More than half of households get more in benefits than they pay in tax

Graham_Devon

Another benefits thread, but not aimed at a benefits discussion!

I'm wondering, if it's the case that 53% of homes in the UK get more in benefits than they pay in tax.....surely this says something is seriously wrong with the cost of living in the UK?

Bring the cost of living down (easiest way is cheaper homes and rent) and this situation will go into reverse, instead of more and more households needing benefits to get by.

This situation simply isn't sustainable....is it?! The numbers are said to have exploded under Labours reign of the country since 1997. previous to that, the number of households getting more in benefits than paid in tax only increased 0.7% in 20 years. It increased over 10% during labours reign...conincidentally, when HPI went crazy.

http://www.thisismoney.co.uk/news/article-2214379/Half-homes-burden-state-Benefit-payments-services-outweigh-taxes-53-properties.html

Ryan Bourne, head of economics at the CPS, said: ‘These data show that even before the financial crisis, the Labour government was ramping up spending on cash benefits and benefits in kind without corresponding increases in taxation.

‘This was not redistribution from rich to poor, but redistribution from the future to the present. It felt good at the time, but given the government doesn’t have its own money, was unsustainable.’

annie1975_2

i agree. Not only the cost of living though.A lot of people get benefits to top up their wages,as minimum wage does not pay enough to live on.

zzzLazyDaisy

annie1975 wrote: »

A lot of people get benefits to top up their wages,as minimum wage does not pay enough to live on.

Which means that the taxpayer is supporting businesses.

I believe that the minimum wage should be raised to a proper living wage for a single person, so that many more people would be taken out of the benefits system.

I also think that for couples, they should have to work 30 hours a week between them in order to qualify for working tax credit.

These two measures alone would reduce the pressure on the taxpayer - by increasing the tax being paid, and reducing the tax credits being paid back.

There could be a reduced minimum wage to assist businesses with a low turnover - but really the likes of Tesco etc can afford to pay a living wage out of their profits.

annie1975_2

My OH works 42 hrs a week for £7 an hr.And any overtime is also paid at the same rate..he draws 2 pensions which he pays Income tax on, and he gets a little bit in tax credits.I know £7 is above minimum wage,but its still crap money for all the hard work he does.
I agree with you about it the businesses,they pay low wage knowing people can top up on benefit,in the meantime some of them businesses are making Millions.
I also agree with the 30 hr week minimum to qualify for benefits,but I also think it should be raised for single parents,as they only have to work 16 hrs a week.

N1AK

Graham_Devon wrote: »

This situation simply isn't sustainable....is it?! The numbers are said to have exploded under Labours reign of the country since 1997. previous to that, the number of households getting more in benefits than paid in tax only increased 0.7% in 20 years. It increased over 10% during labours reign...conincidentally, when HPI went crazy.

To be fair to Labour this is hardly shocking and it isn't like the conservatives are pushing for tax rises. When you look a little deeper into the figures it is clear that pensioners are one group who have benefited greatly (the number excluding them is below 40%). Additionally, the main beneficiaries have been 'middle-income' households so effectively we have been moving the tax burden from people on ~£15-25k to people on £45k+

Is it sustainable? Yes and No. Yes, you could sustain a situation where over 50% get more than they give; No, you can't sustain a system where spending continues to increase faster than income and the burden on high earners continues to increase indefinitely.

Personally I think the government would do well to send out letters to each household showing the current balance as it might shut up a lot of families earning ~£30-45k who whine about paying tax for other peoples benefits while being net-detractors from the system.

FTBFun

Graham_Devon wrote: »

Bring the cost of living down (easiest way is cheaper homes and rent) and this situation will go into reverse, instead of more and more households needing benefits to get by.

Which would only be available through a massive housebuilding project - how would that be financed?

Anecdotally, my dad told me at the weekend that a massive project of homes for 8000 people has just been given the go-ahead in my home town, after 10-15 years of wrangling. Indicative of how long it takes for these things to happen.

The_White_Horse

i bet this doesn't include the public sector households which are ALL supported by the private sector tax payer. probably more like 25% of the population supporting everything - and the rest is borrowed.

wotsthat

Graham_Devon wrote: »

I'm wondering, if it's the case that 53% of homes in the UK get more in benefits than they pay in tax.....surely this says something is seriously wrong with the cost of living in the UK?

Maybe the cause and effect is the other way round and high benefits are leading to an increased cost of living.

chewmylegoff

annie1975 wrote: »

i agree. Not only the cost of living though.A lot of people get benefits to top up their wages,as minimum wage does not pay enough to live on.

labour introduced the minimum wage in 1997 (or shortly afterwards), before that you could pay people whatever you liked, which, if lower, wouldn't have been enough to get buy on either. so minimum wage being insufficient does not explain the increase of 10% referred to by G_D.

i would have thought there are three main factors:

(i) aging population - if a greater % of households are pensioners then that means more households receiving more in benefits that they pay out;

(ii) gordon brown deciding that the lower middle classes needed to be dependent on (and grateful to labour for) working tax credits; and

(iii) housing benefit - rents up equals housing benefit up.

ukcarper

Does this included non direct Taxs,

Graham_Devon

FTBFun wrote: »

Anecdotally, my dad told me at the weekend that a massive project of homes for 8000 people has just been given the go-ahead in my home town, after 10-15 years of wrangling. Indicative of how long it takes for these things to happen.

This happened near Plymouth A whole new town has been planned for over 18 years. Millions of pounds has been spent.

They have now axed the project due to the recession, private contractors pulling out and green campaigners. Planning permission was even granted, but ran out, as no private contractor did a thing.

Stupid thing is, because of this, we also lack hospital spaces etc etc, as within that town was a purpose built hospital. So now, it's back to the drawing board with the existing hospital etc.

Collosal waste of money, and now the council is again saying "errr, houses are overcrowded, something needs to be done". Yawn!

So whether that development will get off the ground near you will remain to be seen. Another much smaller (but large for the town) development has been axed in another town. The road is well known now as the road that goes to no where. Amusing thing is, it's just got a roundabout at the end with 2 other roads going to no where but a field. All waterworks and gas etc were sorted. It's all, again been axed, with 2 sets of flats left empty (and now graffitied), while at the same time the council moans about lack of housing.