MSE News: Benefits shake-up to introduce Universal Credits

Graham29

ska_lover wrote: »

plumber2009 wrote: »

So my view is that single parents with children should get nothing as this this the root cause of the problem, not those looking for work.
QUOTE]

What is your problem with single parents Plumber? Why would you have them held destitute, but you seem to have no problem with those who are able, but not actually looking for work?

Please do not tell me that you believe the Vikky Pollard clap trap that you hear in the papers that young women get themselves pregnant as they aspire to be single parents living on benefits in a council flat?

Many single parents find themselves single as a result of what a an ex-partner has done to them- beat them, ran off with someone else etc. There are no guarantees in relationships that you will be forever. I don't think there are many people who plan to be single parents.

It really enrages me when I see people bashing single parents, as it is a hard enough job, without some old fashioned prejudices being thrown at them. Most single parents I know actually go to work and pay their own way in life.

In my opinion, the worst contenders are far more the immigrants that we support, illegal or otherwise we end up paying for the lot.

All the single parents I know (several) are in that situation as they have had children very quickly in a new relationship and not gotten to know the other person well enough, that is irresponsible. Help should be there for single parents who find themselves unable to provide, I don't feel they should keep getting more benefits for having more children though, contraception is free from the family planning clinic. Benefits need to be a lifeline for a short period, not a way of life for many years.

lazer

richpoortyke wrote: »

Oh and can IDS specify how many of those 500,000 jobs are actually full time and permanent?

SO many jobs in the Jobcentre are for less than 16 hours so in effect unable to sign off and receive tax credits. I think IDS does realise this so is the idea that if you do say 10 hours a week does this new credit mean you wont be classed as unemployed?
If so surely the employee will still need benefits. He wont be paying tax or national insurance either.
So what kind of improvement is this?

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

JuicyJesus

jojo90 wrote: »

Disagree. Spot on in my case.

£50k = £35k takehome = 30% tax. VAT is 20%. Seems straightforward to me and valid to say 'a working person is taxed 50%'

Percentages do not work that way. VAT does not work that way. You cannot add a percentage of one amount onto a percentage of a different amount and call them the same percentage.

Assuming you pay VAT on everything you buy with your remaining takehome pay (and that includes council tax and such, just to make things simple) you'd have bought 35ks worth of stuff at a 20% vat rate, so £35000/1.2 = the price of the goods before vat being roughly £29166, £35000-£29166=£5834 in VAT. Added to your 15k of tax you supposedly pay you pay £20834 - roughly 41%. And again, this is assuming that you pay 20% VAT on absolutely everything - food, energy, council tax, road tax, insurance, savings that you've put away, water bills, debt repayments, rent, mortgage payments, goods/services bought from unregistered businesses, the lot. That isn't the case.

So not straightforward and not valid.

Naughty_Noonoo

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

On paper, this may look appealling to those who have a genuine will to work. However, the vast majority out there will look at the maths (they are good at maths, I've seen them in the bookies!). They will come to the conclusion that they are working 10 hours a week for an extra £25 and decide that they simply cannot be bothered.

Jowo_2

staffsuk wrote: »

Hang on though - those people and their 'lifestyle' choices are not me!

I work over 40 hours/week - am single with no children (as such have to work 30+ hours/week to be eligible).

You mention people setting up 'bogus businesses' to claim Tax Credit - I assume from that you suggest they are in fact not working or generating an income?

Well - could you live on £205 / month??? That's all I am entitled to by way of any benefit / credit and there is NO WAY I could live on that alone!

I will net short of the threshold this tax year - but my business is growing slowly but steadily.

I absolutely could not have got to where I am now without the Tax Credit boost in the last two years.

Could someone tell me what incentive the new proposals present to GENUINE people who want to start out in business? Knowing they may not make much initially - or perhaps a loss...

.....

My original response appears to have been lost as they merged the posts.

I should have been clearer about what is meant by bogus businesses. I don't mean that they have been fraudulently set up and submit fake tax returns. I mean the amateur pocketmoney/hobby businesses.

Tax credits can cripple genuine business drive. The posts I have seen on this topic for those seeking tax credits are the antithesis of good business practice as they encourage the maximisation of expenses and the minimising of profit. A real entrepreneur seeks to minimise operating costs and maximise return. They will spend all their spare time to establish their business, not just switch off when the mythical or minimum 16 or 24 hour threshold for eligibility for tax credits has been achieved.

I wonder whether the HMRC and the govt have analysed and perhaps detected how many 'self-employed' tax credit recipients have coasted along without actually growing their businesses, content to indulge in a hobby with limited return to keep them in beer money and retain their benefits.

The Universal Credit isn't introduced for several years yet so legitimate businesses that have the potential for real returns will be able to benefit from the generous subsidies until they are self-sufficient.

The amateur businesses, which involve the odd bit of child care, a few dog walking rounds, selling moisturiser to the next door neighbour, will revert back to being the pin money they actually are rather than being a springboard into economic cushioning in the form of tax credits.

Those that can't make a living from it will realise that they do need to start making tangible profits from it, work longer hours, find more clients, cut costs and will perhaps decide to find proper employment for a proper wage where genuine goods and services are offered.

Many of the 'businesses' I see being discussed in relation to tax credits often do not require any major outlay to establish - catalogue distribution, child care, flogging tat on ebay, taxi driving and similar.

They can also be done around other paid employment until it is viable to do them on a full time basis - that's what many people do when they first start up in business anyway.

How did people used to manage to set up businesses before tax credits??!!

Sixer

Jowo wrote: »

My original response appears to have been lost as they merged the posts.

I should have been clearer about what is meant by bogus businesses. I don't mean that they have been fraudulently set up and submit tax returns. I mean the amateur pocketmoney/hobby businesses.

Tax credits can cripple genuine business drive. The posts I have seen on this topic for those seeking tax credits are the antithesis of good business practice as they encourage the maximisation of expenses and the minimising of profit. A real entrepreneur seeks to minimise operating costs and maximise return. They will spend all their spare time to establish their business, not just switch off when the mythical or minimum 16 or 24 hour threshold for eligibility for tax credits has been achieved.

I wonder whether the HMRC and the govt have analysed and perhaps detected how many 'self-employed' tax credit recipients have coasted along without actually growing their businesses, content to indulge in a hobby with limited return to keep them in beer money and retain their benefits.

The Universal Credit isn't introduced for several years yet so legitimate businesses that have the potential for real returns will be able to benefit from the generous subsidies until they are self-sufficient.

The amateur businesses, which involve the odd bit of child care, a few dog walking rounds, selling moisturiser to the next door neighbour, will revert back to being the pin money they actually are rather than being a springboard into economic cushioning in the form of tax credits.

Those that can't make a living from it will realise that they do need to start making tangible profits from it, work longer hours, find more clients, cut costs and will perhaps decide to find proper employment for a proper wage where genuine goods and services are offered.

Many of the 'businesses' I see being discussed in relation to tax credits often do not require any major outlay to establish - catalogue distribution, child care, flogging tat on ebay, taxi driving and similar.

They can also be done around other paid employment until it is viable to do them on a full time basis - that's what many people do when they first start up in business anyway.

How did people used to manage to set up businesses before tax credits??!!

I would also agree, and say again: a business start-up is a risk. The proper investment in and support for business start-ups should come from capital: for the small business this would usually be a bank, for larger or more risky ventures, this could also be venture capital/angels etc.

The benefits system shouldn't be insulating entrepreneurs from risk. It's not the right vehicle. Businesses should be financed from capital. People in need should be supported by benefits. They're not the same thing at all.

However, I'll also say again: there are far too many jobs out there that aren't really self-employment at all, and which skirt the rules. I'm thinking home-based call centres and the like. If the government wishes to crack down on one side of the equation, they should also crack down on the other. I'd like to see an end to these dodgy "self employed" jobs that are actually a cover for employers to avoid NMW, NICs, holiday pay etc.

Becles

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?

tifo

An investigation service and regional taskforce will investigate every claim in high fraud areas

So everyone in one of these areas gets 'tainted' as a possible cheat?

melbury

Naughty_Noonoo wrote: »

On paper, this may look appealling to those who have a genuine will to work. However, the vast majority out there will look at the maths (they are good at maths, I've seen them in the bookies!). They will come to the conclusion that they are working 10 hours a week for an extra £25 and decide that they simply cannot be bothered.

But surely that is where the whole thing has gone wrong. People should not have the option of whether or not they are bothered, they should always be better off working. So it certainly seems that benefits are way too high and should be cut significantly rendering any employment an attractive option.

Naughty_Noonoo

melbury wrote: »

But surely that is where the whole thing has gone wrong. People should not have the option of whether or not they are bothered, they should always be better off working. So it certainly seems that benefits are way too high and should be cut significantly rendering any employment an attractive option.

I totally agree with you!