MSE News: Benefits shake-up to introduce Universal Credits

richpoortyke

lazer wrote: »

The improvement is that under the new system, you should actually be able to do the few hours and receive financial reward

Under the current system -
JSA - £65
10 hours work at minimum wage - £59.30

Currently in this situation you would receive
Wages - £59.30
JSA - £10.70 (£5 disregard for earned income)
Total: £70.00

Under the proposed system
Wages -£59.30
JSA -£20.75 minimum (35p kept for every £1 earned)
Total -£80.05

So you would be £10 better off a week for working 10 hours under the new system. Of course this doesnt allow for any travel costs to work which would quickly eat up that extra money.

Just wondering when the 500,000 jobs (many of which are part time) have all gone what the Govt will be telling the 2 million still unemployed when there are 0 vacancies? Not to mention those being moved from ESA/Incap Benefits

Sixer

no-oneknowsme wrote: »

How would this would though ? Considering allowable expenses can be deducted for the self employed ?

Eg : A self employed person works 40hrs per week - if the above method is used (NMW X amount of hours worked per week , this would mean that the figure of £12,168 would be classed as the yearly earnings....

When in reality , the earnings may be a few grand less than the figure of £12,168 because of allowable expenses!

That would hardly be a fair system.

It will be based on profit, which you have to declare on your tax return. Allowable expenses don't really have anything to do with it? If you have [allowable] expenses associated with your work, then they aren't counted as income, because they're not income.

If you declare to the Universal Credit people that you work 30 hours a week but your profit is only £150 per week, they will ignore that in favour of NMW, which is £5.93 x 30 or £177.90 per week. On the other hand, if you declare a profit of £178 or more per week, that is what they will use.

As I've said before on this thread, this is presumably to prevent 'bogus' self employment by which people stretch the hours they actually work so that they will qualify for tax credits and also to ensure that the social security system doesn't end up providing the capital for people to start a business. That's not what benefits are for.

Businesses that are really pin money (eg one Avon round that someone does one night a week and stretches out to say takes the number of hours that gives entitlement to more benefit) shouldn't entitle people to full-time in-work benefits. Businesses that aren't viable or require the owner to have capital to support themselves while it's built up aren't the remit of the benefits system. They're the remit of capital providers: banks.

I am usually of opinions that many on this forum would see as bleeding heart/woolly liberal. I disagree with most of the attitudes towards benefits expressed by the loudest voices here. But in this case, I'm honestly aghast that people think that tax credits should underwrite their business ventures. They really, truly, shouldn't.

DaisyFlower

Graham29 wrote: »

ska_lover wrote: »

There must a lot out there though, we have one of the highest teenage pregnancy rates in the whole of Europe, these teens haven't been in a solid, comitted relationship for years, have they? Maybe you are older than me (I'm 29 years old) and I see plently of girls who I went to school with who now have 3/4 children and have never worked a day in their lives. I'm not assuming that all single parents are in the situation through being irresponsible, but plently are.

If we didnt have the benefit dependant culture we have where people can choose not to work children would not grow up to believe that having a child very early is the way of life. Stop the benefits for simply having a child and it will benefit the country in many ways, our teen pregnancy rate would drop, children would be no be born into casual relationships and growing up in a working household will install a work ethic into future generations. Stats show that most children raised on benefits go onto claim themselves, schools educate them but they see their parent/s not working and getting money and the latest gadgets etc so thay have no incentive to work.

Also, I think the new rule re S/E is great. So many get away with declaring small profits or dont actually work the hours needed for tax credits etc that it will stop a lot of that. If working S/E doesnt cover the bills then why should othe tax payers subsidise that?

A universal credit should mean a far fairer system. Some mums get 9 months maternity leave paid whereas those on benefits get to stay home for years with other working mums taxes paying for them. NRP's will be treated the same as PWC, both will be expected to work to support the child rather than just one.

Any change that stops people choosing not to work has got to be good.

Sixer

DaisyFlower wrote: »

Also, I think the new rule re S/E is great. So many get away with declaring small profits or dont actually work the hours needed for tax credits etc that it will stop a lot of that. If working S/E doesnt cover the bills then why should othe tax payers subsidise that?

DaisyFlower: I do agree... BUT - there are many employers out there who skirt the rules vis a vis self-employment in order to avoid paying NMW, employers NICs, holiday pay, sick pay and to avoid upholding employment rights. If the government is ensuring that individuals cannot take this sort of advantage of self-employment under Universal Credit, then it also needs to ensure that these companies are held to account about the way people are taken on and that they don't take advantage either. The common pot is missing out on a lot of employers NICs this way. This, to me, is typical of a Tory-led government. They penalise (in this case rightly, I'm not arguing that) the "little man", but the businesses are allowed to carry on willy nilly. I don't feel that's right.

no-oneknowsme

Sixer wrote: »

It will be based on profit, which you have to declare on your tax return. Allowable expenses don't really have anything to do with it? If you have [allowable] expenses associated with your work, then they aren't counted as income, because they're not income.

If you declare to the Universal Credit people that you work 30 hours a week but your profit is only £150 per week, they will ignore that in favour of NMW, which is £5.93 x 30 or £177.90 per week. On the other hand, if you declare a profit of £178 or more per week, that is what they will use.

As I've said before on this thread, this is presumably to prevent 'bogus' self employment by which people stretch the hours they actually work so that they will qualify for tax credits and also to ensure that the social security system doesn't end up providing the capital for people to start a business. That's not what benefits are for.

Businesses that are really pin money (eg one Avon round that someone does one night a week and stretches out to say takes the number of hours that gives entitlement to more benefit) shouldn't entitle people to full-time in-work benefits. Businesses that aren't viable or require the owner to have capital to support themselves while it's built up aren't the remit of the benefits system. They're the remit of capital providers: banks.

I am usually of opinions that many on this forum would see as bleeding heart/woolly liberal. I disagree with most of the attitudes towards benefits expressed by the loudest voices here. But in this case, I'm honestly aghast that people think that tax credits should underwrite their business ventures. They really, truly, shouldn't.

If thats the case then surely a lot of genuinely self employed people are going to suffer too ?

My Husband is self employed in a trade which has very high costs and allowable expenses . This means that although he (genuinely) works around 35 hours per week and makes what is a decent enough wage for our family , his PROFIT is relatively low.....

Its all just confusing but hey ....we have another year or two to worry:rotfl:

Sixer

no-oneknowsme wrote: »

If thats the case then surely a lot of genuinely self employed people are going to suffer too ?

My Husband is self employed in a trade which has very high costs and allowable expenses . This means that although he (genuinely) works around 35 hours per week and makes what is a decent enough wage for our family , his PROFIT is relatively low.....

Its all just confusing but hey ....we have another year or two to worry:rotfl:

I honestly don't see it. How is your husband's profit not equivalent to his wage? Allowable expenses are what are necessary to run a business - they're not part of someone's wages.

covlass

My husband is self employed every thing looks good on paper, but in reality is different. Being a Sole trader Tax credits are worked out on the years profit which is more than his wages. Yes we get tax credits but only because we have a disabled daughter. I do not work I worked from the day I left school until the day my children were born, never claimed benefits, my husband has worked hard over the years building up his business with no help because he is old school and believes he should provide for his family. Are we rich? I wish !!!

I get CA but much prefer it if I could go to work

Nickynoo1

DaisyFlower wrote: »

Graham29 wrote: »

If we didnt have the benefit dependant culture we have where people can choose not to work children would not grow up to believe that having a child very early is the way of life. Stop the benefits for simply having a child and it will benefit the country in many ways, our teen pregnancy rate would drop, children would be no be born into casual relationships and growing up in a working household will install a work ethic into future generations. Stats show that most children raised on benefits go onto claim themselves, schools educate them but they see their parent/s not working and getting money and the latest gadgets etc so thay have no incentive to work.

Any change that stops people choosing not to work has got to be good.

So a country that has allowed people to become dependent on benefits suddenly withdraws its offer. Who would be most affected? The children! No child can be blamed for being born into poverty, don't they need protection? You can't just stop the payments because it didn't work out the way it was supposed to. the children are already here, and we as society surely have to support them? Something else needs to be offered for people to come off benefits.

Aytoun27

Becles wrote: »

Maybe "self employment" is too big a variable.

It may be better if it were split into "self employed A" who are people running businesses such as a shop or manufacturing something where they are actually building up a business.

Then "self employed B" for people who are doing Avon, dog walking etc, to earn pin money or to work restricted hours.

Each group could have appropriate rules on how benefits could be claimed.

Or would that not work?

I think that this is actually a very good idea, a system which splits the two groups might work very well all round. It shouldn't be forgotten that at present people who run very small businesses to bring a second income are required to register for tax/self-employment etc, since failure to do so can be seen as tax-avoidance/fraud by the authorites. Also it declaring this employment/income can affect entitlement to benefits such as income support and housing benefit. It isn't all about claiming tax credits, but I do think a split system would work better.

zaksmum

Nickynoo1 wrote: »

DaisyFlower wrote: »

So a country that has allowed people to become dependent on benefits suddenly withdraws its offer. Who would be most affected? The children! No child can be blamed for being born into poverty, don't they need protection? You can't just stop the payments because it didn't work out the way it was supposed to. the children are already here, and we as society surely have to support them? Something else needs to be offered for people to come off benefits.

Of course children will have to be supported! So if someone with 5 kids gets his sickness benefits stopped he will just be put onto another benefit. It's only those on means tested benefits who will lose out. Anyone who has no savings and simply cannot get a job will still be given enough to live on.