Arguments for and against Child Benefit changes
The British government has announced that from 2013 those earning above 43
, 875 a year will no longer receive child benefit. Currently anyone with children receives 20.13 a week for their first child plus 13.40 a week for any other children they have. As part of their cost cutting plans they have now decided that those in the 40% tax band should forego this benefit. There has been much debate since these plans were announced, with many for and many against the changes.
Arguments For The Changes
The reason for the cuts is to help reduce the public deficit, so this itself is one of the benefits. It is debatable whether or not those who earn over 43, 875 a year really need this benefit, something the government has obviously decided they do not. Many, even most people, believe that this amount should easily be enough to bring up children with, it being almost 20,000 above the average salary. People on much less are able to bring their children up on what they earn so those in this salary bracket shouldn't require child benefit to do so. There is also the debate as to whether the less well off should be paying taxes for part of those taxes to go to those who are better off. Should those on these good incomes be the priority when it comes to benefits, or should it be exclusively for those who need it most? Another argument for these changes is that it could help prevent tax rises being necessary in the long run.
Arguments Against The Changes
Some have argued that this could have a negative impact on the economy; that those on middle to higher incomes are those who spend more money and therefore contribute most to the economy. This child benefit change will mean that some will have less disposable income than previously. Others say that those on good salaries are being punished for being successful, that they have worked hard to achieve this salary and should be penalised for it. Of course, there are also those who work hard but aren't paid so well. The main issue that has been bought up since the announcement was made is that it is individual based rather than family based so some are not losing the benefit despite having a higher household income than those who are. An individual salary is all that will be considered when calculating whether or not someone receives child benefit, so if one parent in the household earns more than 43, 875 a year they will not receive it, while if neither parent earns this they will. So in an extreme example, a family where both parents earn 40,000 will still receive child benefit despite earning 80,000 between them, while a family where one parent earns 44,000 and the other doesn't work won't receive it although their family income is almost half that of the other example.
How Will It Affect Families?
Although those affected by the child benefit changes will all be on good salaries, some families will have to make cutbacks. They will be losing just over 1,000 a year for their first child plus nearly a further 700 for all other children they have. So a family with three children will not be getting 2,449.20 a year that they currently do receive. For some this may mean having to downsize on where they live, although this is an extreme example. In reality it may just mean going without some non essential things. Could it affect the children themselves? Many put their child benefit towards
savings for children, in an attempt to save for their children's future. This may be something some will not be able to afford, but then it could be argued that parents on lower incomes are not able to afford this either.
Andrew Marshall (c)
Arguments for and against Child Benefit changes
By: Andrew Marshall
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