Moving in with GF who claims Tax Credits

FBaby

Blakey1982 wrote: »

Thanks for the reply FBaby.

Her Interest Only mortgage is £840 per month and child car alone £680 per month. Her father lives away now....he helped her by using his income multiple so she could get this house for her, the baby, and the ex who soon left.

I used the calculator provided on the benefits checker and based on us moving in together her benefits would drop by £140 per week!!! Losing that money, combined with her high mortgage and even saving the rent on my flat and bills means we would be around £80 a week worse off.

She does work Full Time already. We both do.

My apologies for assuming she wasn't working. Ok, so you are saying that she would lose about £600 a month benefits... you move in, you don't have to pay rent, you give her the £600 that you paid towards your rent. In addition, you save on council tax, gaz/electricity/water, food.... I just don't understand how you can be worse off as a couple. And even if you are right, you will be £80 worse off a week for only 6 months, is it worth cheating the benefits for that????

dmg24

Blakey1982 wrote: »

Sixer - sorry i missed your comment. YEs thats something we are looking into. her current IO mortgage at 7.3% ends in July 2011 and will drop to around 3.5 - 4% which would save around £350-£400 a month. That would be an achievable situation and work well.......maybe we should wait until then??

You are assuming interest rates will stay low. I don't think you can plan on that basis.

zagfles

FBaby wrote: »

My apologies for assuming she wasn't working. Ok, so you are saying that she would lose about £600 a month benefits... you move in, you don't have to pay rent, you give her the £600 that you paid towards your rent. In addition, you save on council tax, gaz/electricity/water, food.... I just don't understand how you can be worse off as a couple.

Unfortunately it is very likely that they'd be worse off living together as a couple, as the benefits and tax credits system is hugely biased towards single parents and hugely biased against couples, so much so that even after accounting for the big saving in only paying for one household rather than two, it is often the case that they'd be considerably worse off living together. The Tories did promise to sort out this bias but it seems to have slipped off the radar. But they've got Frank Field on the case as their "poverty tsar", and he pointed out this bias several years ago so maybe there's hope...

Hammyman

zagfles wrote: »

even after accounting for the big saving in only paying for one household rather than two, it is often the case that they'd be considerably worse off living together.

Don't get that.

Say he is paying a month:

Rent: £500
Council Tax £100
TV Licence £12
Internet £10
Phone £10
Gas £30
Electric £30
Food £100
Travel between both properties £50
then thats just short of £850 a month.

If he moves in, all those expenses are wiped out. Her food bill will go up but not massively so. Her gas and electric will be virtually identical.

Sorry but I doubt she's got £850 a month in tax credits to lose so yes, they'd be better off. Like many posts in here it smacks of someone trying to work out how to move in with someone but make the savings and no or minimal contribution, getting the tax payer to foot the bill.

Indie_Kid

zagfles wrote: »

Unfortunately it is very likely that they'd be worse off living together as a couple, as the benefits and tax credits system is hugely biased towards single parents and hugely biased against couples, so much so that even after accounting for the big saving in only paying for one household rather than two, it is often the case that they'd be considerably worse off living together. The Tories did promise to sort out this bias but it seems to have slipped off the radar. But they've got Frank Field on the case as their "poverty tsar", and he pointed out this bias several years ago so maybe there's hope...

I don't understand how they'll be worse off? It's not as if (well, I don't always) they need to do double the amount of washing and they won't need 2 phone lines, broadband, etc.

zagfles

Hammyman wrote: »

Don't get that.

Say he is paying a month:

Rent: £500
Council Tax £100
TV Licence £12
Internet £10
Phone £10
Gas £30
Electric £30
Food £100
Travel between both properties £50
then thats just short of £850 a month.

If he moves in, all those expenses are wiped out. Her food bill will go up but not massively so. Her gas and electric will be virtually identical.

Sorry but I doubt she's got £850 a month in tax credits to lose so yes, they'd be better off. Like many posts in here it smacks of someone trying to work out how to move in with someone but make the savings and no or minimal contribution, getting the tax payer to foot the bill.

You're making lots of assumptions there.

A single person's rent is likely to be far less than £500 - you can get a family home for that round here.

Similarly council tax with the 25% single person's discount looks high - plus they'll have to pay 100% on the joint home now as there are 2 of them rather than than 75% she pays now. So instead of 75% + 75% on two properties they'd be paying 100% on one, and on the more expensive one presumably.

Why do you think a couple would eat less food than 2 single people? OK there might be a bit of bulk buying saving but the difference will be trivial.

Travel between properties £50 a month? Where do you get that from, they could live walking distance apart. Or - even if they live a long way apart - his travel to work costs might increase by far more than the saving travelling to each other.

And as she's getting the childcare element of the WTC her tax credits could easily be more than £850 a month.

I worked all this out for a friend of mine a couple of years ago and he is a similar position to the OP - he simply could not afford to move in with his GF because they'd be far worse off.

zagfles

sh1305 wrote: »

I don't understand how they'll be worse off? It's not as if (well, I don't always) they need to do double the amount of washing and they won't need 2 phone lines, broadband, etc.

Because her tax credits would drop by several thousand. eg if he earns £20,000 her tax credits could drop by up to £7800.

Indie_Kid

zagfles wrote: »

Because her tax credits would drop by several thousand. eg if he earns £20,000 her tax credits could drop by up to £7800.

Other costs will drop too.

themull1

How is the interest only payment that high?

somethingcorporate

themull1 wrote: »

How is the interest only payment that high?

The rate is 7.3% as per post 10.

To me it seems that the house / mortgage etc cannot be afforded so you should sell up and rent.

By being on IO you are effectively renting anyway.