Cutting the Welfare Bill

bob_a_builder

Can't understand how or why this proposed cap is being set an 26k, which is equal to earning a salary of 35k - which as far as I know is not the UK average pay - 26k gross is the average (isn't it ?)!

One good point brought up against the bishops argument
i.e. ' will no one think of the children' - lets exclude child benefit from the cap
someone pointed out that the average 'vicar' salary was 22k ( gross?) - "do unto others as ....."

+ I wish they would make it clearer, whenever pay/salary is being discussed - are they using the gross or nett figure

kabayiri

Generali wrote: »

I think a lot of posters are missing the point.
...

I think we are seeing the classic 'Bar Room Brawl' that you see in these comedy Westerns.

Everyone is fighting with the person next to them; nobody seems to know who started it but they don't really care, as long as you win your own mini battle.

...meanwhile the perpetrators skulk off out of the corner of the room, last intact bottle of whisky safely tucked under their jacket.

drwho2011

Generali wrote: »

If you want to reduce spending on welfare there's no point in messing about with single mothers or Jeremy Kyle watchers or whatever group of scroungers you happen to find offensive. Spending on old people is the biggest item by far and to ignore it is to ignore the biggest part of the problem.

There is an investing truism that every now and again you should look at your assets and ask yourself, if I had the money instead of the asset would I still buy? If not perhaps you should sell.

Maybe we should consider the unemployed an asset, after all they only need one kidney...................

Joking aside though I think the entire welfare state needs a rethink, steps could be taken that would tackle the LHA/HB bill and one of those would be to set them at 30% the median rate nationally, as opposed to locally, then tie them into inflation and let market forces do their thing.

Tax Credits redesigned so you could only claim back (child care costs) what you had paid in Income Tax within that tax year. I suspect this will push up wages and discourage employers from dodging NI by offering 16hr contracts because at the moment employers know that if your over 25 the state will subsidise your employment.

These two changes would have the biggest effect on encouraging people to better themselves.

Scrap DLA, AA and the Winter Fuel Allowance and all non-contribution/non-income based benefits.

Once this is tackled then its time to look at pensioners.

Kennyboy66

StevieJ wrote: »

I am not sure that the triple lock is meant to increase the burden when compared to the previous incarnation i.e. guaranteed RPI increase.

The reason why I think it will increase the burden is this;

The triple lock means that pensions should increase by the minimum of CPI, avaerage earnings and 2.5%.

I appreciate that CPI is not normally as high as RPI, however, take any reasonable period and average earnings normally increase faster than RPI (otherwise we would all be getting collectively poorer).

In addition there are likely to be years when both RPI and CPI are below 2.5%.

lisyloo

Can't understand how or why this proposed cap is being set an 26k

This is not anywhere near what an average unemployed person would get. Indeed sme get £50 per week.
Many near the cap would be living in London, with a big family and possibly dissabilities as well. This is the max which is the top amount for the "worst" or shall we say most needy cases. It isn't the amount for a single healthy person which is some cases is 10% of that.

I was looking at the figures last night on the BBC and only about 40% of those on benefits are able to work. The rest are either on the sick or supported because they cannot work due to caring responsibilities.
So the majority of people on benefits cannot work anyway, it's only 40% would are able to work.

drc

lisyloo wrote: »

This is not anywhere near what an average unemployed person would get. Indeed sme get £50 per week.
Many near the cap would be living in London, with a big family and possibly dissabilities as well. This is the max which is the top amount for the "worst" or shall we say most needy cases. It isn't the amount for a single healthy person which is some cases is 10% of that.

I was looking at the figures last night on the BBC and only about 40% of those on benefits are able to work. The rest are either on the sick or supported because they cannot work due to caring responsibilities.
So the majority of people on benefits cannot work anyway, it's only 40% would are able to work.

Not necessarily true. In London, a fairly average out of work family consisting of 2 adults and 2 kids will now reach the cap, mostly because of housing costs. I posted this before but in London this would cost;

Housing benefit - 2 bedroom rate (or 3 if different sexes/ages)= maximum of £290 - £340.
Income support/Jobseekers allowance= £105.95
Child tax credits= £108
Child benefit=£33.70
Council tax benefit= approx £33
Free school meals= approx £2 per day so £20 per week.

Total = £589 per week.

Not including any disability/sickness benefits or other benefits like free prescriptions/free dental/free school trips and various other little add-ons.

bob_a_builder

How can you be paid tax credits if you aren't paying any tax ?

Kennyboy66

bob_a_builder wrote: »

How can you be paid tax credits if you aren't paying any tax ?

there are 2 types of tax credit. Child Tax credit and working tax credit.

Child Tax credit is nothing to do with having to work (or pay tax).

purch

Child Tax credit is nothing to do with having to work (or pay tax)

Yes, not only did Nuevo Laborismo devise the most deviously complicated and in many cases unequitable benefit possible, they also failed to give it an accurate name :eek:

drwho2011

bob_a_builder wrote: »

How can you be paid tax credits if you aren't paying any tax ?

Through child tax credits.

Approx £50 per child per week (even if not working) and up to 70% of your childcare costs, once you exceed the initial threshold they start to be tapered.

To give you an idea, if you have 2 children and then if 1 adult is working (under 25,000) and the other a stay at home parent then they will likely receive tax credits which would make up a good proportion of 1 parents lost wages.

As the taper is 41% (on your gross income) it means with Income Tax and NI then for every £1 earnt over the threshold then you will lose 71p after taxation and the loss of tax credits so in effect working for NMW means you will see income increase at £1.75 per hour.

Which leads to the argument of, "Why should I work harder for only £1.75 an hour?"