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Wealthier families to lose child tax credits
Date published: 02 August 2010
More than 5,000 middle-class families across Oldham are set lose almost all of their child tax credits worth hundreds of pounds each year.
The benefit is paid on a sliding scale for families with incomes of up to £58,000 — or £66,000 for those with a child under one.
But under Coalition plans, families earning more than £40,000 will have their payments stopped in April, 2011. The following year those earning more than £30,000 will also receive nothing and those earning £25,000 will see the allowance cut to £460 a year. The Government claims people with more than one child will still be given some money but no figures have been released.
Currently, couples with a combined income on the higher end of the threshold are paid £545 a year and those on lower incomes are also entitled to £2,300 a year per child.
The child element is then gradually tapered dependent on income. New figures show 1,200 families in the parliamentary constituency of Oldham East and Saddleworth and 800 in Oldham West and Royton earn more than £40,000 and will lose their tax credits from April. In addition, 900 families will be affected in Ashton, which includes Hollinwood and Failsworth.
A further 1,700 families in Oldham East and 1,300 in Oldham West will lose out from April, 2012, in addition to a 1,600 in Ashton.
The benefit was one of Gordon Brown’s principal policies as Chancellor, and 90 per cent of families currently have some entitlement at a cost of £20.7 billion a year.
Shadow work and pensions secretary Yvette Cooper said: “Cutting child tax credit for families with a joint income of £30,000 or £40,000 a year will hit a lot of parents who already find themselves overstretched.
“That help makes a particular difference to working mothers and in many cases is what helps them afford to work part-time.”
Comments
I wonder how this will impact on child minders and pre-school nurseries. It's easy to make the assumption that recipients in the £40K - £58K income bracket didn't need this support but if it provided knock on employment for others in the borough it could have an indirect impact on the less well paid. And if it forces a working wife to give up her job, it puts a completely different perspective on the income of that family. Ain't as easy as you'd think.
About time the rich lost out on something, Anyone who earns between 50 - 60000 doesn't need any help.
jwithers, I wonder if you have the first clue how much money job seekers allowance actually is? I have a friend just made redundant, and he's been stunned at how little he's getting. Even the Liebor government acknowledged it's insufficient to live on.
There are over 1 million fake assylum seekers in this country who should not be here, they receive more in benefits than those who work. Perhaps you should look to those before picking on those who have worked, and get very little?
Like pensioners Flake ? If you can't afford children, don't have them.£40K a year isn't poor! I chose to have 4 children &when my husband left us and the country,I worked to support them, not expecting anyone else to. I have never earned more than £ 20K
Couples in the higher income bracket who pay tax on their income already make a good contribution towards general expenditure. Why do they have to lose out yet again? Presumably those who manage to get income they avoid declaring for tax purposes [and we all come across those] will not lose out in the same way.
Yes Morgana like pensioners too. It's too easy for the comfortable to jump onto the Tory bandwaggon slagging off the poor & vulnerable. Yes there is a problem with young girls opting out of work and having kids to gain a house & benefits, the US offers mandatory contraception, if you opt out then you have to waive all benefit entitlement, perhaps we should follow that lead.
Tax evasion accounts for 15x as much as benefit fraud funny how the Tories never mention that !
It will cost this Government a estimated 12 billion according to Tv reports, to change the system, and are already asking will it be worth it?, I agree that those who are on 40k plus should lose out on benefits, me included, then bring home the troops out of Afghanistan another multi billion pound saving, send home the bogus asylum seekers, then make the greedy banks who was bailed out pay back their loans out of the billion pound profits quicker, scrap trident. sorted :).
Flake, I agree with your comment regarding illegal immigrants but I don't think jwithers was comparing your recently employed friend to the long term unemployed who, I believe, do not feel pride in providing for themselves and their families. We all know someone who knows how to abuse the system to the max. We should follow the lead of Denmark who do not hand out benefits to immigrants until they have been resident for 5 years. Also, the long term job dodgers should be made to do community work.
@JMTS. I would doubt that taking this tax credit away would hit those on these sort of incomes too hard. This was a classic case of Labour not means testing a benefit and simply dishing public money out to buy middle england votes at election time.
Buying middle england is what got Labour three wins in a row. Correct that this money should be reduced the more you earn.
Why should wealthier families lose out??? All we do is pay into to state and get nothing in return. It is a no win situation. I do not consider us to be wealthy we are a very hard working family who taken the option to have less than two children because that is what we can afford. It is a disgrace
People my age remember when you got nothing for your first child, wealthy or not and if any benefit should be means tested its this one.For some child benefit is a vital part of their income but for others is little more than a round of drinks.
Pro Driver, If it means the difference between affording child care or not then it could impact in two ways. The carer/caring organisation (a local business) would lose a customer. One of the partners may have to give up work to maintain a level of child care and with a significant drop in family income, which may also be needed to help cover something like a mortgage. I repeat, It ain't as straightforward as it might appear.
I am absolutely astounded! Never in my wildest imagination thought that somebody earning around £60,000 a year could get state benefits. Thank goodness somebody in government has seen sense and is going to put a halt to this ludicrous system. Personally I wouldn't give anybody earning over £30,000pa any benefits whatsoever. Is this country mad!
@JMTS. Why would anyone have to give up work? What sort of parents dump their kids in full time child care anyway? Is the amount handed out so high? Do all those who get it spend it on child care? What's so hard about, for example, a mum going part time, in which case her earnings would drop and trigger payments kicking back in at a higher level?
Like I said, classic case of Middle England vote buying by Labour and simply not sustainable in the long term.
Have Your Say
I also hope they hit the lazy scroungers equally if not harder in this benefit shake-up.
Too many people rely on benefits in this country, procreate and rake in the money!!
By jwithers @ 02/08/2010 15:08:19