I thought work was suppose to pay!

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iammumtoone
iammumtoone Posts: 6,377 Forumite
First Anniversary Name Dropper First Post I've been Money Tipped!
edited 16 December 2014 at 10:25PM in Benefits & tax credits
I am job searching as my current job is due to end soon.

I am currently working full time and have been for the last year, as a single parent I find it a struggle my son is also struggling as he hates spending time in the nursery.

I am looking into what hours it would be best to job search for.

As I understand it any amount earned over £6,400 benefits reduce by 41p in the pound, this is fine I understand that, there has to be a cut off level somewhere. However once earnings are over 10K, income tax kicks in at 20 ish pence i think? meaning I would take home under 40p in every pound. On earnings of £8 per hour I would take home 3.20 hour out of which I would have to pay childcare (i get help with childcare but not the full amount)

That leaves me with approx 2.40 per hour (less when you include NI I haven't gone into that much detail). I can't see 2.40 per hour being worth putting myself and my son through the difficulties that full time work creates for us.

I am happy to be corrected on my calculations, I might have got them wrong. I am also happy for hear suggestions how working full time for that little extra per hour is a good thing as at the moment I think I would be best just looking for part time hours on pay just above 10K.
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Comments

  • double_mummy
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    16 hours a week does usually work out the most financially beneficial for most single parents unless you are a high earner
    The only people I have to answer to are my beautiful babies aged 8 and 5
  • nannytone_2
    nannytone_2 Posts: 12,952 Forumite
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    you should be adding your wages plus all benefits, then deduct nursery.
    divide the amount left by the hours you work, and this is your hourly rate. not just what is left after you have paid everything and disregarded your benefits!

    you shouldnt need MASSIVE incentives to want to support yourself and your child ... it should be a matter of pride!
    i can understand someone not wanting to work if they are actually financially worse off, but to not work because you arent a whole lot better off amazes me.
  • itch_for_a_glitch
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    I am happy to be corrected on my calculations
    Income tax 20% over £192/week
    NI 12% over £153/week
    Tax credit withdrawal 43%.
    So work does pay, on NMW approx. 163p per hour.

    I am happy to be corrected on my calculations
  • iammumtoone
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    nannytone wrote: »

    you shouldnt need MASSIVE incentives to want to support yourself and your child ... it should be a matter of pride!
    i can understand someone not wanting to work if they are actually financially worse off, but to not work because you arent a whole lot better off amazes me.
    [/B]

    I do want to work, where did I say I didn't, I need to work I can't afford not to but it is looking like part time work is the way to go. I am not looking at it wholly from a financial point of view but a point of view for my child's wellbeing, I could turn it around and some might say to me how can I subject my child to something he hates and is not good for him for the sake of an extra couple of quid a day.
  • iammumtoone
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    Income tax 20% over £192/week
    NI 12% over £153/week
    Tax credit withdrawal 43%.
    So work does pay, on NMW approx. 163p per hour.

    I am happy to be corrected on my calculations

    Ok yes I admit bad choice of title work does pay at the fantastic amount of 1.63 per hour less 25% of the childcare costs.

    So is an extra 1.63 per hour worth putting a child into an environment that isn't the best for their development.
  • clearingout
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    16 hours a week does usually work out the most financially beneficial for most single parents unless you are a high earner

    what do you class as a 'high' earner?

    what about the long-term issue of missing (potentially many) years of work and the impact of that on building a pension, potential promotions etc.

    I spent far too many years thinking that not working or working a minimum number of hours was OK but at over half way through my working life, the realisation that if I live to be 65, I am in big trouble financially, has hit very, very hard. Single parents really do have to look at the long term and assume that they will always be single and work out how they're going to build their futures and deal with retirement.

    That said, even with the Government paying 70% of childcare, it can be very difficult to make work genuinely pay when you factor in all the added extras that go alongside working and the corresponding reduction in benefits. I am a professional with 3 children but at minimum wage, I would technically have more coming in than on benefits but would be worse off in very real terms.
  • bloolagoon
    bloolagoon Posts: 7,973 Forumite
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    If it helps those of us who get nothing in benefits are far worse off per hour. Imagine if you got nothing, no help at all. That's our reality and was for years, now mine are older I've more money than I need now I keep it and don't pay childcare.
    Tomorrow is the most important thing in life
  • dippy3103
    dippy3103 Posts: 1,959 Forumite
    First Anniversary Combo Breaker First Post I've been Money Tipped!
    edited 16 December 2014 at 11:58PM
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    What do you suggest then? Like you say, there has to be a cut off.

    Plus is everyone decided that it wasn't worthwhile working, who would pay the tax that pays the benefit. Work hard & climb the ladder.
  • racon
    racon Posts: 220 Forumite
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    dippy3103 wrote: »
    What do you suggest then? Like you say, there has to be a cut off.

    Plus is everyone decided that it wasn't worthwhile working, who would pay the tax that pays the benefit. Work hard & climb the ladder.
    Hey Dippy. You can't say that as everyone is different. Your comments make little or no sense when I think of a friend that for over 26 years has worked in various supermarkets filling shelves, stacking the warehouse etc. Not much of a chance of promotion there and certainly little in the way of ladders.
  • nannytone_2
    nannytone_2 Posts: 12,952 Forumite
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    racon wrote: »
    Hey Dippy. You can't say that as everyone is different. Your comments make little or no sense when I think of a friend that for over 26 years has worked in various supermarkets filling shelves, stacking the warehouse etc. Not much of a chance of promotion there and certainly little in the way of ladders.
    not everybody has the chance/ambition/ability to climb the ladder, but that doesnt absolve them of the responsibility of doing whatever is necessary to support themselves.

    i was never ambitious ( unfortunately) i was also a single parent to 2 children.
    i worked full time, mostly school hours and weekends to mimnimise childcare costs. sadly it left me with no real future prospects.
    but i had my children and i supported them.
    you make your choices and you have to pay for them.
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