better of working or on benefits?

Danny30

Hi, I was hoping to get some feedback on what to expect when I start my new job after being on benefits for some time. The salary is £20,000 per year, and I was just wondering if I would be actually be any better of than I am currently on benefits? And before anyone say's anything, I am going to take the job regardless and am just enquiring to see what to expect.

I checked the entitledto website and it is saying that I would get £16,000 per year in benefits with this £20,000 per year salary which can't be right, I must have made a mistake somewhere.

My situation is as follows.

Married with 1 child and another one expected in 3 months. Wife doesn't work and we rent privately at £1190 pcm.

My Current benefits per week

Housing benefit - £245
Jobseekers - £113
Child benefit - £20.50
Child Tax Allowance - £62.50

Council tax allowance - £21.82

I am just worried that we will be worse off which will be very difficult. If anyone can offer some help, or is in a similar situation, I would appreciate your feedback. Thanks.

Danny30

Thanks for the reply. My Income for the year 13/14 would be the jobseekers allowance which is £5867 per year.

RAS

What your LHA limit?

Danny30

And what would you estimate for this tax year?

I would earn £20,000 per annum, so do you want to know up until April?.

What your LHA limit?

Our LHA limit is £245 which we are currently receiving.

Danny30

blondebubbles wrote: »

Yes this tax year is April 2014 to April 2015

Okay, this is getting confusing So if I start next week that is about 7 months pay which would be £11,666,69.

Danny30

I'm very confused now. I am starting work next week, so is the entitledto website working out my £20,000 per annum wage pro rata until April?

Does this mean it will count my wage this year for 7 months until April which would be £20,000 / 12 x 7 =11,666,69 and give me benefits as if that were my yearly wage for the year?. I really hope not otherwise I will be screwed next April when my benefits renew.

mattcanary

Danny30 wrote: »

Okay, this is getting confusing So if I start next week that is about 7 months pay which would be £11,666,69.

I think that's right - Blondebubbles has said that JSA income based doesn't count as income. As you seem to have been on JSA for the whole of the last tax year(?), you must have been on JSA income based for all of this tax year and before that too - you can only be on JSA contributions based for a maximum of six months at a time.
Therefore your benefits income won't count towards your total anticipated income for 2014/15 tax year.

Danny30

blondebubbles wrote: »

Why would you be screwed?

Because when I renew in April, I will get benefits on the full £20,000 as opposed to the pro rata salary now of £11,666,67? Surely the benefits on the full £20,000 will be considerably lower due to the higher figure than the current benefits on the current £11,666,67?

Or have I got it all wrong?

john1002

Blondebubbles, just wanted to say thanks as I'm in a similar position and had the same question to a certain degree and this has explained it perfectly. Could not get my head around the disregard.

Thanks

John

Danny30

Thank you for your explanation blondebubbles. So essentially I would be £360 per month worse off on the same wage in 2-3 years. Very odd system, not sure how i'm going to manage the steep drop in income.

Danny30

So do those figures you provided not include Housing Benefit? and would that go up if the other benefits go down in 2 years, or would it likely stay the same?

blondebubbles wrote: »

Or you could see it more positively in that you'll be getting extra entitlement for the next 18 months by which point you might have had a wage rise.

If they took into account your salary straight away then your payments would be lower from the start. This way they give you some extra help when you first get back into work.

You'll also still need to look into housing and council tax. I don't know what help is available there with your high rent.