This is an unusual form of means testing as normally benefits fall as income rises. The proposal is for an 'on-off' switch at 45k. However the aim is to reduce public expenditure by removing this flat rate benefit from the better off.
So that seems fair? After all the rich don't need it do they? Some will, however, argue that the Child Benefit is an 'indicator targeted' benefit, it is given to a group that are known to have a high proportion of need - those with children have to spend more and the aim is to ensure children are well provided for. Another example is old age pensioners, they receive a flat rate benefit regardless of income, because many old people have low incomes. By offering this unconditional benefit nobody needs to ask for it, nor do they need to disclose any personal details.
One aim of government is a more equal distribution of income. Does this move improve it? Could it be that for some it will increase poverty?
The article mentions the idea of an 'on-off' switch, suggesting that the governments automatically assumes that a family with an income of £45000 is sufficient for that family; regardless of whether there are many children in that family. Are there any elderly people dependent on this family whose pensions aren't enough? Rather than the abrupt switch, the benefit should be relative to the family's income and size. Of course, it is understandable why the government would jump to this conclusion: £45000 is around double the average national income; the economic climate is not currently accommodating to these kinds of expenditures. However, this removal of child benefit could cause even more problems e.g. more people on a different benefit to look after their children. The key word to solving this problem is moderation.
ReplyDeleteThe idea to means test child benefit is an obvious way of making cuts to the governments expenditure. Even though it may not be a huge contributor to the current account deficit, the saying "every little helps" is not entirely irrelevent in relation to this specific situation.
ReplyDeleteClearly households with incomes of £45,000 or above per annum are not incapable of providing an adequate quality of life for their children.
However this does not go to say that revisions cannot be made to the proposal as some households may have alternate commitments which may substantially decrease there net income causing them to become inable to provide an adequate quality of life for their children.
With the recent introduction of means testing those who seek child benefits who earn over £45,000 per annum, does this mean that before this proposal people who earnt over £45k were viable to claim benefits? This seems to me a huge waste of government spending in the previous years. On the other hand, I do not agree with the 'on/off' switch, as surely benefits when needed will apply to certain family circumstances, rather than the income.
ReplyDeleteI do not agree with the idea of an on/off switch. I believe that this is too drastic, the fact that at £49999 a family can receive the benefit but at £50000 it cannot. However I do agree with the logic and the thinking behind it, because social welfare is a massive expenditure by the government every year as I think that a lot of money is given out to people every year who perhaps dont need it, for example the queen is allowed to claim the winter fuel allowance. I think that all benefits should be means tested and adjusted according to the subjects income and other encompassing circumstances such as, in this case, the number of children the family have.
ReplyDeleteI do agree that benefits should be cut for high earners, but there needs to be a bit of reality here as £44k in the South East will not go as far as some other areas of the country. Taking into account that houses for familys are expensive (where i live for a small 3 bedroom house £200k+, or rent at about £1000k per month) and you stand no chance of social housing.
ReplyDeleteAre these the couples 'better off' because both adults work full time jobs just to scrape by?
The benefits system in this country encourages people already on benefits to have more kids and discourages those who should be having kids by removing their benefits. I'm sick of innocent hard working people having to pay for unemployed families that use children as a means to get a cheap house, they need a serious wake-up call!