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Tax credits and universal credit
Comments
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It really doesn't make sense for folks to be taxed and then given their money back as benefits.
Totally agree.
We should tax them less, and cut out the inefficient middleman.
But thats not whats being proposed....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Nice to see an interesting thread here for a change.
I think the changes on the economy will be predictable - it will depress consumer spending further as middle class families lose CTC. However this is inevitable as government spending simply must be reined in to manageable levels.
It really doesn't make sense for folks to be taxed and then given their money back as benefits.
But isn't the CTC a way of redistributing income from earners without children to those with them? IN theory there could be a child tax free allowance for parents but actually the redistribution at the bottom of the scale is larger than the total amount of tax deducted.
Which brings us to a political question - why are these benefits part of the tax system run by hmrc rather than the benefits system? My understanding was it was done this way (at large bureaucratic cost) because tax plus spend on benefits shows in the national accounts as the state having a larger share of gdp whereas redistribution by hmrc is netted off before the govt share of national income is counted. Net effect 'the state' looks smaller than it actually is - thank you Mr Broon...I think....0 -
Calculation of capital and income
Capital
122. The capital rules in Universal Credit will generally follow the rules that apply now in existing benefits. The maximum capital limit for claiming Universal Credit is to be £16,000 for either a single person or a couple where that capital is held jointly.
123. Certain capital assets may be disregarded. These categories of capital include
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premises;
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business assets;
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rights in schemes such as pension schemes, life insurance and funeral plans;
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amounts earmarked for special purposes such as house purchases or essential repairs to property; and
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payments made for arrears of, or compensation for late payment of, social security benefits
Taken from UC-draft regs memo20120 -
But isn't the CTC a way of redistributing income from earners without children to those with them? IN theory there could be a child tax free allowance for parents but actually the redistribution at the bottom of the scale is larger than the total amount of tax deducted.
Sure, but it means there is an incredibly complicated benefits system. A fair better way of enriching folks would be higher wages or lower living costs. I still wander why folks with children (other than perhaps the very poorest) should be provided benefits by the state.Which brings us to a political question - why are these benefits part of the tax system run by hmrc rather than the benefits system? My understanding was it was done this way (at large bureaucratic cost) because tax plus spend on benefits shows in the national accounts as the state having a larger share of gdp whereas redistribution by hmrc is netted off before the govt share of national income is counted. Net effect 'the state' looks smaller than it actually is - thank you Mr Broon...
This is the legacy of a highly complicated benefits system. Perhaps one of the benefits (no pun intended) will be that HMRC staff may be reassigned to more important matters such as transfer pricing issues on (predominantly US based) multinationals.0 -
And how would you lock away this type of money? A new type of account? Paying less interest? Or what?parry_hotter wrote: »amounts earmarked for special purposes such as house purchases or essential repairs to property; and
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Very good question.PasturesNew wrote: »And how would you lock away this type of money? A new type of account? Paying less interest? Or what?
What I would like to know is why the £16K threshold hasn't been increased for years.
Who decided that £16K was the right amount? How was that figure reached?
£16K may be the right figure for a person of working age but too low for a pensioner.
What happens if you get awarded damages as result of NHS negligence or a Road Accident?"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »I doubt it will save much money.
It will be found to be full of holes and loopholes.
it will create lots of unforeseen consequences.
The IT will let it down both operationally and from a fraud perspective and will be costly to maintain.
It will be reworked and called something else 5 years down the road.
It won't reduce the tax bill of the average Jo(e).
The "benefit scum" will still get their dosh.
The biggest risk that the benefits scum will still get its dosh is that the UK electorate is stupid enough to put Labour back in in 2015. A Labour government will make sure that's what happens because that's what they believe in.No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0 -
GeorgeHowell wrote: »The biggest risk that the benefits scum will still get its dosh is that the UK electorate is stupid enough to put Labour back in in 2015. A Labour government will make sure that's what happens because that's what they believe in.
That is complete and utter twaddle. Labour Governement = "Benefits Scum". Even with your prejudice that is a big jump to make."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
In an overpopulated world, why are we giving people a cash incentive to breed?0
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grizzly1911 wrote: »That is complete and utter twaddle. Labour Governement = "Benefits Scum". Even with your prejudice that is a big jump to make.
So how did we get where we are then ? Is it just a coincidence that after 13 years of Labour this is one of the biggest issues of the day ? I don't remember it being such a big deal in the 1997 election, or before that (although no doubt there were some idle welfare scroungers even then). It got out of hand under Labour. Even a lot of their own supporters now apparently believe that they gave away too much in welfare, spending too much and creating an entrenched underclass. It is a coalition Conservative/LibDem government that is trying to do something about it. Would Labour have done the same ? I doubt it -- too much political capital in keeping it the way it is.
If anyone who points out these realities is to be accused of being "prejudiced" then I think it says more about the attitude of those making the accusation than about those accused.No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0
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