Have just sent our proposal off in the process of starting our IVA, and already we now know that we will lose our child tax credits because our total income will be above the limit, so we will lose £134 per month from our budget.
I know that our IP can reduce payments by 15% without informing creditors but ive worked that out to be around£57 per month.
£134 per month from a tight budget could make or break us. Has anybody got any ideas for this one!!!
many thanks
Baldy
The child benefit cut is really going to hurt and particularly where there are more than one child. The impact is going to be severe on those families where one parent works earning £44,000 per year and the other party stays at home to raise the children.
This is on top of the removal of tax credits for middle income families in the budget and will tip many over the edge. A couple with three children on £44,000 per year will be about £3,000 per year worse off. I do not think this is where the cuts should be made.
If you are both under £44,000 but your combined income is over that, then you will keep the benefit.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
This is true Jan and if both parties earn £22,000 they also each get a tax free allowance so would be massively better off than a family where only one works and earns £44,000.
I also fail to see where it kicks in. For example if someone earns just below the threshold and receives overtime or a bonus which means they pay 40% on a small amount, do they then lose child benefit for good? Does the government reclaim any child benefit paid that tax year?
This is a disincentive to work for those with families and an income just below the 40% bracket. It is also a disincentive for families just above the 40% bracket to have children. However, I see no disincentive for having 12 kids by 12 different fathers and never working a day in your life. For these people child benefit will still be paid and in full!
I'm really worried about this, we receive nearly £250 in child benefit and could not meet our IVA payment if this were lost, we would be 3 and a half years in at that point and the thought of it failing after all this effort really does worry me. We have already had to vary the IVA payments this year due to other factors so I doubt we could vary again by this much.
Should I be taking any pre-emptive action now or do folks think this may not actually get the go ahead as it is currently a proposal?
IVA Accepted - Sep 2009
F&F Accepted - Oct 2014
CC Received - Jul 2015
Hi Dougie, you will not be alone in worrying about this as I'm sure a massive number of people in IVAs will be affected. Have a chat with your IP to discuss your concerns.
I doubt if there is much you can do now and if it does happen I am sure creditors would look favourably on any variation or even full and final based on payments paid to date. Hopefully this will not happen and there will be enough opposition in parliament that it is scrapped.
Hi all - this is going to be a huge worry to many & I completely agree with everything Micheal says.
Going along with what Lesley suggests n having this predicament written into your proposals is an excellent Idea.
Final IVA payment made in April 2013, never ever thought we could do it or get through it but we did! X
An IVA.co.uk Mentor is someone sharing from their experiences of dealing with debt
I hope you are right Micheal - Ive just been looking again & some of the papers reported that hidden in the budget, household with incomes over 23,275 with 1 child could lose child tax credits altogether in 2012. I really hope this does not happen.
Sorry edited as inputted wrong year
Last edited by MrsKnight on Mon Oct 04, 2010 12:12 pm, edited 1 time in total.
Final IVA payment made in April 2013, never ever thought we could do it or get through it but we did! X
An IVA.co.uk Mentor is someone sharing from their experiences of dealing with debt
Michael Peoples wrote:
The child benefit cut is really going to hurt and particularly where there are more than one child. The impact is going to be severe on those families where one parent works earning £44,000 per year and the other party stays at home to raise the children.
This is on top of the removal of tax credits for middle income families in the budget and will tip many over the edge. A couple with three children on £44,000 per year will be about £3,000 per year worse off. I do not think this is where the cuts should be made.
I have to say that I am in total agreement with him having just said that there will be a ceiling on out of work benefits unless there are disabilities. People won't get anymore than the average family wage for a working family.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
That is a much better idea than targeting hard working families like that of Angelrainbow. It also seems crazy that two people can earn £43,000 each and still get child benefit whereas a sole earner on £44,000 will lose the benefit.
It is obscene to penalise people like Angelrainbow whose children will grow up with a work ethic and become workers and taxpayers of the future. Instead the state rewards people who can play the system and as a result we have generations of families who do not work and whose children grow up believing that work is for mugs.
