david cameron and tax credits

zagfles

Naf wrote: »

What? How does that make any sense? Employers aren't going to change unless they are made to. There's a massive workforce of people looking for work, and forced to take any scrap of hours they can possibly find just for the privilege of staving to death slowly instead of quickly. People seem to think "If the benefits are cut, people will just find more hours; or they should stand up for themselves and earn more" - and that attitude is a joke at the best of times. In the face of cuts like the Tories are likely to implement, its sick. People are going to die.

Oh cut the scaremongering drivel. Even with the worst case cuts being talked about, benefits and tax credits are likely to be back to the real terms level of 2003, when tax credits were first introduced. How many people died of starvation in 2003?

I've never got how this isn't an obvious way to save? Stop messing around taking with one hand & giving back with the other, and just make the tax codes account for circumstances in the same ways that Tax Credits do now. There would still need to be some TC for people on very low incomes; but loads of people would still have the same amount of money in the end, by not paying it in tax in the first place. It would also make the figures more representative of what's actually happening i.e. the net payout of TC, because currently it just shows everything that's paid out, while more relevant is what's paid out that isn't just being paid back to people who paid that amount of tax.




With lies like IDS claiming no link between reducing people's benefits and reliance on food banks. The first thing this is going to encourage is higher benefit fraud.

Obviously there were loads more foodbanks pre 2003 when benefits were lower. Weren't there?

zagfles

andrewmp wrote: »

What about those without the opportunity for promotion who will be thousands of pounds worse off if the rumoured rollback to 2003 benefits happen?

Nearly everyone has the "opportunity" if they look for it, or work for it, or study for it. Those who don't for whatever reason will have to suffer like they did in 2003. Are you old enough to remember how terrible it was back then?

zagfles

pmlindyloo wrote: »

I am the first to admit that I know very little about Universal Credit other than what I have read.

Does anyone else find it strange that DC should be jigging UC re tax credits?

I would have thought that altering the computer system would have cost more than the savings in tax credits.

This makes me think that the claimant committment is going to be tightened up, perhaps increasing the number of hours claimants have to work and tightening up sanctions.

There is no doubt in my mind that people take advantage of the current system. I see many clients who work the minimum hours because it's not worth their while to do more.

The whole system is a complete mess.

It should save long term because it will reduce admin massively when people claim loads of different benefits, eg JSA, plus HB, plus tax credits, each of which has a separate income assessment using different definitions of income. Also by linking it with RTI it'll become like PAYE and be automatically linked to income. Changing hours/income/job shouldn't cause the massive hassle for claimants that it does today.

Short term it'll cost a lot, and initially it'll be messy and problematic as we're seeing. But govt IT projects always are. But they'll get there eventually. Just imagine if we didn't have PAYE and people had to ring HMRC every time their income changed so they paid the right amount of tax...but I'm sure PAYE was messy in the early days...

Pedent

zagfles wrote: »

If there is now more financial gain to taking it, then they may be more likely to apply...

But there won't be. No one has suggested that the taper rate will change, so they'll still pay 20% Income Tax, 12% NICS, and lose 41% in withdrawn tax credits, leaving them with 27% of any pay rise, as before.

zagfles wrote: »

Interesting how much unemployment in London has gone down since the benefits cap was introduced...

But in that case, employees were exempt from the cap, so by getting a job benefits recipients could avoid the cut. The cap increased the benefits of being in work rather than out of work for those affected. The changes to tax credits being discussed will do the opposite, decreasing the benefits of being in work rather out of work.

NYM

As an employer, if someone just wants a 16 hour contract and I want them to work for me, I need to employ another person on a 16-24 hour contract to ensure continuity of service to my clients. So that's two employees to cover the necessary hours. Two sets of people claiming Tax Credits and whatever else the *low* pay entitles them to.. it's their choice re the hours they work, not mine.

If someone wants a full time job, I'm more than happy to employ them.

zagfles

Pedent wrote: »

But there won't be. No one has suggested that the taper rate will change, so they'll still pay 20% Income Tax, 12% NICS, and lose 41% in withdrawn tax credits, leaving them with 27% of any pay rise, as before.

Up until the point where tax credits are reduced to zero, when they then keep 68%. If that point is lowered, then the incentive increases for those who now exceed (or could exceed) the lowered point.

But in that case, employees were exempt from the cap, so by getting a job benefits recipients could avoid the cut. The cap increased the benefits of being in work rather than out of work for those affected. The changes to tax credits being discussed will do the opposite, decreasing the benefits of being in work rather out of work.

Yes - it was just to illustrate the point that where there is an incentive to act in a particular way, it does work to get people to act in that way, and people aren't all victims of their circumstances and unable to change them (eg by getting a job in London).

andrewmp

zagfles wrote: »

Nearly everyone has the "opportunity" if they look for it, or work for it, or study for it. Those who don't for whatever reason will have to suffer like they did in 2003. Are you old enough to remember how terrible it was back then?

So you support taking thousands of pounds per year away from the lowest paid working families, even those working full time to support their family?

Maybe they'll ensure their landlord mates put rents back to 2003 levels too?

asajj

nearlyrich wrote: »

Some people pay tax from their wages and get it back via tax credits, it's better to not pay the tax in the first place both for the person benefitting from it and from a cost of administration of it point of view.
At the moment there are people playing the system working minimum hours to get it topped up to more than I get for working a well paid job full time and I am paying lots of tax and NI.


Companies who rely on government subsidies to top up low wages need to be paying realistic amounts to their workers it's not the tax payers job to top up anyone's income from working for a big profitable company.


Some people seem to see this as just an attack on people on low wages but if you read what is being said it's a reasonable thing to do.

I fully agree however I cannot see many companies will be willing to do this unless there is a sort of push from the Government.

zagfles

andrewmp wrote: »

So you support taking thousands of pounds per year away from the lowest paid working families, even those working full time to support their family?

Ah, a reply starting with "So..." followed by an unfounded assumption. That rings all the Strawman alarms

Your assumption is wrong. Feel free to address what I actually wrote instead of addressing your unfounded assumption.

Maybe they'll ensure their landlord mates put rents back to 2003 levels too?

Maybe landlords will have to if they aren't subsided so much by the state.

rogerblack

pmlindyloo wrote: »

Does anyone else find it strange that DC should be jigging UC re tax credits?

I would have thought that altering the computer system would have cost more than the savings in tax credits.

In principle, for people with a stable life, claiming TC, they may have transitional protection when moving into UC that will retain the amount they were previously granted.

While the lifetime of this transitional protection on average may be moderately short, due to changes of circumstance - 2-3 years? If TC is reduced prior to someone being moved over onto UC - then this protection level will be reduced.

This will directly lead to savings both before the persons household is moved to UC, and after.

Changing some aspects of TC would be easy - for example, hours and allowances.
Adding a capital limit might be much more complex - though it depends how it's implemented.
A simple checkbox on the form 'Do you have more than 16000 of savings' - followed by throwing out any forms ticked would be one particularly simple option that wouldn't need any changes.