Universal Credit

Spendless

Deleted_User wrote: »

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......

Being given them or asking for them out of interest?

Sixer

zagfles wrote: »

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"!

In many ways, I'm all for a relative definition of poverty. For example, we can really say an internet connection is essential for modern living - jobseekers are disadvantaged at jobseeking without access (and please, no tosh about library access in rebuttal); a child's education is disadvantaged without it. Society is generally getting richer/life is generally getting easier, largely due to technology, and a decent society takes its poorest with it as it advances. An absolute definition of poverty to include food, light, heat and a roof may have been ok in 1945 but it really isn't now. And even from a non-ethical perspective, it isn't ok for today's peripatetic, "flexible" workforce.

But I do agree the fixation on child poverty, and addressing it via the welfare system in the form of tax credits, is both a short term fix and a long term disaster in terms of benefit dependency and incentive to self-reliance. Miss Moneypenny and I can probably agree on that.

But don't you see a 5-year election cycle as largely to blame for that? The real way out of poverty is to concentrate on the child rather than the parents via education. But that requires a) vast spending on education and b) an 18-year cycle. And we all know that nothing in politics can rely on an 18-year cycle.

zagfles

Sixer wrote: »

In many ways, I'm all for a relative definition of poverty. For example, we can really say an internet connection is essential for modern living - jobseekers are disadvantaged at jobseeking without access (and please, no tosh about library access in rebuttal); a child's education is disadvantaged without it. Society is generally getting richer/life is generally getting easier, largely due to technology, and a decent society takes its poorest with it as it advances. An absolute definition of poverty to include food, light, heat and a roof may have been ok in 1945 but it really isn't now. And even from a non-ethical perspective, it isn't ok for today's peripatetic, "flexible" workforce.

I'm not saying it should be, and I have no objection to stuff like internet access being considered an "essential" (my kids couldn't their homework without it!). Or for the "essentials" to change over the years/decades.

But "poverty" should be defined in terms of those essentials, not in terms of some gap between the middle and the bottom. Because otherwise you simply cannot have low MDRs for those in the lower half of the income scale. You certainly couldn't have a citizen's income (as that would lower MDRs dramatically).

Now a family with 2 kids face MDRs between 73% and 100% on income up to about £32,000, and 32-42% on income above £32k (up to £100k). But if you lower the MDRs for those earning under £32k (probably about the median), then you will clearly increase the income gap between those at the bottom and those on £32k, and so increase "child poverty".

But I do agree the fixation on child poverty, and addressing it via the welfare system in the form of tax credits, is both a short term fix and a long term disaster in terms of benefit dependency and incentive to self-reliance. Miss Moneypenny and I can probably agree on that.

But don't you see a 5-year election cycle as largely to blame for that? The real way out of poverty is to concentrate on the child rather than the parents via education. But that requires a) vast spending on education and b) an 18-year cycle. And we all know that nothing in politics can rely on an 18-year cycle.

This depends what type of "poverty" you are talking about. The reason that today we can enjoy things like TVs, mobile phones, computers, internet etc is because over the last few hundred years, a few clever people invented them, or laid the foundations of the technology they are based on.

Generally (though not exclusively) these people had a far superior education to the average child. Had all education been equal over the last 500 years, we'd probably not have these things, and we'd all be poorer. But "relative poverty" would be lower!

So it depends what's most important to society I guess. Current policies seem to focus on mediocrity, getting those at the bottom academically up to the middle, while totally ignoring those at the top, those who are likely to be capable of making everyone richer.

Sixer

zagfles wrote: »

This depends what type of "poverty" you are talking about. The reason that today we can enjoy things like TVs, mobile phones, computers, internet etc is because over the last few hundred years, a few clever people invented them, or laid the foundations of the technology they are based on.

Generally (though not exclusively) these people had a far superior education to the average child. Had all education been equal over the last 500 years, we'd probably not have these things, and we'd all be poorer. But "relative poverty" would be lower!

So it depends what's most important to society I guess. Current policies seem to focus on mediocrity, getting those at the bottom academically up to the middle, while totally ignoring those at the top, those who are likely to be capable of making everyone richer.

Yes. I agree. Sorry: I should have said "the best way out of poverty is through education creating social mobility" - would have been clearer.

MissMoneypenny

Sixer wrote: »

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

Nor the money back on all the massive interest we are having to pay and will have to keep on paying, with Labours wreckless borrowing.

Sixer wrote: »

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?

I find it quite worrying that you think some people should have incentives to work. There are single parents working fulltime and setting good examples to their chidren. Yet you claim other able bodied parents/ childless people, need incentives to work.:eek:

Sixer wrote: »

Ever heard of the Big Bang?

"the" big bang?? You do realise there was more than one big bang?

Sixer wrote: »

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.

Are you aware that Blair had only been in power a few short years when world financiers were sending out warnings on his running the UK into the ground? One leading financier even stated that "Labour inherited a model economy and in a just a few short years, have managed to turn it into a basket case".

Blame Thatcher for Labours disasterous years if it makes you feel better, but a lot of people have now realsied how bad Labour has been for the UK, even if they voted for them originally.

Sixer wrote: »

Although I think we can perhaps agree that overpriced housing is the main cause of pain in all sorts of ways at present?

Overpriced houses and overpriced, unregulated rent.

Are you aware that Blair bought properties and rented them out to firms that had government contracts? Or that he bought in laws to throw renters out of properties without a reason, while other EU countries bought in stronger laws to protect renters? In those EU countires, the renting laws are so good, that many people prefer to rent for the freedom to move, low costs and lots of spare money, instead of burdening themselves with a lifetime mortgage and no spare money.

I think we all know that Blair and Brown would not have used UK's veto like Cameron did, to stop the UK paying 95% of the Euro bailout, that France tried to force through. How refreshing to have a leader that thinks of his country insted of Blair's "what's in it for me" mentality.

All in all, never has a party !!!!ed on its own voters, like the Labour government did; while feathing their own nests. You have to hand it to them though, they have even convinced some Labour voters that all their errors were the fault of Thatcher.

Sixer wrote: »

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

I used Greece as an example because of all their problems. Do you realise what is happening in Greece? Or how heavily the UK is involved in their severe financial problems, via France? This goverment is aready preparing for the collapse of ther Euro and how best to protect the UK.

Yet all you seem to be worried about is incentives to make people work! How about no money to pay their welfare payments, would that make people work?

Angel747

I found this thread while looking for a place to ask a question, and now i am a bit confused.

Im a single mum (2 children, 14 in April and 16 in September) and i work as a self employed childminder full time, at the moment working 44 hours a week. Now, without going into major details this tax year (11/12) i will be declaring earnings of £7K this year (i charge £3 an hour, 2 days a week i only have 1 child here although i have more on the other 3 dys and the way the tax rules are regarding working from home, what i can claim etc this keeps me under the tax earning bracket). apart from my earnings, i get child benefit for 2 children, CSA from their father and what i believe is full CTC and WFTC.
My main question was going to be about savings, as i believe that at the moment you can have savings (i dont have any at the moment, but was hoping to try and start as i would like to move house in the future, but would need savings, as once my 2 hit 18/19 the majority of my income disapears completely and so would have trouble getting a big enough mortgage) but under the new system, there is a limit?

Having read this thread, i can see how the workings for couples are made, but what about single parents who do work more than the minimum amount of hours?

Im starting to think, that im not likely to lose much in my benefits, but might have to kiss my dreams of a small bungalow, they are more expensive than my 3 bed house, goodbye!

Im not very good at finding things on the government website - do they have a benefits calculator regarding the new UC yet or do we have to wait until nearer the time it becomes active?

HappyMJ

The savings limits will probably be the same as now for means tested benefits. £6,000 or less for full benefit and up to £16,000 for partial benefit and no benefit if assets exceed £16,000.

What they will do is reverse your wages so £7,000 would get you 22 hours a week at minimum wages. Even though you really do 44 hours you will only be credited with 22 hours. Is the £7,000 of income all profit? Child minders can claim a lot of expenses such as gas/electric/water and travel expenses to make the profit virtually nil and you could also get full housing and/or council tax benefit. If your declared profit is close to zero they might declare your hours as close to zero and then you would be subject to conditionality.

Angel747

Thank you HappyMJ re the savings, and yes, the £7K is all profit - i am able to claim a lot of expenses, and that keeps me under the tax bracket.

I am confused with all this conditionality - i cant work any more hours than i do, why would they credit me with only 22 hours? I enable other people to work, show my children that they have to work and although i dont pay tax on my earnings (lots in other ways tho) i do pay NI - i could increase my fees, but then others may not be able to afford to work and then i would lose work that way.
I think im more confused now than before!

Angel747

Just had a thought - do the benefits people (used to be tax credits but could be anything now) ask for my income before or after tax, i cant remember!

HappyMJ

Angel747 wrote: »

Thank you HappyMJ re the savings, and yes, the £7K is all profit - i am able to claim a lot of expenses, and that keeps me under the tax bracket.

I am confused with all this conditionality - i cant work any more hours than i do, why would they credit me with only 22 hours? I enable other people to work, show my children that they have to work and although i dont pay tax on my earnings (lots in other ways tho) i do pay NI - i could increase my fees, but then others may not be able to afford to work and then i would lose work that way.
I think im more confused now than before!

They would only credit you with 22 hours as that is what someone on minimum wage would earn. £6.08*22 hours*52 weeks=£6955 per year. You would either need to increase hours, increase fees or look for better paid work.

You are right that if you increase fees others may not be able to work. Under Universal Credit there is a penalty where so many more parents will choose to only have 1 working parent. The government knows that and is trying to encourage every family to at least have one working parent. The penalty for having a second full time working parent is having a marginal deduction rate close to or more than 100% when taking 30% of the childcare costs into account meaning that parents who choose to have two working adults will have to pay more than they earn to go to work. Many will choose to stay at home looking after their own child rather than a childminder so you can expect your workload to go down in any case.

i.e Earn £1 over personal allowance. The parent would pay 20 pence in tax 12 pence in NI. They would get an increase in their UC entitlement of 56 pence (70% of 80p-average childcare costs for 2 children for a week divided out over weekly earnings) to take into account the costs of childcare. They would then lose 44.2 pence of UC due to the 65% withdrawal rate on the remaining income after tax and NI. Then they have to pay 80 pence out in childcare costs. So to go to work it would cost a parent 0.2 pence for every pound that they earn. That is a negative incentive to earn any more or even continue with working and childcare. It doesn't matter how much a parent earns per hour this applies to every working parent with childcare costs.