Cutting the Welfare Bill

drwho2011

Pennywise wrote: »

Not necessarily earning minimum wage. What about teachers & nurses who only work 1 or 2 days per week. They may only earn £8k p.a. but on an hourly rate far above minimum wage. What about administrators who may be working 2-3 days per week, again over NMW?

In London a teacher or an experienced nurse working 2 days a week would be earning £10,000 a year before tax.

However they are paid a rate representative of their knowledge, skills and training.

Most public sector administrators outside of London aren't paid much above national minimum wage. If they are local governement employees then their pensions are funded.

If a civil service administrator is working 2 days a week that's £5,400 a year and the maximum pension would work out about £2,700 per year on retirement.

Pennywise wrote: »

At the end of the day, automatic state funded pensions are simply not affordable if we continue down the road of so many people not actually paying enough (if anything) in tax/nic towards them.

If people are managing to live on working 1,2, or 3 days per week, and thus not paying much in tax/nic, then rather than an automatic state pension, why not a pension pro-rata-d to their earnings or working days, i.e. instead of an automatic £130 as proposed, reduce that to £65 for those who've only worked an average of 2.5 days per week during their working lives.

They still need to earn £140 per week to qualify for the state pension, so hourly rates would need to be £17.50 ph (1 day), £8.75 (2 days), £5.83 (3 days) assuming 8 hour shifts.

This would disproportionally effect women as they are more likely to work part time hours for child care reasons.

Could you imagine how a pension based on £1,140 made in contributions would be? (as per my example based on working 24hrs at NMW)

Pennywise wrote: »

It simply isn't right, nor affordable, for people to receive more in pension upon retirement than they earned whilst working. It's a complete nonsense and can't last much longer.

The end game is inevitable in that state pensions will have to be means tested. It may not happen in the next decade or two, but unless there are major changes in the tax/nic/benefits/pensions system, the whole pyramid scheme will come crashing down as it's all out of control and there is precious little political will to tackle it.

I agree which is why I think the state pension should be means tested. In the vast majority of cases under the current scheme people will receive more in pension upon retirement then they will put in and this is paid for by higher taxes collected from average wage earners and above.

Making it proportional to what people put in simply won't work because of the way the welfare state has been developed to keep hours and wages down through state subsidies i.e Tax Credits

You would have millions of "poor" people who have been subsidised by the state all their lives whining about how unfair it is that the "rich" get good pension payments and they don't.

Ultimately we face three options.

1. Have our children pay for our pensions (current system)
2. Means test the state pension.
3. Have variable state pension based on NIC's (with which the poorest pensioners will still require top ups and so defeat the purpose).

dtsazza

StixUK wrote: »

The point I am trying to make is that the rich are greedy, always playing the markets and games to achieve further wealth and control over their lives, they use tax loopholes and accounting methods to further increase their wealth and self-importance. How can you berate the poorest for wanting the achieve the same, except it is based on an entirely different level (i.e income).

I agree with you there - and on the whole I'm not angry at all at the benefit claimants who are cleverly getting the best they can out of the system. Rather, I'm angry at the system itself for being so generous - which is exactly why I'm in support of these reductions to the amount of other people's money that the government splurges on their behalf.

Of course, if someone is making fraudulent claims then I'd like to see them punished just as much as someone who's evading paying tax. But I have nothing against those that use their initiative to employ tax and benefit "loopholes" to their best advantage - the only solution is to fix the system.

dtsazza

Generali wrote: »

As oodles of posters have worked out (or Googled - naughty!) the biggest single line item is pensions and associated costs. Add to that things like care costs and you have over half the welfare spend going on aged care of one sort or another.

The solution according to Labour was to increase pensions. The solution according to Tories and Lib Dems is increasing pensions. I know most MPs are arts grads but can they really not count???

Fundamentally the only responsible way out of this is to ditch every sort of DB pension scheme. Staking financial survival on a guess of what the markets, gilt yields and life expectancies will be in 20-50 years is imprudent at best. And that's even if none of the governments fall into the trap during that period of spending the NI contributions instead of managing them to provide the promised pension income in future.

If the contributions were fully ring-fenced (by year or even individually) and used solely to provide the pension income, that would work. Although at that point I can't see what added bonus the government brings to the scheme, over putting your contributions directly into a personal pension (or company scheme).

Fundamentally I don't think state pensions are a good idea. It will be politically very difficult to repeal them, because of the media effect of huggable grannies, but on a rational level I would be glad if it was somehow pulled off, and would feel that the country had been put on a more sustainable footing.

Graham_Devon

Loved the interview on the BBC, they had to have picked her to get the nations backs up.

She comes on and states "Why should I give up a good standard of living, to move elsewhere, where I don't know anyone". Theres no real reason for not giving up what she has....but why should she.

Love that she calls it a good standard of living, and love how she feels completely entitled to it.

Anyway, the government have won the first round in the lords, defeating labours call to exempt people who get over the proposed cap amount (or in other words, stop the cap, as a cap is no good if you are simply going to exempt everyone over it!!!)

So now labour are trying to stop child benefit being counted, but its stated that would be pointless, as it would simply raise the cap, maybe up to a £50,000 cap in some cases.

FOX_HOUND

Graham_Devon wrote: »

Loved the interview on the BBC, they had to have picked her to get the nations backs up.

She comes on and states "Why should I give up a good standard of living, to move elsewhere, where I don't know anyone". Theres no real reason for not giving up what she has....but why should she.

Love that she calls it a good standard of living, and love how she feels completely entitled to it.

Anyway, the government have won the first round in the lords, defeating labours call to exempt people who get over the proposed cap amount (or in other words, stop the cap, as a cap is no good if you are simply going to exempt everyone over it!!!)

So now labour are trying to stop child benefit being counted, but its stated that would be pointless, as it would simply raise the cap, maybe up to a £50,000 cap in some cases.

I haven't seen what you're referring to but I can picture it in my mind.

drc

FOX_HOUND wrote: »

I haven't seen what you're referring to but I can picture it in my mind.

I think this is the one he means;

http://www.bbc.co.uk/news/uk-politics-16676340

Graham_Devon

drc wrote: »

I think this is the one he means;

http://www.bbc.co.uk/news/uk-politics-16676340

That'll be her.

Why should this cruel government do this to her?

[Deleted User]

lvader wrote: »

It might not make a huge difference to the total figure but the cap is the biggest priority for me, it is rediculous that someone not working and on benefits can take home as much as someone paying high rate TAX.

and some only take home 10% of that figure in benefits,only 50,000 families get more than the proposed cap of £26k,mainly due to HB/LHA in the south east

drc

woodbine wrote: »

and some only take home 10% of that figure in benefits,only 50,000 families get more than the proposed cap of £26k,mainly due to HB/LHA in the south east

50,000 too many.

DMFR

I was listening to Radio 5 while I was driving home from work.
Peter Allen was interviewing a woman who receives £600pw in benefits. He asked her about her circumstances and she replied that she has 7 children from the ages of 1 to 18 years old. Her first husband died suddenly when she pregnant with child no.6. She re-married and had another child. Both parents do not work.

That would mean she receives £31,200py after tax.