it were. Few would object to an extra £250 being added to the State Retirement Pension in lieu of the winter fuel allowance, and few would demand that it be paid only to the deserving poor. The truth of the matter is, because it's an age-related benefit and is payable to the same sector of society, adding it to the pension instead of paying it separately would hardly affect anyone significantly, would be much easier to administer, and we wouldn't be having this argument.

There is only any such objection because of what it's called and how it's paid. If it was incorporated into the pension, no-one would object, just as they don't object to the rest of the pension even if the pensioner spends the winter abroad.
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I would be in favour of increasing the basic pension and forget the headline perqs, even though I would pay slightly more tax on it, because it would benefit those totally dependent on the S.P. If only the increments hadn't been switched from average earnings to cost of living by Thatcher...
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writes

I had thought of that myself, but with a seasonal variation.
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Does it really cost a couple of thousand pounds a year to work out if a household should be getting a couple of thousand pounds a year benefit?
Perhaps they should be concentrating on efficiency in the admin system instead, if it takes hundreds of man-hours to work this out per family...
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The problem is that you will have to assess 100% of the claimants to find the 5% that are affected by the rule. This is why it costs so much.
Whilst the above is probably an overestimate of the actual cost, it is certainly more costly than moving the claim threshold up to say 60K.
Having said that, even the simple solution is going to be costly. How do you decide if someone is going to be a HR tax payer for the current year? Do you assess on previous year's earnings, wait until the year end and then claim back the over-paid CB or work it out weekly(!)?
And if the first, what happens if someone's income is substantially changed during the year (say they lose this job in Month 1?). Are they going to be stuck with no CB for the whole year? Is that fair!
Personally, I think it's an ill thought out mess. As a person disinterested in the actual change, it has left me with a very poor opinion of the Tory's ability to "do the right thing".
(and for those who shout "what would do instead then":
1) remove CB from over 16's. 2) tax it (in the hands of a "nominated" partner). 3) both of the above.
seems fair, under the current circumstances, simple and workable to me)
tim
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On Wed, 6 Oct 2010 12:42:19 +0100, "tim...."

I would certainly disagree with 1). Over 16s in full time education do not suddenly become cheaper.
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