Diverting £50k of salary into pension fund to claim welfare benefits

Nine_Lives

Everyone will have their own opinion on this. Nobody is "right" as such.

Personally, i don't think people should be mad at the OP. I don't agree with their mindset, but it doesn't make me mad at THEM. Assuming it's all legal & A-ok, it's not the OP at fault - it's the system for allowing itself to be exploited in such a manner. There should be measures to stop this mindset.

xylophone

I am wondering whether this scheme might be regarded as "deprivation of capital or income" under the "notional" capital and income rules?
Also, with regard to Housing/council tax benefit see "Do you ignore any of my earnings?" in http://www.sevenoaks.gov.uk/council_democracy__local_services/council_tax_and_benefits/benefits/629.asp

gadgetmind

"From each, according to his means, to each, according to their needs"

The problem with this socialist mantra is that a minority of people honestly think that they are very very needy, and that anyone with more means than they have should be hit with confiscatory taxes so that their own lavish (but genuine) needs can be suitable pampered.
Trim back benefits, slap on a sensible per-household cap, and the OPs cunning plan would be toast.

gadgetmind

xylophone wrote: »

Also, with regard to Housing/council tax benefit see "Do you ignore any of my earnings?" in http://www.sevenoaks.gov.uk/council_democracy__local_services/council_tax_and_benefits/benefits/629.asp

They say "half of any money you pay into a pension fund" - no mention of employer's contributions, which the OP was going to use for 100% of their pension payments.

"Dear Housing Benefit People. I don't earn much, and am very skint. My employer does put a few quid into my pension every month but I don't put anything in myself as I'm skint. Will I still get the housing benefit that I so richly deserve?"

mishoo

Gracchus_Babeuf wrote: »

Interesting post. How on earth could you live on £12k a year? Are you not planning on ever having a mortgage?

Incidentally, what job do you do?

I lived on less than that while my children were at uni as fortunately had some savings I could draw. Made damn sure I made max pension contribution for those years to give me no income.

thistledome

Careful what you wish for, OP. There are any number of reasons why you could suddenly find yourself living on state benefits, some of them entirely beyond one's control and very unpleasant.

If you're lucky enough to earn £65k a year then count your blessings and be happy that you're paying your own way.

gadgetmind

thistledome wrote: »

If you're lucky enough to earn £65k a year then count your blessings and be happy that you're paying your own way.

And paying the way of loads of other people too.

Until he rebelled.

shadydaz

gadgetmind wrote: »

Minimum required?



Trigger points are bad but rare.



Too high, but I guess you knew that already.



Even for those nasty people on >£100k?



Ah, so effective 62% tax after £100k.



And too much tax (which includes your 62%) is counter-productive as we're seeing with the OP. People get to breaking point and either find creative solutions or leave in search of greener pastures.



As your taxation policies will ensure that you'll never be in a position to impose them on anyone, who cares?

It's just an idea, a variation based on our current system, no need to take it so seriously...and to re iterate a point I made in an earlier post, I have no need to be resentful or jealous of other peoples earnings, even those hallowed mortals who earn £100k or more.

Just to humor you though, the net result would actually be a 56.25% total deductions prior to any salary sacrifice.

Of course there is not a 50% tax rate in operation but that is ok, change the increments 1% every £3 over £40k capping @ 40% at £98k and over. The total deductions would be 46.8% prior to any salary sacrifice schemes. Would this be a more realistic adaption of the current system for you to bear? :cool: Don't worry I still won't count on your vote, now excuse me but I have some campaigning to do:rotfl:

shadydaz

gadgetmind wrote: »

Trim back benefits, slap on a sensible per-household cap, and the OPs cunning plan would be toast.

Exactly the point I was trying to make in my example...

xylophone

gadgetmind wrote: »

They say "half of any money you pay into a pension fund" - no mention of employer's contributions, which the OP was going to use for 100% of their pension payments.

"Dear Housing Benefit People. I don't earn much, and am very skint. My employer does put a few quid into my pension every month but I don't put anything in myself as I'm skint. Will I still get the housing benefit that I so richly deserve?"

I thought the OP said he was going to put in £50000 per annum himself?
"(Adding all those figures up and of course these are just very rough estimates, I make that out to be around £3100pm. £3100 vs £3300 is no real drop in standard of living but yet I am putting away £55.2k into my pension fund each year (£50k self, £5.2k company(8%) ) £55.2k rising with inflation each year for the next 30yrs or so will give me a pension pot in the millions and allow me to retire early at 55.)"