No point working - why not just go on benefits?

ukcarper

ILW wrote: »

So if you earn 15k a year, you take home £25k after tax.:huh:
What sort of crazy system is that, I am sure it was not like that 30 years ago when i started working.

It does seem odd I did use quite a high rent £200 a week but working tax credit + child tax credit is £123 while tax ans ni paid is £52 meaning even without LHA you bring home about £18k.

ukcarper

ukcarper wrote: »

It does seem odd I did use quite a high rent £200 a week but working tax credit + child tax credit is £123 while tax ans ni paid is £52 meaning even without LHA you bring home about £18k.

You could argue that the person only gains £300 a month out of the £15k he earns so is taxed at about 75%.

SD-253

B_Blank wrote: »

The following reasons make me think benefits is better than work financially:

1, High (and rising) cost of commuting to work eating into profit from going to work. Being on benefits will mean you wont have to commute to work..

A single person gets £65 on the dole. If they are not staying with someone they will have there rent paid but will never get more than 1 bedroom flat probably a studio flat. They will not have to pay council tax.
So bottom of the rung benefits recipient looking at the equivalent of £65 + £65 (depends where you live) + £12 council tax = about £142
Of course sickness etc will get you more. Children on the other hand won't get you anything unless you fail to feed and clothe them properly. NOTE Tesco are having problems with kids stealing underwear and sandwiches? What children get you is longer on the dole IE you can avoid taking a job for longer.

B_Blank wrote: »

2, Benefits are linked to inflation and wage growth is lagging behind inflation. Thus, you are assured more of a pay rise if you are on benefits. Another reason to just go on benefits...

Benefits are linked to CPI not RPI. CPI is Basicly RPI-X where X is mortgage interest rates. Probably an accurate measure of inflation for people on benefits. At this point in time wages are lagging inflation but that is very rare and is inheritably recessionary if it lasted for a long period of time as the average person would be spending less each year.....the definition of a recession.

B_Blank wrote: »

3, Less stress - you dont have to get up at 6 am everyday, and then only get home at 7pm when you are on benefits. Just pop down to the job centre every so often and scribble some rubbish on an application form and you will be assured of getting a nice little income....

The way to deal with this problem is simply A/ I get £150 for doing nothing......well then give them something to do. If you had to go and clean the streets everyday for your £150 then you would look for alternatives work. Note To those people who say how hard working the Poles are, at the end of this year all the 8 eastern European countries who joined the European Union will be allowed to receive benefits in any country in Europe. The Roma’s have stated constantly that the UK is there first choice of call for benefits. Will we be able to afford this?

B_Blank wrote: »

Seriously, why would anyone work in an average £15k a year job 15 miles from them home? It will cost them a fortune to get there and they wont get any wage increase. Whereas if you go on benefits you can just sit in your house (not waste money on petrol) and get access to a benefits system protected from inflation.

Have you tried moving closer to work? the statement "average £15k a year job" makes it sound like your do not like your job? Your forum views are therefore more to do with your crappy (implied by "average £15k a year job") job and nowt to do with anything else??

B_Blank wrote: »

Also there is no point working hard and saving because the government will just screw you with high inflation and low IR and make sure that your savings are ground down to dust.

No government wants high inflation it is one of the measurements most people judge a government on and therefore wherever they stay in power or not. It is very very rare for savings rates to be lower than inflation and it will not last long term. By the way option 1 save for a year at 4% interest with inflation at 5% or option 2 borrow the same amount of money at 10% interest uhmmmm I know what I do.

B_Blank wrote: »

Also, if you get old an dhave no savings the government will pay for everything you need, whereas if you have savings they will make you pay for it yourself. Saving is pointless in the UK. It is better to spend as much as you can as often as you can, and to not worry about preparing for a rainy day. When the rainy day comes other people who prepared for it will fit the bill for you so its ok.

There is some truth in this for people on low wages. If you retire with no pension the government will top up your state pension from £96 to £132 and if you don't own your own home pay your rent. Now someone on a low wage would be a fool to struggle to pay into a pension and buy a house. Someone retiring now with a pension of say £36 a week is no better of and if you own your own house you will have higher costs. That said you are in effect predicting the future i.e. the states ability to pay these benefits at the time you retire??

B_Blank wrote: »

COnclusion = unless you earn £20k+ a year then you should just give up and go on benefits. IF you earn maybe less than £30k a year but have to travel to work then you should also just quit and go on benefits, maybe even have a few kids (the more the better chance you have of rinsing the system). That is my advice on how to make it in the UK
Good luck.

I still have that feeling this is more a rant about your job than the present economic circumstances, yours or the country’s. The math’s though is not horrendously out depending on where you live AND HOW MUCH YOU HATE YOUR JOB??

Dave101t

but the benefit class around me arent 'down on their luck' types, needing a bit of help whilst finding a new job, they are all just plain scumbags. who wants to be a scumbag?

he says, while he is late for work....ulp!

lazer

ukcarper wrote: »

Just done a check on entitledto to see if it was worth a 24 year old where I am not working and going on benefits. He would get £51.75 income support and £80 LHA towards the cost of a room in a house share per week.

Don't forget - they will also get their council tax paid - £20 a week sound reasonable)

So therefore their total income is £152.

And if the same person was working 29 (ie: not enough for tax credit). hours a week at £6 an hour he would be get £157 in wages plus £14 in housing benefit (ie £171)
So the difference is £20 a week, which at £4 a day wouldn't even cover the cost of commuting - never mind the additional costs of being in work.

Percy1983

Another simple solution is stop paying people to have children, any child related benefits should stop at 3 children, we have enough people in this country already.

michaels

I'm sorry - I still can't get past the fact that the effective marginal tax/tax credit withdrawal rate for a family with 3 kids going from 23k to 24k is 73% before taking account of any loss in other allowances. Compare this to the big debate about top earners paying 50% - and that is before any account is made of the fact that a 1k increase on 23k is proportionately (and actually) much more significant than 1k on 150k.

I don't know what the answer is but it sure looks like a problem to me!

Blue22

michaels wrote: »

I'm sorry - I still can't get past the fact that the effective marginal tax/tax credit withdrawal rate for a family with 3 kids going from 23k to 24k is 73% before taking account of any loss in other allowances. Compare this to the big debate about top earners paying 50% - and that is before any account is made of the fact that a 1k increase on 23k is proportionately (and actually) much more significant than 1k on 150k.

I don't know what the answer is but it sure looks like a problem to me!

Can I just point out that the marginal withdrawal rate you highlighted is not confined to a family with 3 children. The 73% withdrawal rate is the same for every basic rate tax payer claiming WTC/CTC.

Btw this withdrawal rate is due to increase to 76% when Universal Credits are introduced.

wotsthat

michaels wrote: »

I'm sorry - I still can't get past the fact that the effective marginal tax/tax credit withdrawal rate for a family with 3 kids going from 23k to 24k is 73% before taking account of any loss in other allowances. Compare this to the big debate about top earners paying 50% - and that is before any account is made of the fact that a 1k increase on 23k is proportionately (and actually) much more significant than 1k on 150k.

I don't know what the answer is but it sure looks like a problem to me!

It is a problem but I don't think low earners spend too much time worrying about marginal tax rates. It's as much about attitude as anything - if two people earning £23,000 are offered £1000 overtime they'll only pocket £270. One decides to turn it down - it's not worth it. The other does it - the likely result is that this person is more likely to be given the opportunity for promotion etc.

ukcarper

lazer wrote: »

Don't forget - they will also get their council tax paid - £20 a week sound reasonable)

So therefore their total income is £152.

And if the same person was working 29 (ie: not enough for tax credit). hours a week at £6 an hour he would be get £157 in wages plus £14 in housing benefit (ie £171)
So the difference is £20 a week, which at £4 a day wouldn't even cover the cost of commuting - never mind the additional costs of being in work.

So what is the solution if you want to progess in life you have to take the job and hope for more hours unless you are content to live on £50 a week.