MSE News: Summer Budget 2015: Millions to face benefit cuts

Weary_soul

rogerblack wrote: »

Okaaay.
A) Benefit freeze for several years, decreasing the real-terms amount of benefit. (I think we're up to ~15% cut CPI by the time the current freeze ends)
Benefit cap reduction - to the point that many not be helped at all with housing costs if they have had even two weeks unemployed in the last year, to the point they may face eviction in only a few weeks.
C) Changing of SMI into loans.
D) 7 day waiting period for benefits, which disproportionally affects those with intermittent work.
E) Elimination of the work-related activity component in ESA and UC.

For those in partial work, a nasty perfect storm for UC for some.

F) Worsening of the effect of 'surplus earnings' measure due to the reduction of work allowances.
G) Increase in the minimum wage means that self-employed hours not at the minimum wage will reduce your UC as if it was. (also causes
H) Reduced work allowances.

For example, my understanding is that a single person with no housing costs (who now has a 0 work allowance) who goes into work at over 27 hours NMW/week, and comes off UC will now be expected to instead of investing in work, or bettering their condition, or paying off debts be expected to save most of their increase in earnings in case they lose their jobs.
This has obvious issues for those who are unable to find full-time work for long, due to its unavailability in an area.

Good examples and well put.

zagfles

rogerblack wrote: »

Okaaay.
A) Benefit freeze for several years, decreasing the real-terms amount of benefit. (I think we're up to ~15% cut CPI by the time the current freeze ends)

Eh? What do you mean by "current freeze"? Most benefits aren't currently frozen, most increased this April.

If you mean the freeze going forwards, how do you know what CPI is going to be over the next few years? It's currently 0%. And of course those in work are affected too.

Benefit cap reduction - to the point that many not be helped at all with housing costs if they have had even two weeks unemployed in the last year, to the point they may face eviction in only a few weeks.

The benefit cap reduction is certainly going to create problems. But it's politically popular. Nice and simple for Sun readers to understand.

C) Changing of SMI into loans.

At least those out of work can get SMI (eventually), those in work 16+ hours can't. And under UC it'll be 1+ hours!

D) 7 day waiting period for benefits, which disproportionally affects those with intermittent work.

And doesn't affect those out of work at all.

E) Elimination of the work-related activity component in ESA and UC.

As mentioned above.

For those in partial work, a nasty perfect storm for UC for some.

F) Worsening of the effect of 'surplus earnings' measure due to the reduction of work allowances.
G) Increase in the minimum wage means that self-employed hours not at the minimum wage will reduce your UC as if it was. (also causes
H) Reduced work allowances.

All of which don't affect those who don't work.

For example, my understanding is that a single person with no housing costs (who now has a 0 work allowance) who goes into work at over 27 hours NMW/week, and comes off UC will now be expected to instead of investing in work, or bettering their condition, or paying off debts be expected to save most of their increase in earnings in case they lose their jobs.
This has obvious issues for those who are unable to find full-time work for long, due to its unavailability in an area.

What has changed on this score? I know there's some sort of period over which UC is calculated, I think we've had this discussion before, but what is changing?

I think all in all you're just adding to the argument that those in work (or intermittant work) are being hit harder than those out of work by this budget. Apart perhaps for those affected by the benefit cap, which will still be a minority (contrary to popular belief, most benefit claimants don't get £20k in benefits).

StixUK

I am currently working as a Territory Manager for Walls.


I have been speaking to a lot of the Co-op shops recently and they are cutting hours now, I suppose in anticipation of the minimum wage rising so sharply.


One manager stated that he had to cut 80 hours per week off his wage bill from 520 hours that he currently has allocated.


I don't understand how this is going to help because:


A. People will be getting less money
B. Less NI will be paid by employer and employee
C. Demands in the workplace will be the same with less hours to fulfil the work required.
D. Queues will just get longer
E. Staff and customers will just get more stressed and more prone to illness and feelings of helplessness.


I think all this is part of a bigger strategy to get the UK to accept a new standard of living, so that when our children grow up they will be taught that their parents are whingers and are lazy because they could have worked harder?


I don't know, I think it is just a theory.


It has all gotten progressively worse since the days that Thatcher sold off the Council Housing. A chronic problem started when that first house was sold and never replaced at the same/greater rate.


The population has increased but the numbers of houses have not been maintained with that increase so therefore prices rise, because housing is the single most important bill in everyones life that has a massive impact on everyone in the whole of the UK.


You can increase the minimum wage and make other changes but they all pale into insignificance until you solve the housing crisis.

StixUK

Hey,


This budget clearly states a couple things to me:


Working and claiming tax credits = worse off


Working and above the tax credits threshold = better off


Isn't it clearly as simple as that?


The only difference is what threshold you have under the tax credits system.


I have 4 children and earn between 15,000 and 20,000 in the jobs that I get. I understand that my earning threshold before I lose tax credits completely is around £50k give or take.


Obviously for a couple with 1,2 or 3 children that threshold will be lower, so consequently they are likely to reach the positive figure sooner.


I am very unlikely as a family even with both of us working going to get to the £50k mark because I think I can realistically earn around 25k - 30k with progression (if I ever get there) and the wife doesn't have great grades and NMW is probably realistic so FT will get £12k, so we will always be worse off under the new rules.


It is funny because I hate it when people criticise you for using all available resources for family and future planning and then when they are reduced/stripped away they blame those people directly.


When I had my children, I was fully aware of what I could claim from in child benefit and tax credits based on my earnings (call it working out my total income). I then based my decisions on what I was entitled to claim and went forth.


8 years later, I am now being told that I shouldn't expect other people to pay for my children, shouldn't breed if I can't afford to etc etc.


I work, FT earning £15k atm and I get the corresponding benefits for that wage. I am claiming what the governments have said I was entitled to claim, I don't see how anyone can blame specific individuals or groups of individuals for these decisions.


We are now seeing an exacerbation in the two tier society: the tax credit claimers and the non-tax credit claimers.


Two distinct groups. One group is being rewarded and told that they are the future of Britain, they are doing the right thing and surprisingly they are rewarded overall with a personal tax allowance increase and will be better off in this budget.


Anyone claiming tax credits, is being told that they need to make cuts as the tax credits system is not fit for purpose. They shouldn't expect to be paid by the state. They need to work harder and do better so they are not reliant on state benefits. This group are going to be worse off and will not get more money.


Britain - the country demonstrating to the rest of the world how fairness can be achieved, where we are all in it together.


No - this is not true. Communism is where we are all in it together and unfortunately the Tories do not hold any Communist morals at all. They believe in the free market, privatisation of essential and non-essential service, devolution to local areas and as little state intervention as possible.


This budget and the preceding years of Tory rule have shown me that they have succeeded in putting the lower tiers of society into a civil war with each other. We are too busy arguing between ourselves, when actually we should be looking out for each other.


I am disappointed to be a British resident right now and if I had the balls and agreement from my wife, I would try to make my life elsewhere, where they see the value in cherishing as many individuals as they can in society.


We are NOT fair, we are destroying the very fabric that united our grandparents. We have nothing better to do than fight amongst ourselves, judging each others actions and making ourselves feel better.


Where is the Big Society? I haven't heard this mentioned for a while and I see no physical evidence of this happening. All I see is loads of people running around trying to get more and more done for less pay and less appreciation. Grinding their !!!!!!!! off for next to nothing and looking for someone to blame for their situation and this tends to be the people below them in the social scale.


The Governments are the ones to blame. They make the rules and people in the society mould their lifestyles to their decisions. STOP FIGHTING YOUR NEIGHBOURS, IT SERVES NO PURPOSE BUT TO CEMENT WHAT THE TORIES ARE TRYING TO ACHIEVE - DIVIDE AND CONQUER!

zagfles

StixUK wrote: »

The population has increased but the numbers of houses have not been maintained with that increase so therefore prices rise, because housing is the single most important bill in everyones life that has a massive impact on everyone in the whole of the UK.


You can increase the minimum wage and make other changes but they all pale into insignificance until you solve the housing crisis.

Nope. The housing stock has risen faster than the population. The problem is there are now less people per property.

http://www.thisismoney.co.uk/money/mortgageshome/article-3070492/Households-growing-number-shrinking-size-report-shows-fewer-people-living-property-compared-1970s.html

I know it's easy to blame immigration etc, but that's not the problem. The problem is the assumption of a God given right to live alone rather than share a property, and the idea that buying the biggest property you can afford is a good idea.

You can keep building houses till everyone has one each. That probably still won't solve the problem and people will start expecting a second home for holidays

The problem is the British attitude towards housing. Serious policies are needed to stop people regarding their house as an investment as start regarding it as somewhere to live, and that only.

They'll never happen though, because they'll upset too many voters.

zagfles

StixUK wrote: »

Hey,


This budget clearly states a couple things to me:


Working and claiming tax credits = worse off


Working and above the tax credits threshold = better off


Isn't it clearly as simple as that?


The only difference is what threshold you have under the tax credits system.


I have 4 children and earn between 15,000 and 20,000 in the jobs that I get. I understand that my earning threshold before I lose tax credits completely is around £50k give or take.


Obviously for a couple with 1,2 or 3 children that threshold will be lower, so consequently they are likely to reach the positive figure sooner.


I am very unlikely as a family even with both of us working going to get to the £50k mark because I think I can realistically earn around 25k - 30k with progression (if I ever get there) and the wife doesn't have great grades and NMW is probably realistic so FT will get £12k, so we will always be worse off under the new rules.


It is funny because I hate it when people criticise you for using all available resources for family and future planning and then when they are reduced/stripped away they blame those people directly.


When I had my children, I was fully aware of what I could claim from in child benefit and tax credits based on my earnings (call it working out my total income). I then based my decisions on what I was entitled to claim and went forth.


8 years later, I am now being told that I shouldn't expect other people to pay for my children, shouldn't breed if I can't afford to etc etc.


I work, FT earning £15k atm and I get the corresponding benefits for that wage. I am claiming what the governments have said I was entitled to claim, I don't see how anyone can blame specific individuals or groups of individuals for these decisions.


We are now seeing an exacerbation in the two tier society: the tax credit claimers and the non-tax credit claimers.


Two distinct groups. One group is being rewarded and told that they are the future of Britain, they are doing the right thing and surprisingly they are rewarded overall with a personal tax allowance increase and will be better off in this budget.


Anyone claiming tax credits, is being told that they need to make cuts as the tax credits system is not fit for purpose. They shouldn't expect to be paid by the state. They need to work harder and do better so they are not reliant on state benefits. This group are going to be worse off and will not get more money.


Britain - the country demonstrating to the rest of the world how fairness can be achieved, where we are all in it together.


No - this is not true. Communism is where we are all in it together and unfortunately the Tories do not hold any Communist morals at all. They believe in the free market, privatisation of essential and non-essential service, devolution to local areas and as little state intervention as possible.


This budget and the preceding years of Tory rule have shown me that they have succeeded in putting the lower tiers of society into a civil war with each other. We are too busy arguing between ourselves, when actually we should be looking out for each other.


I am disappointed to be a British resident right now and if I had the balls and agreement from my wife, I would try to make my life elsewhere, where they see the value in cherishing as many individuals as they can in society.


We are NOT fair, we are destroying the very fabric that united our grandparents. We have nothing better to do than fight amongst ourselves, judging each others actions and making ourselves feel better.


Where is the Big Society? I haven't heard this mentioned for a while and I see no physical evidence of this happening. All I see is loads of people running around trying to get more and more done for less pay and less appreciation. Grinding their !!!!!!!! off for next to nothing and looking for someone to blame for their situation and this tends to be the people below them in the social scale.


The Governments are the ones to blame. They make the rules and people in the society mould their lifestyles to their decisions. STOP FIGHTING YOUR NEIGHBOURS, IT SERVES NO PURPOSE BUT TO CEMENT WHAT THE TORIES ARE TRYING TO ACHIEVE - DIVIDE AND CONQUER!

The problem is you'll find very few countries who are more generous to low income families than the UK. Even after the budget cuts.

A lot of countries use tax allowances rather than benefits/"tax credits" to support families, but those are of more use to people on higher incomes.

I think govt policy is partly driven by wanting to make our system more like the rest of the EU, where non-contributory benefits are a lot lower in general, and state pensions are a lot higher (hence leaving pensioners alone - contrary to popular belief pensioners don't do well in the UK compared to other countries).

bloolagoon

zagfles wrote: »

The problem is you'll find very few countries who are more generous to low income families than the UK. Even after the budget cuts.

A lot of countries use tax allowances rather than benefits/"tax credits" to support families, but those are of more use to people on higher incomes.

I think govt policy is partly driven by wanting to make our system more like the rest of the EU, where non-contributory benefits are a lot lower in general, and state pensions are a lot higher (hence leaving pensioners alone - contrary to popular belief pensioners don't do well in the UK compared to other countries).

We could certainly learn from other countries. Our cont based system is a joke.

Mersey_2

Zagfles - that really is nitpicking to suggest Rogerblack isn't right re inflation.


Benefits have been frozen in real terms - the increase was capped at 1% for most benefits the past 2 years.*


Oh and of course the extra waiting days affects the out of work - they're the ones who have to wait extra for their UC! Quite apart from the fact that it's taking the DWP 8 weeks to pay UC [even the promised 5 weeks was bizarre]


*Now clearly, that was meant to save money by GO & HM Treasury. Obviously if he'd kept it at CPI he would actually have saved more £ - due to inflation falling further - but that was his choice.


[In 2011, benefits increased by 5.8% due to RPI and the manifesto pledge, so it seems however Govts keep changing the formula they almost always get it wrong (if saving £ is their aim). Protecting the unemployed from inflation makes sense, but, of course, it also doesn't aid incentives to work when the employed received almost no increase in their wages that year.]


It reminds me of the student finance system, which seems to change every Parliament. Even Willetts & Cable now admit we've almost reached the point where the extra Fees bring in no extra net revenue long-term, due to loans being written off. Plus there's all of the off balance sheet debt from the old SLC loans (the 'pre '98 loans are written off after 25 years).

FBaby

When I had my children, I was fully aware of what I could claim from in child benefit and tax credits based on my earnings (call it working out my total income). I then based my decisions on what I was entitled to claim and went forth.

Wasn't this your mistake though to assume that the benefit you were entitled to then would be static forever? How about people who took on mortgages on the basis of the current interest rate not appreciating that this would go up at some time and then realised they couldn't afford their property?

Only you decided to have 4 children despite being on a low income. Many people in your situation made the decision to stop at 1 or 2 (or even none at all) for that reason, even though they might have wanted more children as much as you did.

bloolagoon

StixUK wrote: »

Hey,


This budget clearly states a couple things to me:


Working and claiming tax credits = worse off


Working and above the tax credits threshold = better off


Isn't it clearly as simple as that?


The only difference is what threshold you have under the tax credits system.


I have 4 children and earn between 15,000 and 20,000 in the jobs that I get. I understand that my earning threshold before I lose tax credits completely is around £50k give or take.


Obviously for a couple with 1,2 or 3 children that threshold will be lower, so consequently they are likely to reach the positive figure sooner.


I am very unlikely as a family even with both of us working going to get to the £50k mark because I think I can realistically earn around 25k - 30k with progression (if I ever get there) and the wife doesn't have great grades and NMW is probably realistic so FT will get £12k, so we will always be worse off under the new rules.


It is funny because I hate it when people criticise you for using all available resources for family and future planning and then when they are reduced/stripped away they blame those people directly.


When I had my children, I was fully aware of what I could claim from in child benefit and tax credits based on my earnings (call it working out my total income). I then based my decisions on what I was entitled to claim and went forth.


8 years later, I am now being told that I shouldn't expect other people to pay for my children, shouldn't breed if I can't afford to etc etc.


I work, FT earning £15k atm and I get the corresponding benefits for that wage. I am claiming what the governments have said I was entitled to claim, I don't see how anyone can blame specific individuals or groups of individuals for these decisions.


We are now seeing an exacerbation in the two tier society: the tax credit claimers and the non-tax credit claimers.


Two distinct groups. One group is being rewarded and told that they are the future of Britain, they are doing the right thing and surprisingly they are rewarded overall with a personal tax allowance increase and will be better off in this budget.


Anyone claiming tax credits, is being told that they need to make cuts as the tax credits system is not fit for purpose. They shouldn't expect to be paid by the state. They need to work harder and do better so they are not reliant on state benefits. This group are going to be worse off and will not get more money.


Britain - the country demonstrating to the rest of the world how fairness can be achieved, where we are all in it together.


No - this is not true. Communism is where we are all in it together and unfortunately the Tories do not hold any Communist morals at all. They believe in the free market, privatisation of essential and non-essential service, devolution to local areas and as little state intervention as possible.


This budget and the preceding years of Tory rule have shown me that they have succeeded in putting the lower tiers of society into a civil war with each other. We are too busy arguing between ourselves, when actually we should be looking out for each other.


I am disappointed to be a British resident right now and if I had the balls and agreement from my wife, I would try to make my life elsewhere, where they see the value in cherishing as many individuals as they can in society.


We are NOT fair, we are destroying the very fabric that united our grandparents. We have nothing better to do than fight amongst ourselves, judging each others actions and making ourselves feel better.


Where is the Big Society? I haven't heard this mentioned for a while and I see no physical evidence of this happening. All I see is loads of people running around trying to get more and more done for less pay and less appreciation. Grinding their !!!!!!!! off for next to nothing and looking for someone to blame for their situation and this tends to be the people below them in the social scale.


The Governments are the ones to blame. They make the rules and people in the society mould their lifestyles to their decisions. STOP FIGHTING YOUR NEIGHBOURS, IT SERVES NO PURPOSE BUT TO CEMENT WHAT THE TORIES ARE TRYING TO ACHIEVE - DIVIDE AND CONQUER!

And that's why people wanted tax credits hit. The governent (LABOUR) are the ones to blame - your words.

I do agree labour were to blame as they started something good but it turned bad. The consequences to wages and house prices/rents were not considered or predicted. But by blaming the govt you are stating They made you have 4 children, a SAHP and a salary you could never achieve working. You had choices. You didnt need to take the money, you could have had pride in wanting to provide for your children instead of expecting your neighbour to feed/clothe them. You could have realised that it wasn't free money and that sometime it needed to end. Stopped at 2 children.
However, you will be fine as you "planned it financially" so you will never have a problem.