Changes to benefits when entering employment.

MrINeedOfHelp

Hello all,

Hopefully this is quick and understandble.

I am currently helping someone back into work (hopefully) as I have a job offer for them if they wish to take it up, it is basically customer service call center work on contracted 16 hours a week.

After looking into it a bit more I roughly worked out that the yearly earnings would be around £7525.44, so no a great deal really.

What I was hoping to try and find out was how this would effect any benefits they get now? from what I understand they do not receive JSA but do receive housing benefit and child benefit which I believe are the only benefits they claim.

So with the 16 hours of contracted work and the rough figure of £7525.44 per annum earned from it, would anyone be able to maybe explain how this may effect the benefits they already get?.

GirlFromMars_2

You may not know the answers to these questions, but we'd need to know more about the individual's circumstances.

Are they single?
If they have a partner what is the partner's income?
How old is the child?
Will they need childcare while they are at work?
Does the individual, child or partner have disabilities?
How old is the individual?
Do they have savings?

I'm presuming they have some other form of support other than just child benefit (as a parent and child could not live off that alone!)

Once you know the answers to these questions you can add different scenarios to a benefits calculator.

MrINeedOfHelp

GirlFromMars wrote: »

You may not know the answers to these questions, but we'd need to know more about the individual's circumstances.

Are they single? yes they are
If they have a partner what is the partner's income? no partner
How old is the child? two children aged 3 and 2
Will they need childcare while they are at work? family have already offered help for such circumstance
Does the individual, child or partner have disabilities? none
How old is the individual? 29
Do they have savings? no

I'm presuming they have some other form of support other than just child benefit (as a parent and child could not live off that alone!)

Once you know the answers to these questions you can add different scenarios to a benefits calculator.

I answered the questions with my reply's in bold, also where can I find the benefits calculator

Horseunderwater

Benefit calculator link on this site is just above this thread in bold green writing called Benefits calculator.

MrINeedOfHelp

Horseunderwater wrote: »

Benefit calculator link on this site is just above this thread in bold green writing called Benefits calculator.

Thanks for that I will be having a look through it later today.

blondebubbles wrote: »

Do you know why they do not currently receive child tax credits?

Honestly I guess I should have come on here with more solid info really.

However I can only assume that having looked into it, that they would be claiming both as that seems like something people can do.

Again it is only assumptions but having looked into it their child benefit payments would largely stay the same as the annual income is roughly £7525 which the .gov site has a sliding graph regarding the levels of income against what people get and it seems to remain unchanged until the household income reaches £15,000 annually.

I am just trying to help them out as they always complain about being short on money and everything is a struggle and I thoroughly believe despite their increase in earnings if they do take up the 16 hours work they would be financially better off then what they are now.

MrINeedOfHelp

blondebubbles wrote: »

Child benefit is only affected if one adult in the household earns over £50,000. The amount is set at £20.50 for the first child and £13.55 for each child thereater.

Child tax credits is unaffected if household income is less than £16,000.

A single parent working 16 hours may also be able to claim working tax credits. You get the maximum of earning less then £6420 and it stops altogether at approx £13,000.

Tax credit entitlement tables estimate what they could be entitled to.

See here - https://www.gov.uk/government/publications/tax-credits-entitlement-table-working-at-least-16-hours-and-no-childcare/tax-credits-entitlement-table-working-at-least-16-hours-and-no-childcare

Thank you so much for the info that is really useful!:j

Also as I am a newbie at all of this a used a rather nifty calculator via turn2us.org website and going by the questions used if they where to remain unemployed their annual income on benefits is £23,779.08 which is broke down into the following annual figures:

Child Tax Credits
£6,050.72

Income Support
£3,764.80

Housing Benefit
£11,440.00

Council Tax Support
£752.96

Child benefit
£1,770.60


I'm guessing that is the top end of each entitlement and in reality is rarely paid out to such figures?

However the calculator also had a really useful tool of working out the difference if you was to enter employment and thus the entitlement changed to £29,527.68 which included small reductions in the above benefits but obviously included the new possible annual employment income.

To me these figures seem rather large and was wondering if you might be able to shed light on it because to me all I see is £29,527.68 V £23,779.08 which is IMO is obviously worth returning to work for.

Sorry for the long winded post and hope it makes some sort of sense but would you be able to clarify if really returning to work is that simple?

Horseunderwater

There would be approx. £828 of work tax credits - CTC is correct - CB is correct = wages £7524 - that's if they stated tomorrow - they would need the 2 bed rate of HB as a min & whatever they are supposed to pay in council tax to work it out accurately. But yes they should better off esp if no childcare needed.

GirlFromMars_2

MrINeedOfHelp wrote: »

To me these figures seem rather large and was wondering if you might be able to shed light on it because to me all I see is £29,527.68 V £23,779.08 which is IMO is obviously worth returning to work for.

Sorry for the long winded post and hope it makes some sort of sense but would you be able to clarify if really returning to work is that simple?

Certainly looks from the numbers like she will be better off. But it's never quite as simple as the numbers, when you're the one whose life is changing.

Firstly looking after 2 small children for 16+ hours a week, is a big ask. Are the family sure they can manage that? (Answering a telephone will be a breeze for her in comparison!)

Then there are costs associated with work, like transport, how is she getting to work, how are the children getting to childcare.

If she's been out of work for a while she may need a new work wardrobe, depending on what the dress code is at the call centre, although things like this can be picked up cheaply at supermarkets it does add up.

Then there's the problem of switching benefits. If she doesn't have any savings she may run into problems switching from benefits that are paid every 2 weeks in arrears to salary that is most likely paid monthly, it can be a very long wait for the first pay cheque, especially if it delayed for any reason.

Housing Benefit in particular can be a problem if the award needs re-calculating and may be suspended while the new award is assessed. The same goes for Working Tax Credits.

She will be better off in work, especially in the long run, and it's great that you could find her this opportunity, but it may take a couple of months for things to settle down and for her to feel like she's doing better financially and has some space to breathe!

Horseunderwater

Hi BB Yes I know what WTC is for year I was stating what I believe they would get for 87 days left in this tax year. Was told a while back exactly how to work it out. Should have said.

Horseunderwater

They would not pay any tax or national insurance but the child benefit protects their NI stamps - so pension years not a problem. So Housing benefit & council tax support should not be too hard to work out. Delays are caused by backlogs usually, as normally done in date order.

Seamless

does your friend get any child maintenance? I believe under the new rules any child maintenance is not taken into account with benefits.