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‘My heart bleeds’ people say as mum moans there’s ‘no point’ having £78k salary because of tax & child benefit rules
The brand new changes have left parents totally divided
A MUM who is on a £78k/year salary has explained why she may be better off earning LESS.
The rant took place on Reddit, following the Spring Budget announcement last week, where Jeremy Hunt confirmed that thousands of parents will be saved from an ''unfair'' tax charge.
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The news was welcome amongst many households, as the budget shake-up essentially means the earning threshold for families claiming child benefit has been raised to £60k.
Following the new guidelines set by the government, the changes will leave almost half a million families better off by an average of £1,260 a year - while a staggering 170k families will be removed from the tax altogether.
What is the high income child benefit charge?
This was introduced in back 2013 and is the government’s way of reducing the amount of child benefit that is paid to those parents on a higher salary.
Currently child benefit paid to those earning over £50,000 a year is clawed back via the tax system on a sliding scale.
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The charge has so far been 1% of the amount of child benefit for every £100 of income between £50,000 and £60,000.
For higher-earning parents who rake in more than £60,000 the charge is 100% – they have to repay everything they have claimed.
But the news may slightly ease life for many cash-strapped families across the nation, one mum has taken to Reddit to reveal why the new change is not necessarily the best deal for her.
The parent, who makes £78k a year, explained that the pay rise has come with a bonus and a car allowance.
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''I work 4 days a week (80% equivalent) which brings the overall pay this year down to just shy of £50k with a £9.6k bonus,'' she noted in .
The Redditor went on to say how out of the £9.6K bonus due in March, she's worked out that a staggering ''40% will go to the taxman, over £2k will need paying back for child benefit'', as she's now over the previous £50k threshold.
I'm a stay-at-home & I've made six figures thanks to four simple side hustles - one is so easy my 11-year-old can do it_1
Including the additional ''£800ish'' that will go towards her student loan, the overall deductions will come up to ''just under £6k''.
''This means I’ll only take home 30% of my bonus?!'' the mum was fuming.
Unsure of how to proceed from now on, the mother - currently on maternity leave with her third tot - wondered if it would be a better option to simply reduce the hours to remain under the threshold.
''I’d then have less to pay in childcare mitigating the difference in the pay I’d receive working an extra day each week,'' she reckoned.
''Its an absolute joke, I was hoping to go back to work after my last baby and push on hard with my career but what is the actual point!
'' I may as well work less hours, keep the child benefit and pay less in childcare!''
Over a thousand people have since raced to comments to share their thoughts, including a fellow mum who's found herself in a similar position.
''I’ve just had a big jump in salary from 45 to 70ish k and feel the same.
Spring Budget at a glance
- Fuel duty will be frozen and the 5p cut extended for a year
- Alcohol duty will be frozen until February next year
- National insurance was cut by an additional 2p
- An extension of the Household Support Fund for the fifth time
- Households on Universal Credit will get an extra year to repay emergency loans from the Government
- A new tax on vapes, which will cause prices to rise
- A one-off new tax on fags to ensure they are more expensive than the electronic alternative
- The high income child benefit charge was raised from £50,000 to £60,000
''Had worked hard passing professional exams and going extra mile whilst still trying to be a good mum and we feel stretched to max at home.''
Another chimed in: ''My heart bleeds.''
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A third advised an option: ''Stick all the extra in your pension. You will also get child benefit.''
However, not everyone felt so sorry, as one meanie said: ''Happy to swap? Some people really don't know their own privilege.''
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