The one-income parenthood trap:
A parent asks: ”How can we strive to improve our family income? When you work at getting promotion and a much-needed pay increase you lose out in child benefit but other families keep this allowance despite being jointly far higher earners. Also, the fact I have dependents doesn’t count for anything in UK tax system as I pay out the same in tax as my single colleagues who don’t have any children yet. It seems a crazy way of doing things especially as we pay considerably higher tax overall than friends on similar household income – and some of them haven’t started a family and have few outgoings. Of the couples who’ve already got children many of them keep their child benefit but we lose ours making the gap even wider than it already is, bearing in mind I already pay way more tax! It’s like my partner and I are being asked to pay a tax premium these days. Surely care responsibilities and having dependents should play a part in calculating tax due? And surely parents should be taxed based on joint household/family earnings? No wonder some parents find it harder than others to make ends meet.” Anonymous
MAHM Comment: One-earner or ‘single-income’ couples pay more tax than their dual income counterparts on same household income – and yet they’re precisely the ones who’ve lost their child benefit on top. So it’s a double whammy. Also, if plans for tax allowances on childcare costs go ahead – and which will only be payable where both parents are in paid employment – then it will be a triple whammy ie the employed parent cannot offset tax against the costs borne by his/her partner who has forfeited an income to provide care at home.
The point is that ALL parents carry costs in raising children but successive govts only want to recognise costs of employing a paid childcare professional. Many dual-earner parents on reasonable incomes which are way above average household wages will benefit from all these ‘pro-childcare’ measures whilst couples with one parent investing time at home, struggling to cope on one full time income (whether it’s mum or dad at home) will be sidelined. This is not what we’d call ‘Fair Family Taxation’!!