As child benefit reforms come into effect today, four mums say the move is another blow to hard-working families.
The ‘squeezed middle’ is set to rebel against controversial changes to child benefit, which they claim effectively axes the payment for some families.
From today, child benefit which was previously a right for all families whatever their income, will be means tested.
Middle-income families have claimed the way in which the benefit is being implemented is unfair, and they will lose thousands of pounds a year for their children.
The move means child benefit paid to parents, one of whom earns at least £50,000 will be taxed. Affected families also have the choice to opt out of receiving the payment for their children. And while families with one high earner will lose out on the benefit, others with a similar income but both parents under the threshold will not.
HMRC has said about 1.1m UK families will be hit, and 70% of those will lose all child benefit.
The average loss will be roughly £1,300 a year — a considerable chunk of the annual £1,752 paid to a family with two children.
The High Income Child Benefit Charge will kick in when someone's taxable income is at least £50,000 and will be 1% of the amount of child benefit for each £100 of income between £50k and £60k.
We caught up with families who feel they are being penalised for working hard to provide for their family.
The single mum who uses benefit for childcare
Bernadette Doyle (42) is managing director of Client Magnets. She lives with her two sons Benan, six and four-year-old JJ. She says:
I will forgo receiving child benefit from today rather than pay tax. I do have a very strong opinion on this as it is the only benefit I have ever received. When I was at university my friends signed on, but I wasn't entitled too. I provide everything for my children and to me child benefit was the only thing I have ever received in the form of financial help. I used the money towards paying for child care, and what I spend on this would make most people’s eyes water. Although that is my choice and I consider child care an investment so I can run my business and make money for my family. Nonetheless, I don't get any tax relief on what I spend on child care.
I know, though, that I am very fortunate and am lucky with my business which is pretty much recession-proof.
The people I feel sorry for are working couples who really will miss that money. When two people are both working hard and trying to secure their children's future, child benefit is probably the only thing that they receive and they count on every penny. This will affect their standard of living.
What is happening with benefits it that the people who are working the hardest are being penalised.
I think if you are a parent you should receive child benefit regardless of your income or status.
I always used the money to benefit my children in one way or another.
The solicitor who feels her family has no choice but to opt out
Lesley Mulligan (34), a solicitor, lives in Portadown with her husband, Richard (45), and their three children, Jackson (5), Harrison (4) and Avelene (2). She says:
We have no choice but to opt out of receiving child benefit because of the changes. I had been using the benefit to pay for the children's activities, such as swimming, gymnastics and rugby tots. Now we will just pay for these things out of our salaries.
As a family we are now down £5,000 a year with one of our salaries just over the limit, and the other's salary under it.
I do think it is unfair to means test child benefit in this way because we are not making that much money over the threshold. I believe the Government should rethink this move as technically we are not earning much more than a couple who earn £45,000 each and would still be entitled to child benefit without incurring a tax bill. They will get it, and we won't — it is definitely unfair.
I think child benefit should be a right for all parents.
It doesn't affect low income families or the super-rich who I feel really don't need it as much as middle-income families. We are the ‘squeezed middle’ who are fighting to make ends meet, and this is another blow to us.
We are pretty much at the limit, after tax we would receive £200 to £300 a year for three children, so we'd rather not get it at all, then we know we don't owe anything.”
The working parents who count the cost
Jason (42) and Brenda Shankey (41) live in Belfast with their two |children Laren (11) and Will (10). They run Jason Shankey |Male Grooming in Victoria Square and Ballyhackamore, Belfast, as well as jasonshankey.com. She says:
I believe your salary is based on how hard you work, and with a small business in particular, it seems to me the government is asking us to pay more and more for tax and VAT than to ourselves.
I feel that everything that I earn, that I work hard for, I’m giving to the government. I also think child benefit should be paid to all parents and there shouldn’t be any difference made about who gets it.
Working parents have more costs in terms of childcare, and we all work hard for everything that we get.
And I find it unfair that the government keeps taking away that money. At the minute every penny counts to everybody.
The working mum who’ll feel the pinch
Vicki Caddy (40) a freelance PR consultant lives in Belfast with her doctor husband Grant (40) and their four children Rory (14), Elliott (12) Saya, (9) and Romy, (7). She says:
We have four children under the age of 18 and had been receiving £225 a month in child benefit which is quite a significant amount of money to lose.
We have decided to opt out of receiving it anymore because of the reform. I’m not pleading poverty as we are very fortunate to have my husband’s salary coming in. Nonetheless paying for four children is expensive. I didn’t use the money for essentials nor did I have £225 spare every month going into a saving account. I used the money to pay for extras for the children such as music lessons and dance classes.
Had this come in in August when I was buying uniforms, specialist sports kit and PE things for the children I would have really noticed it — it is definitely important to me.
I think all parents should be entitled to child benefit and this money should not be taxed no matter what they earn.
From now on there will be a lot more stretching of money for the children’s extras, things like pocket money, bus fares — just their daily expenses, and when they want to go out with their friends.”
Child benefit: the changes
- Child benefit is administered by Her Majesty’s Revenue and Customs (HMRC). From April 2010, £20.30 per week was paid for the first child (including the eldest of a multiple birth) and £13.40 per week for each other child. Until today, these amounts were paid without reference to earnings or savings
- More than 80% of children are in families also eligible for means-tested child tax credit
- The reform has been met with a barrage of criticism from families. The HMRC was also accused of failing to notify 300,000 UK families prior to the changes
- Under the government move, the High Income Child Benefit will come into effect when someone’s taxable income is at least £50,000
- Those earning £60,000 or more will face a charge equal to the total amount of child benefit, so will effectively receive nothing
- HMRC says there were over one million hits on its website before the benefit changes with 100,000 uses of the online calculator