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Child Benefit for divorced cohabiting dads

  • VTwin11
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23 Oct 10 #230806 by VTwin11
Topic started by VTwin11
Does anyone know how the changes in Child Benefit will work???

I'm a higher-rate taxpayer, divorced with two kids by my ex. I live with my new partner and her daughter. Will either my ex or my partner get their child benefit stopped? Or will I have my net pay deducted?

The papers all talk about 'parents' - if one parent is a higher-rate taxpayer the couple loses the benefit payable for their kids... that would mean my ex would lose the benefit.

Other reports talk about 'partners' - if one partner is a higher-rate taxpayer then the couple lose any Child Benefit they may be receiving... that would mean my current partner would lose the benefit.

Another expert on the BBC said today that no Child Benefit will be stopped. It will still be paid but the higher-rate taxpayer will have the amount of the Child Benefit payable deducted from their net pay. He didn't say if that was the Child Benefit payable for their own children or their partner's children. Or both. So, in the worst-case scenario, both my ex and partner could continue to get the benefit and I would get the total amount they both receive deducted from my net pay.

Then there's the question of child maintenance. If my maintenance payments were calculated on the basis that I had no financial responsibility for my partner's child and now I do - having £88 extracted from me every month - surely that would impact on the amount of maintenance I should pay?

I realise the government has rushed the changes to Child Benefit out without a thought for how they will work... but they will impact on people whether they are well thought-out and fair or not.

The sooner I can get some answers the better. Any advice on how it will work or who to ask much appreciated!

VT

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23 Oct 10 #230808 by Fiona
Reply from Fiona
Personally I don't rely on media reports and prefer to rely on the source of their information, in this case the Government's Spending Review. It states CB is to be removed from families with a higher tax payer higher from January 2013. I would imagine the exact details are yet to thrashed out.

Under the CSA rules there is a deduction of 15/20/25% of the non-resident parent's net income for 1/2/3 children respectively living in the NRP's household before the usual calculation. However, if the NRP earns more than their new partner tax credits are added to the NRP's net income before the calculation.

Hope that helps. :)

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23 Oct 10 #230834 by VTwin11
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Thanks Fiona.

The entire Spending Review document only mentions the measure in a few places and each time the only detail is in the following phrases:

"withdrawing Child Benefit from families with a higher rate taxpayer"

"withdrawing Child Benefit from those paying higher rate Income Tax"

So even the almost-zero detail in the full review document is inconsistent.

The lack of detail may not be unintentional. They may well decide that they would rather claw the money off the higher-rate taxpayer through the PAYE scheme rather than stop the Child Benefit payments. If they do they will basically be interfering in family finances in an unprecedented way - often taking from the higher-rate taxpayer's income at source to pay it to the other parent/partner. Bizarre within a 'true family' (where mum, dad and kids live together), even more bizarre in houses where the higher-rate taxpayer is not the parent of the children. If single mums found it hard to find a good bloke before, this wont help them any - "move in with me and the government will deduct your income at source to pay for my kids." Huh?

I have emailed the Treasury. I'll post any info here if I get a reply.

VT

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23 Oct 10 #230837 by Fiona
Reply from Fiona
The Spending Review is just a proposal. Any reform to Child Benefit would need to be included in a new bill which has yet to be thrashed out. The bill would then need to pass the various stages through Parliament etc before it would become law and could be implemented.

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