Belfast Telegraph

Wednesday 30 July 2014

Why parents face a taxing time over new child benefit system

Over the next few days families with children are to receive letters "explaining" the new rules on claiming child benefit - a process that has been made so complex it would be easier to get your head around particle physics. Why is it that the one thing politicians never seem to be able to do is simplicity?

Why is it that they have to make things so complicated that parents who already deal with more paperwork in a week than the Home Secretary now have to weigh up whether to claim money and then pay back to the taxman or to forego the benefit?

And what of the poor taxman (I know - I can't believe I've just written those words either)?

Tax offices are already under extreme pressure with resources strained to bursting point.

Now they will have to deal with the fallout from a "new, improved" child benefit system which will involve many tiers and doubtless many tears.

How it works is that you won't get any at all if one parent earns more than £60,000. However if both parents between them earn over £60, 000 you would seem to be in with a shout of something. Don't take this as gospel, however. I'm as confused as the next punter. There will be a sliding scale of means testing for those who earn between £50,000 and £60,000 a year. And if affected, you may have to self-assess for the aforementioned taxman.

The Government hopes to save almost £2bn via this new system, which is good news so long as this money isn't then redirected into helplines and advice sheets to assist people flummoxed by it all. But should one of the very few universal credits be removed in the first place anyway?

Most of us would feel that the likes of, say, the multi, multi-millionaire JK Rowling has no need of child benefit - although she is fully entitled to claim (I doubt she does). And she's not the only one. There are many, many more, less high-profile, extremely wealthy parents who don't need the money, but who are entitled to it. Critics claim this makes a nonsense of the current system.

It's hard to argue that point.

But in a family where a single salary of just over the necessary £60,000 is coming in and there are say, four children, the loss of the benefit may be more keenly felt than Well-Heeled of Westminster supposes. One of the glories of the old system was that it was simple (ie cheaper to run) and that it gave something to those who didn't qualify for any other benefit during those years when they needed it most - when the children were growing.

For many families it has been a vital crutch. This time round the bar for qualifying for child benefit is set at under £60,000. Next time? £50,000? £40,000?

They've already established the principle. In future they'll just be talking terms. Meantime, countless households will be expected to grapple with the complexity of it all. Child benefit doesn't have to be taxing? You wanna bet?

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