Help me understand my employee's dilema

Emmzi

I have a member of staff (lone parent) who just had a 3k payrise.

She now says she would like to reduce her hours as her benefits entitlement has been cut and she is struggling.

The decision will be based on a balance of businesss and personal need, and your replies will not affect that. I just don't know enough abiout the benefits maze to understand what is happening - can anyone enlighten me? Thanks.

DX2

Surely if her benefits have been cut, she should welcome all the hours she gets. Or is she just doing the least amount of hours (16) for tax credit purposes.

Emmzi

DX2 wrote: »

Surely if her benefits have been cut, she should welcome all the hours she gets. Or is she just doing the least amount of hours (16) for tax credit purposes.

She is currently full time and has requested part time.

Her ebenfits (HB maybe??) have been cut due to her pay rise.

atrixblue.-MFR-.

as tax credit is based around yearly earnings 09/10, this pay rise wont effect it untill 10/11 declaration and hopfully has declaired the rise already for it to be calculated so i cant see that as a problem. her other benefits maybe HB CTB (housing and council tax benefit but unlikly if in full time employment due to her earnings allready before rise) LHB DHP (local housing benefit with discretionary housing payment)? carers allowance? i'm not quite sure as an employer you would have to adhere to her request for part time due to affecting benefits as a result of a payrise, i would sit down with her and talk a bit more with her to understand her position, try to find out what exactly the benefit she is on (hope she not doing anything illegal intentionally) and go from there, her hours and her pay will be taken into account for housing benefits so even if she worked part time her money will effect her housing benefit.

silvercar

It may be that she wants the same money as before and would rather the extra hours with her child rather than the extra money. So if a 3k payrise on fulltime means she can reduce her hours and get the same money for less work, she will still get whatever benefits she is getting and can spend more time with her child.

Or it may be that the 3k pushes her into being a higher tax payer and she will lose entitlement to child benefit from next year, leaving her worse off.

If you have the time, you could put the info you know about her salary etc into https://www.turn2us.entitledto.co.uk and see what benefits she gets. Then add 3k to her salary and see what difference it makes.

Ivrytwr3

Simples - take the £3k rise back off her. You get your full time staff member back and she no longer has a problem with her benefits.

Emmzi

thanks all.. haven't got to the bottom of it but not sure it is my job to!! She tells me she is struggling with rent now I am paying her more and I simply cannot get my head around it... argh! It certainly hasn't put her in a higher tax bracket...

DaisyFlower

I'd personally not agree to it, even if benefits have been taken off her in line with the pay increase surely its better that she earns the money herself? However, i'm probably in the minority i'm sure but I believe you should support yourself and not rely on taxpayers.

[Deleted User]

It could be that she will lose her HB altogether which she does not want to do as there are all sorts of non cash benefits you get for being on HB. Few examples I'm no expert but here are a couple I have used. You can get reduced price Vetinary treatment for animals, Household appliances taken away for free... I'm sure there must be more. She may also be thinking ahead to next Years Tax Credit, If she loses her working tax she may lose free prescription and glasses etc. It's a difficult balance as a single Mum. I did a few Months Maternity Cover and it just wasn't worth it. Arguably, I got £40 week (I extra day) less Tax and NI (33% ish as already used up my personal allowance) meaning I got £27 which I then had to put 65% towards my rent (£17.55) so basically working a whole day for £10, and my bus fare is £2.80 return, not to mention the reduction in tax credit even though I couldn't claim the £5 it cost for afterschool club as Tax Credits will only adjust by £10 or more. It's such a difficult balance.

Gemstar30

Deleted_User wrote: »

It could be that she will lose her HB altogether which she does not want to do as there are all sorts of non cash benefits you get for being on HB. Few examples I'm no expert but here are a couple I have used. You can get reduced price Vetinary treatment for animals, Household appliances taken away for free... I'm sure there must be more. She may also be thinking ahead to next Years Tax Credit, If she loses her working tax she may lose free prescription and glasses etc. It's a difficult balance as a single Mum. I did a few Months Maternity Cover and it just wasn't worth it. Arguably, I got £40 week (I extra day) less Tax and NI (33% ish as already used up my personal allowance) meaning I got £27 which I then had to put 65% towards my rent (£17.55) so basically working a whole day for £10, and my bus fare is £2.80 return, not to mention the reduction in tax credit even though I couldn't claim the £5 it cost for afterschool club as Tax Credits will only adjust by £10 or more. It's such a difficult balance.

Hello

I honestly think you have hit the nail on the head!
I know from my own personal situation that when I was working full time hours (37 pw) I was just about breaking even when taking the 'cost of working' - travel, food etc into account. I was then offered an increase in my salary which meant that the financial help I was getting elsewhere stopped.
I worked it out that by working for 16 hrs pw (2 days pw) at the new salary rate, claiming WTC as being in full time employment due to DLA and then not having those extra 3 days of 'work costs' I would be on the same as I was on previously before the rise. In addition I had an extra 3 days a week to myself to do as I wished.

Maybe not right, but I was happy with what I earned previously, so the extra money aspect never came into it. Time off was more important to me to have a better quality of life.

Things have moved on since then. I have become ill and retired at 60 on Civil Service and OAP pensions.

Gemma
x

Googlewhacker

Gemstar30 wrote: »

Hello

I honestly think you have hit the nail on the head!
I know from my own personal situation that when I was working full time hours (37 pw) I was just about breaking even when taking the 'cost of working' - travel, food etc into account. I was then offered an increase in my salary which meant that the financial help I was getting elsewhere stopped.
I worked it out that by working for 16 hrs pw (2 days pw) at the new salary rate, claiming WTC as being in full time employment due to DLA and then not having those extra 3 days of 'work costs' I would be on the same as I was on previously before the rise. In addition I had an extra 3 days a week to myself to do as I wished.

Maybe not right, but I was happy with what I earned previously, so the extra money aspect never came into it. Time off was more important to me to have a better quality of life.

Gemma
x

Nice to see someone not using the benefits system as a way of living....oh wait, no I'm wrong on that!

Edited to add, I half don't blame the poster for doing it but when the country is in such a mess it is people like this poster that needs to be working more and putting more into the system rather than bleeding it dry