Child benefit to be Capped

[SiHart]

Chancellor George Osborne has announced plans for a maximum limit on the amount of benefits one family can claim.

He told the Conservative conference the cap would be set at the amount "the average family gets for going out to work", which is about £26,000 a year.

The cap will apply to the combined income from benefits including things like jobseekers allowance, housing benefit and council tax benefit.

An estimated 50,000 households may be affected by the cap, planned for 2013.

Mr Osborne said there would be "no more open chequebook" for out-of-work families.

The limit on benefits would apply to the total received from jobseekers' allowance, income support, employment support allowance, housing benefit, council tax benefit, child benefit and child tax credit.

It would also would include carer's allowance and industrial injuries disablement benefit - although it would not include one-off benefits such as social fund loans and non-cash benefits such as free school meals or working tax credits.

All households with a disability living allowance claimant will be exempted from this measure, as would war widows.

The plan is for local authorities to be asked to assess the total benefit income from 2013 of all new and existing housing benefit claimants, reducing the benefit if necessary so the total remains within the cap.

It came as he defended his plans to cut spending and end child benefit for higher rate taxpayers.

In a keynote speech to the Tory conference, he said Labour's proposal for reducing spending more slowly meant their cuts "wouldn't be smaller - they would be bigger and last longer".

Heralding wholesale welfare reforms, he said the current system was "unaffordable... morally indefensible" and should no longer support people who had made the "mistaken choice" to live on benefits.

He confirmed his earlier announcement that child benefit for higher rate taxpayers from 2013 in order would be axed to save £1bn a year.

Any couples where one parent earns about £44,000 - roughly the 40% tax level - and above will be affected.
'National interest'

Explaining his thinking to the party faithful, Mr Osborne said there could be no delay in paying off Britain's deficit and warned that if he now adopted Labour policy there would be "market turmoil, the flight of investors... the return of crippling instability, Britain on the brink".

He added that the UK was already paying £120m debt interest every day to foreign governments "so they can build the schools and hospitals for their own citizens that we aren't able to afford for ours".

He said Labour offered a "decade lost to debt", adding that "my generation won't stand for it".

He contrasted his actions "in the national interest" with new Labour leader Ed Miliband's policy designed for the "vested interests" of the "trade union leaders who put him where he is".

And the chancellor claimed that not only a string of global and British economic and business organisations agree with him, but also "one of the Miliband brothers, Tony Blair and the British people".

The chancellor, who has spent weeks embroiled in negotiations with ministers facing departmental budget cuts of up to 40%, stressed the future benefits of tackling the deficit.
'No divine right'

He said there would be spending in a "green investment bank", in transport schemes and in bringing in the pupil premium "so that the poorest in our country have access to the kind of education currently only available to the richest".

"Britain has no divine right to be one of the richest countries in the world... we will do everything to make Britain one of the most competitive places in the world to do business," he will add.

Mr Osborne added: "The hard economic choices we make are but a means to an end, and that end is prosperity for all.

"The foundations of a strong economy don't rest alone on the decisions of ministers... they come from the most basic human instincts of all. The aspiration to have a better life, to get a better job, to give your children a better future."

Do you agree with this, or is the fact that if there's a joint income you can still receive it a mockery of the idea? Should all parents still contine to receive it or should it be harsher?

Si xx

[WhiteCrowNZ]

I think if I read this correctly they want to revamp the benefit system so that instead of a whole host of benefits you can apply for, it's one benefit with add-ons. That sounds a good way to go, as might prevent a lot of duplication and hence admin cost.

[brandynigma]

I earn just under £26K a year. I certainly couldn't support both myself and a child with that.

Mind you, I wouldn't bring a child into the world if I didn't think I could support it.

Mind you, there would be myriad problems with me bringing a child into the world...

[Larry]

what is so crazy about this plan is that a family where one person is working earning £44k p/y will have their child benefit stopped yet a husband and wife both earning say £35k p/y (combined income of £70k)will still get the child benefit.I klike many people fail to understand how this is fair and it seems very clear that this has been badly thought out by the government. I have always said that you should only get child benefit for the first two children and IMO it would of been much fairer if it was a universal benefit where every body gets it for the first two kids then no more.

[SiHart]

Or as someone suggested somewhere, stop giving it above the age of 16 and then you'd save millions of pounds.

Si xx

[Si Hunt]

Big Dave has certainly learnt a valuable lesson this week: you can slash public sector jobs, cripple motorists and hike up tax on luxury goods. But take anything away from the Mums, and you're for it! Mumsnet will 'ave yer!

Si.

[Larry]

Or as someone suggested somewhere, stop giving it above the age of 16 and then you'd save millions of pounds.

Si xx

I didn't know that child benefit was paid up to the age of 19 if that child was still in futher education then again how many 18 year olds are classed as children. At that age they should be going out and getting a part time job.

[Lissa]

It certainly seems illogical that one parent earning £45,000 is treated as being better off than two parents earning a combined £89,998 but I'm guessing that working out eligibility using tax codes is the only way they think they can make it work. People are taxed individually so there is no concept of a household income as far as HMRC are concerned. People will lie about household income if there is a bit of free money in it but they're less likely to lie to the tax man.

[Andrew Curnow]

I may be wrong, as nowadays it gets paid straight into an account, but... in the old days, when we used to have an actual Child Benefit book (ie, which we had to physically take to the Post Office for them to stamp before giving out the money) it was in Zel's name, albeit with me also named as another person who could collect it (bit like having an insurance policy in your name, but then having your spouse added as 'another named driver'). I'm pretty certain we could have had it the other way around, but the point being that it was 'officially' logged against just one parent. Assuming that's still the same, then I'd guess they are planning to work it out against the income of just that one parent.

Although I may be wrong!! Just typing that out, it occurs to me that if this were the case, the 'other' parent could earn way over 44K and it probably wouldn't affect it, but none of the news reports suggest that to be the case, so I probably am wrong.

Does seem barmy though - they've got 2+ years before they even implement this, it would be the easiest thing in the world to make the eligibility level related to the total household income.