I don't have any personal interest in child benefit because I don't have children.
There is a strong argument that well-off people shouldn't get child-benefit - which of course is paid for partly by people who never have had and never will have children.
There are also strong arguments for having a universal child benefit - being universal makes it easy to administer, and perhaps more importantly, it is the one source of income, however small, that a parent has immediate access to in all sorts of circumstances, including abandonment by the wage-earner or sudden loss of income, perhaps because an employer or customer has failed to pay.
But given that child benefit has always been universal, the recently announced change should be judged as a change, not in some abstract way, but how it will impact upon actual people in reality.
The change is patently unfair in that households with children, where one parent only is in paid work, lose it at £44k a year, whereas a household with two parents earning could have an income of nearly £90k before losing the benefit.
(This has been characterised as picking on the 'SAHM's - the Stay-at-Home-Mother households, who, no doubt are far more attractive or deemed worthy than the single-parent household...a nice subtle reminder that single parents deserve all they don't get, irrespective of the fact that they are actually doing the parenting.)
Just as unfortunate is the fact that it represents a massive marginal tax rate. A modest pay-rise of a few hundred pounds could mean someone loses several thousand pounds in CB. It will also be interesting to see how they intend to administer it for people with varying income, where overtime or commission may push them over the limit, but without any guarantees.A real disincentive not to work - although conversely, perhaps it will encourage the sharing of earning and childcare more equally between both parents. Hmm, probably not a policy many in the Tory party actually want to encourage
I was really annoyed by Philip Hammond on the TV last night. He declared that 'the median income for one income households in the 40% bracket is £75k'. Clever use of the word 'median', there. It sounds impressive and technical. But look again what it actually means.
Half of the people affected earn less than £75k. As that covers a range of £30k, it's probably fair to say that nearly another sixth earn between £75k and £87k. So, about 2/3 of single-income households who will lose CB, earn less than the maximum joint income where people remain eligible for CB.
George Osborne has claimed that this unfairness is nothing new, because income is taxed on the individual not on the household, so what are people moaning about?
He is of course talking nonsense, because Child Benefit is not a payment to households - else people like me would get it - it's a payment based on the number of children. And he's trying to cover up his gaffe by announcing an extra tax allowance for married couples - irrespective of whether they have children or are caring for dependent adults. Just, anyone really.
The other aspect is a consideration of what is a 'high earner'. I've seen some interesting comments on the internet ranging from 'I couldn't support a partner and two kids on less than £50k' to 'why should I subsidise rich people to breed'.
I found an interesting article last week which said
The median wage in Britain last year was £20,800. If you take home more than £40,000 a year, you are in the richest 10 per cent.
The figures chime with what I've read elsewhere, except that I would take issue with the word 'richest' and also question the word 'wage'.
A wage isn't the same as income, especially when you consider the people who have unearned income, from investments, including rental property. I am also not convinced it covers people whose main income is from the profits of a limited company. It doesn't seem to include people on 'out-of-work' benefits, including pensions, but it is also reduced by the large number of people who work part-time. So the stated figures are distorted beyond any usefulness and it's guesswork what earnings flow into a 'typical' household.
I have read a figure that says about 15% of people who currently have children are in one-income-households above the 40% threshold. That's actually rather a lot of people (over a million households, so nearly two million adults); even more if you add in the people who are close to the threshold and expect to rise above it soon.
Lost in the small-print is the withdrawal of child-benefit for 16-18 year-olds still in full-time education. I don't know how that chimes with the raising of the school-leaving age to 18 in 2013, but I suspect that this announced cut, and the abandonment of the Building Schools for the Future, means that it won't happen - the Tories will keep school leaving age at 16. And is an across-the-board attack on all people with future 16-19 year-olds, including - especially - the poorest.
There's been mutterings that the chattering classes have ignored the restricting of benefit to £26k per year. I know that sounds quite a lot of money for not working, but of course, most of it isn't 'money'. The amount of benefit paid out is dependent on the amount of rent that is being charged, especially by private landlords.
The internet tells me that the average monthly rent in my postcode is £600 for a studio flat or £1300 for a two bedroomed house. Granted these are nice places, to rent to young professionals rather than claimants, but even so, it's not 'benefit scroungers' who are getting rich, but the buy-to-let brigade, and the other property speculators.
The same people who are pushing up house-prices, which leads to someone saying they couldn't imagine supporting a partner and two kids on less than £50k in London. Hmm, good luck in finding a £200k property.
So, she's right, but then, why should she be subsidised by someone earning half that, and still living in their parental home?
People are angry, knowing that the benefit cap will force people out of their rented homes. Instead they suggest rental caps, as used to exist. I'm inclined to favour that. However, it will lead to these rapacious landlords withdrawing from the market, and the poor people will still be homeless, even though it will allow Ms £50k to afford a decent family home, and Mr £23k to move out of his teenage bedroom.
