Universal Credit

FBaby

HappyMJ wrote: »

Are you sure? The family element is £545 and the child element is £2,555 per child per year (increasing to £2,690 in April). They won't get working tax credits as they don't work. That is £631.50 every 4 weeks for 3 kids (increasing to £662.70 in April).

If they have more money than you maybe you should look at what income and expenses you have. The may just appear to have more money than you but it may just be an illusion.

Child tax credits and working tax credits can be paid to a couple who both work full time.

I think most people are still very ignorant to the fact that a single parent of 2 young children is much more likely to be better off financially than a working family (single or not) earning enough not to be entitled to tax credits.

It's not just about income that is received (either through benefits or salary), but very much about the expenses that come with working compared to being a SAHM.

I have compared once with a very close friend of mine (who had nothing to hide), single mum with a mortgage and two young children, and me, at the time single mum of children under 6, working full-time, earning around £40K and a mortgage (similar mortgage). It was shocking for both of us to realise that our disposable income was similar (as a matter of fact, hers was higher because she claimed DLA for one of her child, along with extra disability benefits with tax credit), even though her child was in main stream school and she admitted herself she didn't have any costs specific to his disability, but that's another matter).

The main reasons were the mortgage payments, the fact that I had to pay £350 a month childcare (might have been more at the time), and travel costs, all costs that she didn't have, so at the end of the month, once all my bills were paid, I was left with no more to play with than her.

Of course, there was then al the things that she got than I didn't....more time to enjoy the kids, no stress from a pressurised job, not having to get up at 6am and drop the kids to school at 7:30, not having to fit in a few hours in the evening what she had all day to do, not falling into bed at 9pm every evening and not spending all week-ends during chores...

It is no surprise that single parents find no incentive to get back to work. The longer they get to enjoy a similar lifestyle on benefits than they would working, the more unemployable they make themselves. It is no surprise that once their younger child reach the age when they might have to look for a job, they see having another child as an easier more pleasurable alternative.

The only thing that kept me going at the time was pride and knowing that I was teaching my kids right and that I was investing in our future, but even this at times when I was so shattered I cried in frustration felt bittersweet. My kids are now 9 and 12, and I do live with a partner and life is much easier, I can now look back and realise that I did make the right choice to continue working hard.

marywooyeah

HappyMJ wrote: »

If you can't earn more than your friend on benefits then join them and stop being jealous. £1,400 per month is not that much. It sounds like a lot but it's income support/jsa, council tax benefit, housing benefit, child benefit, child tax credits. A family that earns £1,400 a month after tax would be entitled to some of that in benefits. It does not reduce exactly pound for pound.

I doearn more than her, the point I was making originally before you twisted everything I was saying is that we are losing taxcredits because we earn over the new threshold but those who don't work are sometimes better off financially than those that do and gave examples. I would never dream of quitting my job to live off benefits and I do think 1400 amonth is a lot to be raking in in benefits, that's more than a lot of people earn in a month working full time. Out of interest what do you do for a living? You seem to know a lot about benefits so wondered if you work in the job centre or something similar.

MissMoneypenny

Sixer wrote: »

I find it laughable that a 50% rate of income tax on a tiny number of people makes headlines for being a disincentive but an effective 76% on a huge number of people is regarded as evidence of scrounging or a workshy attitude.

That's like comparing apples and pears. One of those examples you gave are paying into the system and creating jobs for others to pay into the country: your other example are those taking out of the country.

With places like Hong Kong trying to lure away the brains (people that make money for countries) with offers like only 15% tax, we just can't afford to lose/fail to attract to the country, the 50% tax payers who create money and jobs. The ones we can afford to lose/not attract, are the ones who want to take out of the system.

HappyMJ

marywooyeah wrote: »

I doearn more than her, the point I was making originally before you twisted everything I was saying is that we are losing taxcredits because we earn over the new threshold but those who don't work are sometimes better off financially than those that do and gave examples. I would never dream of quitting my job to live off benefits and I do think 1400 amonth is a lot to be raking in in benefits, that's more than a lot of people earn in a month working full time. Out of interest what do you do for a living? You seem to know a lot about benefits so wondered if you work in the job centre or something similar.

I understand as I generally don't work and am better off but I do some work as I am self employed working 30 hours a week and earning very little profit (£40 per week plus car/travel, laptop, phone, broadband, the occasional overnight stay somewhere including all meals and a fully furnished home office) therefore claiming working tax credit (£52 per week) and local housing allowance (£91 per week) and council tax paid for and being much better off than if I had a PAYE job. I just can't take a PAYE job as it just is not worth it for the reasons that have been given. The main one being travel to work expenses are claimable as self employed and they are not when employed as an employee under PAYE.....and besides I've hated every PAYE employee job I've had and I'll never take one ever again.

Although UC will change all that as I would be considered to only be in employment for under 7 hours a week in the new system and would be expected to increase earnings at a marginal deduction rate of 76%. Not really worth it but much better than the current 96%.

Sixer

MissMoneypenny wrote: »

That's like comparing apples and pears. One of those examples you gave are paying into the system and creating jobs for others to pay into the country: your other example are those taking out of the country.

With places like Hong Kong trying to lure away the brains (people that make money for countries) with offers like only 15% tax, we just can't afford to lose/fail to attract to the country, the 50% tax payers who create money and jobs. The ones we can afford to lose/not attract, are the ones who want to take out of the system.

You're missing the point. It's not about virtue; it's about incentive. It is - apparently - blinding common sense that 50% is a disincentive. It is - apparently - NOT blinding common sense that marginal deduction rates of between 76% and 100% are a disincentive.

In addition, nobody ever mentions that NICs for higher tax rate payers are reduced to 2% instead of the 12% the hoi polloi pay.

I notice you also ignore other points - a third of 50% tax payers are bankers, so we're rewarding them for failure in yet another way; many other 50% tax payers are actually employed to OUTsource jobs, not create them for UK citizens.

Even so, I'm not making a point about the rights and wrongs of a 50% top tax rate. I'm making about about incentives and the hypocritical attitudes towards them taken by politicians.

[Deleted User]

Call me cynical, but I have noticed this week whilst entering my newstarters there is a massive trend for 25 hours a week contracts all of a sudden......

debrag

So a couple without children just about the £425 amount won't be entitled to anything?

MissMoneypenny

Sixer wrote: »

I notice you also ignore other points - a third of 50% tax payers are bankers, so we're rewarding them for failure in yet another way;

I wasn't ignoring it as I have said it all before, but I'll repeat it if you want.

You do realise that the government has already had much of that money returned, with interest and will continue to get the money back with interest? Unless we are talking about Gordon Brown and his pet projects of his own countries two failed banks', Royal Bank of Scotland and Halifax, who Brown then allowed to be the UKs 2 biggest failing banks. We will never get welfare payments back.

I hope you also realise that it was Blair/Brown's relaxation of banking laws and his need to make some people in the country feel good (he scared the rest of us) who caused much of this trouble? They pushed house prices up by lowering the interest rate when the market stalled in 2005; encouraged lending to people who you wouldn't normally loan a fiver to; encouraged MEWing and encouraged credit card debt; invented massive welfare payments (all for the same temporary feelgood reason).

Then during the good years that they inherited from the previous govenment and China's rising economy which gave us cheap goods; instead of saving, Blair/Brown borrowed heavily and got the UK into huge debt; spent the oil revenue instead of saving it as Norway had; then sold the UKs gold stock at the lowest gold price for years as Brown had missed his own target.

Blame the bankers if it makes you feel better but the facts show it was the Labour government who caused most of the mess and have left the UK with massive debts, even bigger than the debts struggling Spain has. People who borrowed and then walk away from their debts have also made things bad for the rest of us.

The UK is broke. We cannot afford to lose our triple A rating or our problems will get even bigger as we will have to pay higher interest rates on the debts Labour left the UK. Do you want us to end up like Greece?

Sixer wrote: »

Even so, I'm not making a point about the rights and wrongs of a 50% top tax rate. I'm making about about incentives and the hypocritical attitudes towards them taken by politicians.

Again - givers and takers can't be compared. The 50% taxpayers give to the country and the benefit claimants take from the country.

Sixer

MissMoneypenny wrote: »

I wasn't ignoring it as I have said it all before, but I'll repeat it if you want.

You do realise that the government has already had much of that money returned, with interest and will continue to get the money back with interest?

But we won't get the COSTS of the recession back (including welfare payments and lost tax revenues).

MissMoneypenny wrote: »

We will never get welfare payments back.

What has this to do with the price of eggs in Brazil or the point I was making? The point I was making was about incentives. If you want to pay out less in welfare, then a 76%-100% marginal rate is a disincentive to work more. How difficult a concept is that to understand?

MissMoneypenny wrote: »

I hope you also realise that it was Blair/Brown's relaxation of banking laws

Ever heard of the Big Bang? It's ludicrous to see New Labour - and I am not a fan of New Labour - as the progenitors of financial deregulation. It's a Thatcherite policy for crissakes.

MissMoneypenny wrote: »

They pushed house prices up

Again, a continuation of Thatcherite policy. I'm always confused by the blame New Labour gets for continuing Thatcherite policy while the Tories, who originated it all, escape scot free. Although I think we can perhaps agree that overpriced housing is the main cause of pain in all sorts of ways at present?

MissMoneypenny wrote: »

Blame the bankers if it makes you feel better but the facts show it was the Labour government who caused most of the mess and have left the UK with massive debts

Actually, I don't blame the bankers - well, not entirely - but this Labour Labour Labour mantra really p1sses me off. It's as if 1979-1997 never happened and as if the Tories would have a) depended on the financial sector any less, b) discouraged personal debt any less or c) behaved any differently when the crash actually happened. They wouldn't.

MissMoneypenny wrote: »

The UK is broke. We cannot afford to lose our triple A rating or our problems will get even bigger as we will have to pay higher interest rates on the debts Labour left the UK. Do you want us to end up like Greece?

Clearly not. But do I want us to end up like Ireland? Or Japan? No. It's not that open and shut.

MissMoneypenny wrote: »

Again - givers and takers can't be compared. The 50% taxpayers give to the country and the benefit claimants take from the country.

Again (sigh) - of course they can be compared. Do only one section of people need to be incentivised to behave in ways which benefit us all? Only the rich people? Only the people at the top of the tree? You continually stress the damage a lack of work ethic on the part of the workless and underemployed does on our whole society. If you want them to behave better, why is it so difficult for you to see that incentives alter behaviour? You want a tiny number of people to stay in the UK because you think it's good for our economy so you want to drop the top rate of tax from 50%. You want a much larger number of people to work more and earn more and claim fewer benefits, but you don't think it's sensible to incentivise this by making THEIR effect tax rate less than 76%?

zagfles

Sixer wrote: »

Again (sigh) - of course they can be compared. Do only one section of people need to be incentivised to behave in ways which benefit us all? Only the rich people? Only the people at the top of the tree? You continually stress the damage a lack of work ethic on the part of the workless and underemployed does on our whole society. If you want them to behave better, why is it so difficult for you to see that incentives alter behaviour? You want a tiny number of people to stay in the UK because you think it's good for our economy so you want to drop the top rate of tax from 50%. You want a much larger number of people to work more and earn more and claim fewer benefits, but you don't think it's sensible to incentivise this by making THEIR effect tax rate less than 76%?

Yes, it's exactly the same. The UC does make MDRs better, a lot better at the lower end though slightly worse at the upper end of the income scale, but overall much better.

But it doesn't go nearly far enough. One of the problems, apart from cost, is that until the govt has the balls to ditch or redefine the "child poverty" targets set by the previous govt, high MDRs are practically mandated. Because the targets don't measure poverty as most people understand it, ie an inability to afford the essentials of life etc. They only measure the gap between the median and the bottom of the income scale. If you lower the MDRs then clearly you will increase the gap between those at the bottom and those in the middle, thereby increasing "child poverty"!