Strange Letter Re Child Benefit Changes

[pilchardthecat]

So i had the you-can't-have-it-anymore letter which gave the option of
1 - opting out of it
2 - keeping it and paying it all back later via self-assessment

Since i'm a PAYE wage slave i opted for 1 as i can't be arsed with self- assessment

7 days later i receive a letter saying that i have "chosen" not to receive it and telling me that i am entitled to it as i have children.

Surely i am not entitled to it as i earn too much, i thought that was the whole point?

[NIIKME]

you are one up on me at least. we haven't got the letter yet. I can see this being a total balls up with ME footing the bill somehow. Would be interested to see other's experience as the coming weeks unfold...............

[Composite Guru]

Read through this first. If you opt out then you lose the right even if you ever have a paycut.

http://www.telegraph.co.uk/finance/personalfinance...

[pilchardthecat]

Composite Guru said:

Read through this first. If you opt out then you lose the right even if you ever have a paycut.

http://www.telegraph.co.uk/finance/personalfinance...

The second letter says i am still entitled to it, but i've chosen not to receive it, so I'm sure i can reapply should i fall below the threshold.

[Zigster]

I thought there was a further issue with opting out (although this might not apply in this case).

Isn't an add on benefit of child benefit that the receiver (the mother, usually) gets credits towards her Basic State Pension? So, for example, my wife wasn't working for the few years after the kids were born so didn't get NI credits towards her Basic State Pension - and you need a minimum of something like 30 years of credits (although it used to be more) to get a full Basic State Pension. However, by receiving Child Benefit, she got credits on the grounds of "home responsibilities" or something like that.

I'm sure I recall that from the form we filled in at the time, which was one of the reasons we made sure it was in my wife's name rather than mine. Could be wrong on that, though - not an expert on Child Benefit.

[Zigster]

Telegraph said:

If you elect not to receive child benefit you should still receive National Insurance credits, which will count towards your state pension entitlement if you are not working. Technically speaking you are still claiming the benefit, just not getting the money. However, a new mother who simply doesn't claim the benefit because of her husband's earnings won't get these NI credits, which could have serious consequences years down the line. Mr Mannion said many taxpayers were "understandably confused" about this difference.

Above is an excerpt from the Telegraph article which backs up what I was saying. It really is a dumb-ass policy - far too complicated. Even putting aside political arguments about whether the wealthy should receive state benefits, it would have been so much easier to have simply removed Child Benefit altogether and adjusted Child Tax Credits to make up the difference where (deemed) appropriate.

[sumo69]

This whole issue is a shambles and is going to cause so much confusion and extra work that I can't see how it can succeed.

The OP's secondary letter is to cover the point when the low or non earning partner suddenly has no CB payments so they are ensuring that they are aware that this is what will happen.

Its estimated that 500k of people will now need to do SA tax returns - I am sure they are all delighted by that!

David