Child benefit, one of the few non-means tested benefits remaining is to be cut for higher income families under new government proposals.
Chancellor George Osbourne has announced that from 2013, the government will withdraw child benefit from families in which one or both parents are higher-rate tax payers ie those who earn more than £42,475 per year.
The net effect of the proposal is that if both parents earn less than £42,475 per year, they will continue to receive the benefit. However, if one parent is a high earner, the family will no longer have an entitlement to receive the benefit. This begs the question of whether the proposals are fair and the topic is presently the subject of significant public debate.
At James Maguire & Co, we have a wealth of experience of cases where one parent earns the main income and the other does not work or is on a smaller or nominal income due to commitments to children, the family and the like. In such cases, we have found that the common position is for the parent who does not have the income or has the lesser income to receive the child benefit payments into their bank account.
From a family law perspective, the concern is what would happen to the entitlement upon separation. The timescales for completion of the divorce process can vary greatly depending upon the complexity of the issues involved and what is at stake financially. Here at family law specialists James Maguire & Co we find that the process can often take 6-12 months plus if it is necessary for the financial aspect to be resolved by way of an application to Court.
Under the proposals, what, therefore will be the position for a non-earner or lower income parent who is separated from their high earner spouse pending resolution of the finances. Will the non-earner or low income parent be precluded from receiving child benefit until the case is resolved and the parties are divorced? Many non-earner or low income parents are reliant on receipt of child benefit during this difficult period.
It is therefore clear that some thought needs to be given to these proposals and in particular, the position regarding entitlement to child benefit upon separation. If you have any concerns about the issue or have any questions about family law or the divorce procedure generally, please do not hesitate to contact a member of the team at James Maguire & Co who would be happy to assist you.
James Maguire & Co is a specialist firm of Family Law and Divorce Law solicitors based in Wilmslow, Cheshire. We offer legal advice to parties going through a divorce including the financial issues which flow from this (including pensions), linked business issues, international aspects and any relevant issues concerning the children. We also offer legal advice in relation to matters covered in this blog and general Children Law advice.
We advise clients in the Wilmslow area and also to the surrounding areas of Alderley Edge, Bramhall, Hale, Altrincham, Manchester and the North West. We are also able to act for clients nationally and internationally subject to the jurisdiction of England and Wales. For advice please contact James Maguire by telephone +44 (0) 1625 529456 or by email james.maguire@family-law.
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