Hitting the better off
“Child benefit reforms have hit 10,700 – a loss of £4m in benefits to Midlothian” – so runs the shock article on welfare reform (January 23), which creates the impression that welfare reform is all about harming the worse off...
..but, wait a minute, child benefit reform actually penalises the better off.
Those couples where an earner has over £50,000 of income are being taxed on child benefit for the first time at their top marginal rate.
The article is misleading – yet again an informed discussion on an important topic is hampered by one-sided, if not wrong-headed, commentary.
1.2 million generally moderately well-off couples across the UK are thus being taxed under the new rules at up to 45 per cent (for some a marginal rate of 65 per cent!) on what was previously an untaxed benefit. But, in any case, where does the reporter think all these “lost” benefits come from?
They come from the taxpayer – including Midlothian taxpayers.
So, if nothing had changed, we would have had higher tax rates across the board, including for Midlothian residents.
The change to child benefit targets those able to pay, folk who do not receive subsidised housing or other benefits. Scottish attitudes to welfare reform, according to the Social Attitude Survey of 2013, were shown last year to be as much, or even more, in favour of greater selectivity and restraint compared to the English respondents.
Child benefit reform is part of the drive for better focus on who pays in, while other reforms look at what appropriately goes out of the system. The execution of change may well leave much to be desired, but what is wrong with that basic concept?
Currie Mains, Borthwick
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