Stop paying state pensions and child benefit to the wealthy

It was decided recently by the government that Child Benefit is a 'Universal benefit' and that any proposal to means-test it, is more costly than the cost of  continuing to pay it to the wealthy. 

I do not believe this is fair comment, but have none-the-less written a proposal to get round costly means testing……..

Jilly Cooper once famously remarked that  Child Benefit paid for the extra bottle of champagne from Sainsbury' each month. Along with many wealthy recipients of the 'Universal' benefit she seemed free from any moral conscience in accepting the state sponsored bottle of champagne. Other wealthy people have had a conscience and have declined the payment or donated the monthly amount to charitable causes without drawing attention to their actions.

I can only presume that the same reasoning is applied to state pensions payments to Millionaires – that to means-test it is more costly than continuing payment to the wealthy .

 For Child Benefit, my proposal is to avoid costly time consuming means testing. Every year in April when the P60 is produced, the Inland Revenue passes this information by email to the relevant Child benefit office. Anyone who is seen to earn over say £150,000 pa ( the small percentage of the population who actually earn over £150,000  – it really is a small percentage)  has the benefit stopped. Likewise, if the person takes a huge cut in income in a following year and falls below the £150,000 threshold the benefit is reinstated for the next year….and so on. For couples both p60s are taken into account

For the people who for some reason do not have a p60 the Inland Revenue has the information of a persons tax return relating to income from investments and savings and this can be used by the child benefit department. 

You then have people like the Prime Minister and the Deputy Prime Minister who apparently earn below the threshhold of £150,000 who are, on that basis, eligible for Child Benefit payments but who also have enormous wealth in savings and investments. Therefore, there is an obligation on the Inland Revenue to pass on the annual declaration of interest earned on savings and investments as well as the income from paid employment. (I suspect under my proposal they would not get the Child Benefit due to the wife's income being taken into account)

 On the pension issue, anyone wanting to receive the state pension must also agree to the Inland Revenue submitting their annual Tax return information to the Pensions Agency and like the Child Benefit system, can only gain the state pension if they are below the £150,000 income from all sources threshhold.

My threshold for both examples is an arbitary figure for purposes of the debate. The detail is for others to determine!

Everyone has a statement of earnings. If people are on benefits they get a statement of income and tax paid each year from the relevant benefits office. All employees on PAYE get a P60 and everyone else, including the self-employed and the retired has to make an annual declaration of income to the Inland Revenue with resulting Inland Revenue statement of tax to be paid.

These are all things that currnetly happen so they are not new paper generating costly ideas. i merely suggest the information is passed from one dept to another.

Why is this idea important?

It was decided recently by the government that Child Benefit is a 'Universal benefit' and that any proposal to means-test it, is more costly than the cost of  continuing to pay it to the wealthy. 

I do not believe this is fair comment, but have none-the-less written a proposal to get round costly means testing……..

Jilly Cooper once famously remarked that  Child Benefit paid for the extra bottle of champagne from Sainsbury' each month. Along with many wealthy recipients of the 'Universal' benefit she seemed free from any moral conscience in accepting the state sponsored bottle of champagne. Other wealthy people have had a conscience and have declined the payment or donated the monthly amount to charitable causes without drawing attention to their actions.

I can only presume that the same reasoning is applied to state pensions payments to Millionaires – that to means-test it is more costly than continuing payment to the wealthy .

 For Child Benefit, my proposal is to avoid costly time consuming means testing. Every year in April when the P60 is produced, the Inland Revenue passes this information by email to the relevant Child benefit office. Anyone who is seen to earn over say £150,000 pa ( the small percentage of the population who actually earn over £150,000  – it really is a small percentage)  has the benefit stopped. Likewise, if the person takes a huge cut in income in a following year and falls below the £150,000 threshold the benefit is reinstated for the next year….and so on. For couples both p60s are taken into account

For the people who for some reason do not have a p60 the Inland Revenue has the information of a persons tax return relating to income from investments and savings and this can be used by the child benefit department. 

You then have people like the Prime Minister and the Deputy Prime Minister who apparently earn below the threshhold of £150,000 who are, on that basis, eligible for Child Benefit payments but who also have enormous wealth in savings and investments. Therefore, there is an obligation on the Inland Revenue to pass on the annual declaration of interest earned on savings and investments as well as the income from paid employment. (I suspect under my proposal they would not get the Child Benefit due to the wife's income being taken into account)

 On the pension issue, anyone wanting to receive the state pension must also agree to the Inland Revenue submitting their annual Tax return information to the Pensions Agency and like the Child Benefit system, can only gain the state pension if they are below the £150,000 income from all sources threshhold.

My threshold for both examples is an arbitary figure for purposes of the debate. The detail is for others to determine!

Everyone has a statement of earnings. If people are on benefits they get a statement of income and tax paid each year from the relevant benefits office. All employees on PAYE get a P60 and everyone else, including the self-employed and the retired has to make an annual declaration of income to the Inland Revenue with resulting Inland Revenue statement of tax to be paid.

These are all things that currnetly happen so they are not new paper generating costly ideas. i merely suggest the information is passed from one dept to another.

Proportional Fines – Fairness

It will not have escaped the notice of the lower paid, that if they have to pay a £60 parking or speeding fine it is a significant proportion of income. If you are on an income of £12,000 per annum the £60 fine is 0.5% of annual income.

So for simplicity, let’s argue that the benchmark for a fine is 0.5% of annual income and not just a standard £60 fine regardless of income.

 

The following scale of charges would then apply to the annual incomes shown below:

Income                Fine

£12,000              £60

£20,000             £100

£50,000             £250

£75,000             £375

£100,000          £500

£150,000          £750

£250,000       £1250

£500,000       £2500

£1,000,000    £5000

I should clarify that I am not writing this because I or any of my family members have recently been fined!

I am also not advocating that the impact of a £60 fine for speeding should be lessened for the lower paid; indeed, we are told that it is important for road safety, that the fine has to have an impact to alter behaviour that is considered dangerous for all road users.

Justice must be served fairly – regardless of income and there is NO fair reason why the wealthy should pay proportionately less than those on a much lower income. My proposal for proportional fines would also hopefully have some effect in changing the arrogant disregard for parking regulations so evident in towns and cities where wealthy owners of top-of-the-range car owners blatantly inconvenience other road users, including pedestrians and totally disregard parking regulations because the fine or clamping and recovery fee they will eventually pay, is only a tiny percent of their income/savings.

Whenever a proposal is made concerning proportional fairness, there is an outcry about the cost of administering the scheme and a FAIR idea is shelved with a return to the status quo.

My method is simple – anyone fined, must submit their previous years P60 stating taxable income and the fine administered is based on this. As with any idea, my proposal is not perfect, as there will be some who have more savings in bank accounts than income; but where there is doubt – such as a Ferrari owner claiming an income of £10,000 etc – then maybe in such unusual cases there is discretion to request copies of annual bank/savings statements. The very wealthy will use their accountants for a bit of creative accountancy, but that will always be the case.

As the Inland Revenue is a Government department, the P60 information from the department could be sent to the office dealing with the fine bypassing the need for the person being fined to submit the P60 in the post, reducing cost and an unnecessary paper trail. It merely requires emails between the Inland Revenue and the department currently administering the fine that then send out the notice of amount fined.

Any politician who says this unworkable should therefore immediately abolish the financial element – the £60 fine and administer a points on licence system as it is so obviously unfair and aimed at the lower paid. By abolishing the financial penalty the lower paid are on an equal footing with the wealthy.

Why is this idea important?

It will not have escaped the notice of the lower paid, that if they have to pay a £60 parking or speeding fine it is a significant proportion of income. If you are on an income of £12,000 per annum the £60 fine is 0.5% of annual income.

So for simplicity, let’s argue that the benchmark for a fine is 0.5% of annual income and not just a standard £60 fine regardless of income.

 

The following scale of charges would then apply to the annual incomes shown below:

Income                Fine

£12,000              £60

£20,000             £100

£50,000             £250

£75,000             £375

£100,000          £500

£150,000          £750

£250,000       £1250

£500,000       £2500

£1,000,000    £5000

I should clarify that I am not writing this because I or any of my family members have recently been fined!

I am also not advocating that the impact of a £60 fine for speeding should be lessened for the lower paid; indeed, we are told that it is important for road safety, that the fine has to have an impact to alter behaviour that is considered dangerous for all road users.

Justice must be served fairly – regardless of income and there is NO fair reason why the wealthy should pay proportionately less than those on a much lower income. My proposal for proportional fines would also hopefully have some effect in changing the arrogant disregard for parking regulations so evident in towns and cities where wealthy owners of top-of-the-range car owners blatantly inconvenience other road users, including pedestrians and totally disregard parking regulations because the fine or clamping and recovery fee they will eventually pay, is only a tiny percent of their income/savings.

Whenever a proposal is made concerning proportional fairness, there is an outcry about the cost of administering the scheme and a FAIR idea is shelved with a return to the status quo.

My method is simple – anyone fined, must submit their previous years P60 stating taxable income and the fine administered is based on this. As with any idea, my proposal is not perfect, as there will be some who have more savings in bank accounts than income; but where there is doubt – such as a Ferrari owner claiming an income of £10,000 etc – then maybe in such unusual cases there is discretion to request copies of annual bank/savings statements. The very wealthy will use their accountants for a bit of creative accountancy, but that will always be the case.

As the Inland Revenue is a Government department, the P60 information from the department could be sent to the office dealing with the fine bypassing the need for the person being fined to submit the P60 in the post, reducing cost and an unnecessary paper trail. It merely requires emails between the Inland Revenue and the department currently administering the fine that then send out the notice of amount fined.

Any politician who says this unworkable should therefore immediately abolish the financial element – the £60 fine and administer a points on licence system as it is so obviously unfair and aimed at the lower paid. By abolishing the financial penalty the lower paid are on an equal footing with the wealthy.

Make Motoring fines proportional to Income

It will not have escaped the notice of the lower paid, that if they have to pay a £60 parking or speeding fine it is a significant proportion of income. If you are on an income of £12,000 per annum the £60 fine is equivilant to 0.5% of your annual income.
So for simplicity, let’s argue that the benchmark for a fine is 0.5% of annual income and not just a standard £60 fine regardless of income.

The following scale of charges would then apply to the annual incomes shown below:

Income Fine
£12,000 £60
£20,000 £100
£50,000 £250
£75,000 £375
£100,000 £500
£150,000 £750
£250,000 £1250
£500,000 £2500
£1,000,000 £5000

I am not advocating that the impact of a £60 fine for speeding should be lessened for the lower paid; indeed, it is important for road safety that the fine has to have an impact to alter behaviour that is considered dangerous for ALL road users.

Justice must however be served fairly – regardless of income and there is NO FAIR REASON why the wealthy should pay proportionately less than those on a much lower income. My proposal for proportional fines would also hopefully have some effect in changing the arrogant disregard for parking regulations so evident in towns and cities. Often, wealthy owners of top-of-the-range car owners blatantly inconvenience other road users, including pedestrians (the blind, wheelchair bound, mothers with prams – by parking up on pavements) and totally disregard parking regulations because the fine or clamping and recovery fee they will eventually pay, is only a tiny percent of their income/savings or less than a days interest on their savings.

Whenever a proposal is made concerning proportional fairness, there is an outcry about the cost of administering the scheme and a fair idea is shelved with a return to the status quo.

My method is simple – anyone fined, must submit their previous years P60 stating taxable income and the fine administered is based on this. As with any idea, my proposal is not perfect, as there will be some who have more savings in bank accounts than income; but where there is doubt – such as a Ferrari owner claiming an income of £10,000 etc – then maybe in such unusual cases there is discretion to request copies of annual bank/savings statements. The very wealthy will use their accountants for a bit of creative accountancy, but that will always be the case, it is not a reason to be fobbed off.

As the Inland Revenue is a Government department, the P60 information from the department could be sent to the office dealing with the fine, bypassing the need for the person being fined to submit the P60 in the post, reducing cost and an unnecessary paper trail. It merely requires emails between the Inland Revenue and the department currently administering the fine that then send out the notice of amount fined.

Any politician who claims that this is unworkable should IN FAIRNESS immediately abolish the £60 fine – the financial element – and purely have a points on licence system. Then the lower paid are on an equal footing with the wealthy.

Why is this idea important?

It will not have escaped the notice of the lower paid, that if they have to pay a £60 parking or speeding fine it is a significant proportion of income. If you are on an income of £12,000 per annum the £60 fine is equivilant to 0.5% of your annual income.
So for simplicity, let’s argue that the benchmark for a fine is 0.5% of annual income and not just a standard £60 fine regardless of income.

The following scale of charges would then apply to the annual incomes shown below:

Income Fine
£12,000 £60
£20,000 £100
£50,000 £250
£75,000 £375
£100,000 £500
£150,000 £750
£250,000 £1250
£500,000 £2500
£1,000,000 £5000

I am not advocating that the impact of a £60 fine for speeding should be lessened for the lower paid; indeed, it is important for road safety that the fine has to have an impact to alter behaviour that is considered dangerous for ALL road users.

Justice must however be served fairly – regardless of income and there is NO FAIR REASON why the wealthy should pay proportionately less than those on a much lower income. My proposal for proportional fines would also hopefully have some effect in changing the arrogant disregard for parking regulations so evident in towns and cities. Often, wealthy owners of top-of-the-range car owners blatantly inconvenience other road users, including pedestrians (the blind, wheelchair bound, mothers with prams – by parking up on pavements) and totally disregard parking regulations because the fine or clamping and recovery fee they will eventually pay, is only a tiny percent of their income/savings or less than a days interest on their savings.

Whenever a proposal is made concerning proportional fairness, there is an outcry about the cost of administering the scheme and a fair idea is shelved with a return to the status quo.

My method is simple – anyone fined, must submit their previous years P60 stating taxable income and the fine administered is based on this. As with any idea, my proposal is not perfect, as there will be some who have more savings in bank accounts than income; but where there is doubt – such as a Ferrari owner claiming an income of £10,000 etc – then maybe in such unusual cases there is discretion to request copies of annual bank/savings statements. The very wealthy will use their accountants for a bit of creative accountancy, but that will always be the case, it is not a reason to be fobbed off.

As the Inland Revenue is a Government department, the P60 information from the department could be sent to the office dealing with the fine, bypassing the need for the person being fined to submit the P60 in the post, reducing cost and an unnecessary paper trail. It merely requires emails between the Inland Revenue and the department currently administering the fine that then send out the notice of amount fined.

Any politician who claims that this is unworkable should IN FAIRNESS immediately abolish the £60 fine – the financial element – and purely have a points on licence system. Then the lower paid are on an equal footing with the wealthy.