While I agree with the principle, the Government’s planned cuts to child benefit for anyone earning over £44,000 has a massive loophole. If I was earning £43,875 and my partner wasn’t earning anything, a £1000 pay rise would leave the family drastically poorer. Not only would I only get to keep £600 of that £1000, I would also loose out on over £1,700 in child benefit. It’s a massive disincentive to work hard for that pay-rise. Meanwhile, a family where two parents are working can earn up to £87,750 between them without loosing anything.
The argument for having such a simple cut-off is that it saves a lot of money in administration costs, but this really hits families where one parent has a good job and the other doesn’t. Why they don’t consider joint income is difficult to comprehend. It makes a lot more sense to stop the benefit once you’re joint income goes beyond, say, £60,000.
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