Wednesday, 21 March 2012

What the budget means for families

The Budget was widely touted as being one for "working families". And while singletons around the country complain that they are working just as hard and deserve something too, families will have one question on their minds: what's in it for me?

So what does the Budget bring for families?

Child Benefit

There was mixed news on this front. The army of middle class Tory supporters who have been outraged at the thought of stay-at-home mums being penalised had little to celebrate.

But while George Osborne said he 'stood by the principle' of qualification for the benefit being based on the highest-earning individual rather than joint income, there was a good deal of watering down to the done in the Budget.

Chiefly, the cut-off point will not be when someone goes over the upper earnings threshold, but when they start to earn £50,000 or more. At this stage they won't lose all their benefits immediately, but will have them gradually withdrawn at a rate of 1% per £100 earned, so only those earning over £60,000 receive nothing. 

It means that 750,000 families will continue to receive some or all of the benefit - which means 90% will keep their child benefit.

Personal allowances

There was good news for lower-earning families - including those working part time and caring for children. There was the biggest ever raising of the personal allowance threshold, so that from April 2013 those earning less than £9,205 will pay no tax on their income.

Osborne was keen to point out that 24 million people earning less than £100,000 a year will gain from the measure, and that people working full time on the minimum wage will have seen their income tax bill halve since changes to the allowance began.

Personal statements

These will be brought in from 2014, and will make exciting reading for families. The personal statement will show how much tax and national insurance you pay, and how that money is spent.

There is likely to be a nasty surprise for those hoping to see education emerge as a top spending priority, once the full impact of the cost of paying interest on debt - and welfare payments are factored in.

Tax credits

Sadly one of the biggest stories for families in the Budget is what wasn't there. There was no u-turn on the cuts to tax credits, which make it more expensive for families to go out to work and pay for childcare.

And while Osborne was keen to point out that this wasn't a Budget of 'giveaways' there will be plenty of families who would argue that this was one 'giveaway' they will struggle to do without.
Huffington Post Budget 2012

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