Universal Credit for [merged]

Sixer

seven-day-weekend wrote: »

Thanks, I think I understand it now for people in work, or unemployed.

What happens to people who are off sick?

And do I understand correctly, that in a couple if one earns twice the NMW @35 hours, then the other is not required to look for work?

So my son (whose contract is 29 hours at just over minimum wage) and his girlfriend (who does 35 hours at NMW) , with no children, would have a condition built in that one or both of them would have to look to earn a little bit more if they required any of the Benefits that go into the UC? Is that correct?

As I understand it, yes.

But quite how they intend to impose "signing on" style conditionality to someone who is working 29 hours, I can't imagine. The capacity to search for work is quite clearly diminished in comparison to someone who isn't working at all.

Sixer

BigAunty wrote: »

I know. It's about time it was tackled. I've lost count of the amount of self employed people posting benefit related queries on this forum because of low profits. I query how they are doing versus their business plan and not one poster has acknowledged producing one.

So I get the impression that they launch into a 'business' without any kind of basic research into competitors, marketing, cash flow, estimated profit and expenses...

In other words, instead of planning for success and seeing if it is even feasible for them to earn an income, they simply walk blindfolded into failure.

I'm no Tory but I think this is a typical example of the way the last Labour government turned a blind eye to loopholes like this because they accidentally provided a solution to an entirely different problem.

In this case, it's seed capital for small start-up businesses. A properly-functioning economy will have this available for realistic enterprises. Since the credit crunch, of course, ours hasn't. Tax credits effectively provided this capital, even though they were intended for something entirely different, and there was therefore less need for the government to go head-to-head with the banks.

So start-up capital costs were essentially socialised by the back door.

The flipside, of course, is that capital has been provided for entirely unrealistic "businesses" such as eBay accounts and Avon rounds that banks would never have touched even if they were lending.

I think this will close down some ludicrous tax credit claims. But the downside is that it will stifle growth even further.

Marisco

So those in work, but are not earning the required amounts, will be expected to get another job or get one that pays more, is that right? If so that is ridiculous! People cannot get one job these days, never mind 2! And what about the people who have no aptitude for training or "bettering" themselves, or to put it nastily, are as thick as two short planks, what happens to those? In the past large industries would "take up the slack", but now even the most humble job requires qualifications!

I can see the thinking behind it, but before they implement something like this, then they need to sort out the unemployment problem! If there were plenty of jobs for people to apply for, this would work well as there would be no excuse for not having a job, but expecting people to get 2 jobs, never mind one is unrealistic in the current climate!

If they are going ahead with this, then why don't they raise the NMW as well, because if one person is going to have to look for 2 jobs, then it's going to leave even less jobs available to others! Or either lower the threshold so people don't have to have two jobs to qualify!

Sixer

Marisco wrote: »

So those in work, but are not earning the required amounts, will be expected to get another job or get one that pays more, is that right? If so that is ridiculous! People cannot get one job these days, never mind 2! And what about the people who have no aptitude for training or "bettering" themselves, or to put it nastily, are as thick as two short planks, what happens to those? In the past large industries would "take up the slack", but now even the most humble job requires qualifications!

I can see the thinking behind it, but before they implement something like this, then they need to sort out the unemployment problem! If there were plenty of jobs for people to apply for, this would work well as there would be no excuse for not having a job, but expecting people to get 2 jobs, never mind one is unrealistic in the current climate!

If they are going ahead with this, then why don't they raise the NMW as well, because if one person is going to have to look for 2 jobs, then it's going to leave even less jobs available to others! Or either lower the threshold so people don't have to have two jobs to qualify!

They will be expected to prove they are LOOKING for more or better paid work, rather than actually HAVING it. If you see what I mean.

I agree that a time of high unemployment is not a good time to be implementing something like this and I dislike many of the details - but broadly speaking, I'm in favour of the principles.

I dislike NMW. Either set it at a level that doesn't require welfare payments to top it up and risk higher unemployment, or scrap it altogether and risk failing to deal satisfactorily with exploitative employers.

One possible beneficial consequence: as people will need to at least TRY to work more, we may find full-time vacancies increase and the current proliferation of part-time vacancies decrease. Employers will be less incentivised to advertise part-time jobs and avoid employer NICs contributions (payable on over £136 per week) and employees will be much less keen to take them (due to conditionality in UC).

Killmark

Sixer wrote: »

Employers will be less incentivised to advertise part-time jobs and avoid employer NICs contributions (payable on over £136 per week) and employees will be much less keen to take them (due to conditionality in UC).

What I think you'll find is that those types of jobs will still be available but will be taken up by young people who live with their parents or are students.

It will help tackle 18-24 unemployment whilst encouraging employers to offer work that isn't effectively subsidised by the state. Ofcourse this means that parents may end up doing so instead but it will be their choice to, not the taxpayers.

On the NI side:

e.g currently 16hrs @ £6.06 = £96.96 which means no employer/employee NI contributions or income tax is put back into the system.

So in many cases people on NWM who get tax credits doing 16 hours (in part due to contracts they are offered) put nothing back in to the state, except through VAT or other such taxes and yet drain the greatest amount.

Marisco

Sixer wrote: »

I dislike NMW. Either set it at a level that doesn't require welfare payments to top it up and risk higher unemployment, or scrap it altogether and risk failing to deal satisfactorily with exploitative employers.

I agree with the first but not the second! The problem with scrapping it in the current situation is that employers will exploit it to the hilt!! And if the unemployed do not take up the jobs, they will be sanctioned by the Jobcentre, even if it's £3 ph!! Which means even more people will fall into the UC trap, benefits should not be a subsidy for employers who don't pay decent wages, as it is at the minute! Employers don't need to pay but the bare minimum, as they know benefits will make up the difference, that cannot be right. I don't know if the new system will make any difference to that though, probably not. It just seems to put the onus on the unemployed and not on employers:(

I agree with you that if it does away with all these part time jobs and emphasis is put on full time posts, it can only be a good thing. On our local job site, it's awash with jobs for just a few hours a week! It would cost more in travelling costs than what you earn!! Never mind the hassle if you have kids and no set hours. Mind, I don't envy the poor sod that has to sort it all out, they are not going to win, no matter what they do!!

Sixer

Marisco wrote: »

I agree with the first but not the second! The problem with scrapping it in the current situation is that employers will exploit it to the hilt!! And if the unemployed do not take up the jobs, they will be sanctioned by the Jobcentre, even if it's £3 ph!! Which means even more people will fall into the UC trap, benefits should not be a subsidy for employers who don't pay decent wages, as it is at the minute! Employers don't need to pay but the bare minimum, as they know benefits will make up the difference, that cannot be right. I don't know if the new system will make any difference to that though, probably not. It just seems to put the onus on the unemployed and not on employers:(

I wasn't really saying I thought one or the other should happen. More that what we have now is the worst of both worlds. Either world would be better than the one we have. Your way would result in lots more people on the dole. The other way would result in some higher and some lower wages (NMW acts to uplift "slave labour" rates but to depress skilled and semi-skilled labour rates).

Killmark

Sixer wrote: »

I wasn't really saying I thought one or the other should happen. More that what we have now is the worst of both worlds. Either world would be better than the one we have. Your way would result in lots more people on the dole. The other way would result in some higher and some lower wages (NMW acts to uplift "slave labour" rates but to depress skilled and semi-skilled labour rates).

I completely agree with this statement.

I think NWM should rise by between 5-10% each year until a living wage is achieved and then be tied into RPI with yearly increases. Yes it would likely result in higher unemployment, however it should reduce the cost of welfare. I'm not convinced that by increasing NWM that their would be significantly higher unemployment as imo if your business can't survive when paying a living wage then it isn't competitive in the long run anyway.

BigAunty

Marisco wrote: »

So those in work, but are not earning the required amounts, will be expected to get another job or get one that pays more, is that right? If so that is ridiculous! People cannot get one job these days, never mind 2! And what about the people who have no aptitude for training or "bettering" themselves, or to put it nastily, are as thick as two short planks, what happens to those? In the past large industries would "take up the slack", but now even the most humble job requires qualifications!

Despite my reservations about tax credits, I am also worried about job opportunities.

However, benefits like tax credits, income support for lone parents until their youngest child turned 16, incapacity benefit, all merely disguised unemployment.

At least there will greater transparency now and hopefully the govt will turn to better job creation policies now the techniques used to conceal unemployment are being scrapped.

So I'd like to see schemes like UC go hand in hand with actual policies to improve the labour market.

But to be honest, whenever, I see posts that 'there are no jobs', there is plenty, but they get snapped up by migrants - the proportion of UK born in employment decreases but it is not matched by overseas born.

Killmark

BigAunty wrote: »

However, benefits like tax credits, income support for lone parents until their youngest child turned 16, incapacity benefit, all merely disguised unemployment.

At least there will greater transparency now and hopefully the govt will turn to better job creation policies now the techniques used to conceal unemployment are being scrapped.

And under UC no one is unemployed, they just aren't earning enough and so receive welfare if meeting conditionality.

This is another example of the government fudging unemployment statistics.

Having said that attempts at creating jobs either via the public sector or subsidies has repeatedly proven ineffective, if you want to create jobs then cut corporation tax to 10% and offer companies relocating to the UK a 1 yr corporation tax rebate after being in the UK for 5 years.