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

seven-day-weekend

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.
Wasn't it a bit unwise to base the number of children you had on how much you could get in means-tested Benefits which can be taken away at any time.....

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 Not if you have to rely on means-tested Benefits to do it


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. I don't think you would find family Benefits as generous elsewhere, even after the cuts


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!

See my comments in blue above.

zagfles

Mersey wrote: »

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.*

Err..how is any sort of rise a "freeze"? That's not nitpicking, that's a pointing out a factual inaccuracy. Most benefits ended up around the same in real terms (at least the base, untapered rates). The child element of CTC actually went up by way over inflation in the early years of the coalition, overall over 20%, way above RPI let alone CPI.

JSA & IS went up by 11.6% over the last 5 years, DLA about 15%. CPI was 11.8%, RPI was 15.6%. Hardly a "15% cut".

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]

It doesn't affect those who don't work at all. That was the point. Like I said it affects low paid people in work and intermittant work most.

*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.]

Yes, for a while benefits were rising faster than earnings.

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).

Same with pensions, same with education, same with health, politicians can't help tinkering but it means there's no stability in the system.

StixUK

FBaby wrote: »

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.

I don't think that it is a mistake anymore than someone assuming they can keep up repayments on a mortgage over a 25 - 35 year period and then being unable to afford it due to unforeseen circumstances.


I don't think it is anymore a mistake than anyone making a rational decision at a certain point in time and then it becoming a wrong decision in hindsight.


I think you make a mistake when you suggest that it was a mistake to have more than 2 children. Fiscal policies meant that it wasn't necessarily attractive to have more children but it was achievable if you managed your money in a controlled manner.


My tax credits income hasn't really increased in proportion to inflation or house prices in the time that I have had my children and now I have until April 2016 to mitigate a £75 decrease in my income, I don't have the opportunity to take advantage of fixed rates for two years plus.


This tax credits income change is a little too quick in my opinion as you are generally taking a great deal of income away from families that have had it engrained as part as their lifestyle since the late 90s.


People have lifestyles based on the money that tax credits have given them, with the reduction in allowance and the taper rate drastically increasing, don't you think it is going to cause people who genuinely have tried into financial difficulty.


There are people out there who were assessed by the banks and brokers for mortgages using their tax credits as an income and they are going to be in trouble as well.


The problem with this budget reform is that by reducing the tax credits you are affecting a good chunk of the UK and also the people who have done 'the right thing' and were claiming tax credits at the same time, should they have known better?


We could go into the morals of everything in Britain. Should bankrupt business not forecast a meltdown in the economy when it happened? Should anyone earning over £100k get ready for a sharp increase in income tax? Should I get ready for my council house to be sold to profit the council even though I am on a secure tenancy? Should I get ready for a divorce because I might split up with my wife, I may not see it coming, but should I be prepared?


You are stating that I should have forecast a drastic change to tax credits when the 10 years before I had my first child, it had been pretty static already. I repeat, you need to blame the government of the day for the fiscal policies that were in place at the time.


I am sure that you realise that fiscal policy tends to dictate a lot of the major decisions made by an individual within an economy and that it cannot all be put down to personal responsibility.


Fiscal policy dictates interest rates. If interest rates were 20% would you buy your house? No probably not. But as they were 0.5% a great deal more people have bought homes they cannot afford over the long term. Should these people anticipate an interest rate of 15% in 12 years time, for example?


You were asking me to be more responsible at the time I conceived my children, I concur that could have been an option. But I am not the only one that took advantage of a system that was in place to benefit my family. I do not feel guilty for it as I did not create the system and at the time my decisions were based on sound planning.


It is no different from a rich person losing a chunk of their money in the stock market. The only difference is they can probably afford to take the hit due to their fortunate position (i.e their income). With this drastic cut in tax credits you are taking away from people who will have to make tough decisions and this process could have been outlined before the election and people could have made an informed decision. The government deliberately didn't realise the details of the tax credits cut because they would have lost a huge chunk of votes.


I realise a need to save money but 9 months to lose a good percentage of your income, why couldn't this have been done slowly by 2020, as they managed not to pay the £9/hr until 2020, which should have been implemented by April 2016 like the tax credits cut.

zagfles

bloolagoon wrote: »

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

I posted this in another thread.

http://www.oecd.org/els/soc/OECD2014-Social-Expenditure-Update-Nov2014-8pages.pdf

What stands out if you bother to analyse the graphs (rather than just look for whatever suits your political agenda), is that in the UK:

• Overall welfare spending is around average (p.1)
• We spend much less on pensioners and more on working age benefits than the OECD average (p.4)
• Our benefits are much more targetted at the lower paid (p.5 & p.6)

StixUK

Err..how is any sort of rise a "freeze"? That's not nitpicking, that's a pointing out a factual inaccuracy. Most benefits ended up around the same in real terms (at least the base, untapered rates). The child element of CTC actually went up by way over inflation in the early years of the coalition, overall over 20%, way above RPI let alone CPI.

JSA & IS went up by 11.6% over the last 5 years, DLA about 15%. CPI was 11.8%, RPI was 15.6%. Hardly a "15% cut".


I find that using percentages is a crude method of comparison.


11% on a small income (i.e JSA) is the same as 2% on a larger income of say £15,000 to £20,000.


Percentages are used to confuse people in believing they are benefitting the same as everyone else or better. They offer no real comparison and do not offer a perspective in the nature of the rise vs costs elsewhere.

missbiggles1

StixUK wrote: »

I don't think that it is a mistake anymore than someone assuming they can keep up repayments on a mortgage over a 25 - 35 year period and then being unable to afford it due to unforeseen circumstances.


I don't think it is anymore a mistake than anyone making a rational decision at a certain point in time and then it becoming a wrong decision in hindsight.


I think you make a mistake when you suggest that it was a mistake to have more than 2 children. Fiscal policies meant that it wasn't necessarily attractive to have more children but it was achievable if you managed your money in a controlled manner.


My tax credits income hasn't really increased in proportion to inflation or house prices in the time that I have had my children and now I have until April 2016 to mitigate a £75 decrease in my income, I don't have the opportunity to take advantage of fixed rates for two years plus.


This tax credits income change is a little too quick in my opinion as you are generally taking a great deal of income away from families that have had it engrained as part as their lifestyle since the late 90s.


People have lifestyles based on the money that tax credits have given them, with the reduction in allowance and the taper rate drastically increasing, don't you think it is going to cause people who genuinely have tried into financial difficulty.


There are people out there who were assessed by the banks and brokers for mortgages using their tax credits as an income and they are going to be in trouble as well.


The problem with this budget reform is that by reducing the tax credits you are affecting a good chunk of the UK and also the people who have done 'the right thing' and were claiming tax credits at the same time, should they have known better?


We could go into the morals of everything in Britain. Should bankrupt business not forecast a meltdown in the economy when it happened? Should anyone earning over £100k get ready for a sharp increase in income tax? Should I get ready for my council house to be sold to profit the council even though I am on a secure tenancy? Should I get ready for a divorce because I might split up with my wife, I may not see it coming, but should I be prepared?


You are stating that I should have forecast a drastic change to tax credits when the 10 years before I had my first child, it had been pretty static already. I repeat, you need to blame the government of the day for the fiscal policies that were in place at the time.


I am sure that you realise that fiscal policy tends to dictate a lot of the major decisions made by an individual within an economy and that it cannot all be put down to personal responsibility.


Fiscal policy dictates interest rates. If interest rates were 20% would you buy your house? No probably not. But as they were 0.5% a great deal more people have bought homes they cannot afford over the long term. Should these people anticipate an interest rate of 15% in 12 years time, for example?


You were asking me to be more responsible at the time I conceived my children, I concur that could have been an option. But I am not the only one that took advantage of a system that was in place to benefit my family. I do not feel guilty for it as I did not create the system and at the time my decisions were based on sound planning.


It is no different from a rich person losing a chunk of their money in the stock market. The only difference is they can probably afford to take the hit due to their fortunate position (i.e their income). With this drastic cut in tax credits you are taking away from people who will have to make tough decisions and this process could have been outlined before the election and people could have made an informed decision. The government deliberately didn't realise the details of the tax credits cut because they would have lost a huge chunk of votes.


I realise a need to save money but 9 months to lose a good percentage of your income, why couldn't this have been done slowly by 2020, as they managed not to pay the £9/hr until 2020, which should have been implemented by April 2016 like the tax credits cut.

Well, basically yes.

Or if not and they're caught out (as happened to many of us) not gripe that it's someone else's fault for having overextended yourself.

Whilst I do think that these changes could've been introduced more gradually, I also can't see having 4 children with only one working parent on a low(ish) wage as anything other than irresponsible.

Sorry.

zagfles

StixUK wrote: »

I don't think that it is a mistake anymore than someone assuming they can keep up repayments on a mortgage over a 25 - 35 year period and then being unable to afford it due to unforeseen circumstances.


I don't think it is anymore a mistake than anyone making a rational decision at a certain point in time and then it becoming a wrong decision in hindsight.


I think you make a mistake when you suggest that it was a mistake to have more than 2 children. Fiscal policies meant that it wasn't necessarily attractive to have more children but it was achievable if you managed your money in a controlled manner.


My tax credits income hasn't really increased in proportion to inflation or house prices in the time that I have had my children and now I have until April 2016 to mitigate a £75 decrease in my income, I don't have the opportunity to take advantage of fixed rates for two years plus.


This tax credits income change is a little too quick in my opinion as you are generally taking a great deal of income away from families that have had it engrained as part as their lifestyle since the late 90s.


People have lifestyles based on the money that tax credits have given them, with the reduction in allowance and the taper rate drastically increasing, don't you think it is going to cause people who genuinely have tried into financial difficulty.


There are people out there who were assessed by the banks and brokers for mortgages using their tax credits as an income and they are going to be in trouble as well.


The problem with this budget reform is that by reducing the tax credits you are affecting a good chunk of the UK and also the people who have done 'the right thing' and were claiming tax credits at the same time, should they have known better?


We could go into the morals of everything in Britain. Should bankrupt business not forecast a meltdown in the economy when it happened? Should anyone earning over £100k get ready for a sharp increase in income tax? Should I get ready for my council house to be sold to profit the council even though I am on a secure tenancy? Should I get ready for a divorce because I might split up with my wife, I may not see it coming, but should I be prepared?


You are stating that I should have forecast a drastic change to tax credits when the 10 years before I had my first child, it had been pretty static already. I repeat, you need to blame the government of the day for the fiscal policies that were in place at the time.


I am sure that you realise that fiscal policy tends to dictate a lot of the major decisions made by an individual within an economy and that it cannot all be put down to personal responsibility.


Fiscal policy dictates interest rates. If interest rates were 20% would you buy your house? No probably not. But as they were 0.5% a great deal more people have bought homes they cannot afford over the long term. Should these people anticipate an interest rate of 15% in 12 years time, for example?


You were asking me to be more responsible at the time I conceived my children, I concur that could have been an option. But I am not the only one that took advantage of a system that was in place to benefit my family. I do not feel guilty for it as I did not create the system and at the time my decisions were based on sound planning.


It is no different from a rich person losing a chunk of their money in the stock market. The only difference is they can probably afford to take the hit due to their fortunate position (i.e their income). With this drastic cut in tax credits you are taking away from people who will have to make tough decisions and this process could have been outlined before the election and people could have made an informed decision. The government deliberately didn't realise the details of the tax credits cut because they would have lost a huge chunk of votes.


I realise a need to save money but 9 months to lose a good percentage of your income, why couldn't this have been done slowly by 2020, as they managed not to pay the £9/hr until 2020, which should have been implemented by April 2016 like the tax credits cut.

Yes you have a point in that the cut is massive for low income working families - it really should have been phased in over a few years. It's likely that UC would give you more - so perhaps there's an underlying motive to make people clamour for UC.

zagfles

StixUK wrote: »

Err..how is any sort of rise a "freeze"? That's not nitpicking, that's a pointing out a factual inaccuracy. Most benefits ended up around the same in real terms (at least the base, untapered rates). The child element of CTC actually went up by way over inflation in the early years of the coalition, overall over 20%, way above RPI let alone CPI.

JSA & IS went up by 11.6% over the last 5 years, DLA about 15%. CPI was 11.8%, RPI was 15.6%. Hardly a "15% cut".


I find that using percentages is a crude method of comparison.


11% on a small income (i.e JSA) is the same as 2% on a larger income of say £15,000 to £20,000.


Percentages are used to confuse people in believing they are benefitting the same as everyone else or better. They offer no real comparison and do not offer a perspective in the nature of the rise vs costs elsewhere.

Sorry but that's just drivel. The point was comparing the percentage rise in benefits with the percentage rise in prices. If they are the same, then people are no worse or better off. If stuff costs 15% more, then you need 15% more income to maintain the same standard of living.

Or do you think it would be sensible to compare the cash rise a single person on JSA living with their parents gets to a family of 4 claiming tax credits, housing benefit as well as JSA?? Do you think they should have been the same, in cash terms rather than percentage terms??

StixUK

Just to add another point here.


The people who claim tax credits are hard working in most cases and they are going to see a total income cut.


The people who for whatever reason who are out of the tax credits system are going to see an overall pay rise.


This really hits the crux when people earn around the £43k plus mark.


Do you think that people who cannot earn a greater wage should be penalised first? Surely the people who work hard and can earn more should be hit as well in greater taxes?


I only make this point because the people who can earn lots of money aren't necessarily the hardest workers or the cleverest of people, they aren't better than me but maybe have been given better opportunities in life.


Yet as a result of my upbringing and limited opportunities I am being told that it serves me right.


But on the flip side, all those people who were given all the opportunities and are now doctors, within the law sector, etc etc are being praised for being so hard working and working our country out of this economic mess.


If you think this, I believe you are short sighted and ignorant. To make the top team in an organisation wealthy, there generally needs to be a shed load more workers below them. They owe their wealth to the people that keep the system running.


One man on his own cannot earn a lot of money in 99.9% of cases, they need people to run the business, do the books, make the products, sell the products, deal with customers, deal with complaints, adhere to their vision, deliver the return on the investment.


We are being told as workers near the bottom of the scale to work harder because we can work our way into a better situation and ultimately earn more money. What happens if you have reached your plateau and that is £6.50 on a checkout in a One Stop? What happens if your own mental issues stop you achieving? What happens if you single through no fault of your own?


A very archaic attitude is returning to Britain and the desecration of the lower paid in society is an abomination.


Isn't it funny how the people who run the banks and were paid millions and still benefitting from this income are now becoming forgotten. They made the decisions to push sub-prime people into situations they were told they could ill afford.


But hey the removal of £1,000 per annum from me will make up for all that. Go tax that rich person earning more than £40,000 a couple of percent more that will fill the gap and they will be able to accommodate the decrease in income as it will be removing a luxury not a necessity.


Britain should be aiming for a fairer society and I couldn't care less about the OECD figures, we are meant to be a flagship economy. We have gone through all the relevant growth cycles and now we are a matured economy, we should be appreciating each other much more.


I have no issue with rich people per se, but their foul attitude towards me and my family makes me lose respect for them. I cannot earn £40,000 plus for reasons unknown to me, maybe I am not clever enough or hard working enough. They are lucky and fortunate that they have been given the brains, the attitude or the headstart on life to achieve this income but I tell you what I am one of their minions, working hard for them on my £15,000 per annum to help them achieve their results.


They don't work harder than me at all, my manager sits at home on a Friday dealing with e-mails. I am out on the road, putting physical graft in to allow him to go back to his manager to show pictures of the job to prove that his team are working well. Yet he gets between £25,000 and £30,000 for his role.


Maybe our esteemed government could become a first adopter of a new way of thinking, introducing a truly fairer society for all.


I don't know why anyone needs to earn more than £100,000 in todays world apart from pure greed. Tax them a lot, they can do their bit to contribute to the self sustainability of their economy, the one they are making their money from.

StixUK

zagfles wrote: »

Err..how is any sort of rise a "freeze"? That's not nitpicking, that's a pointing out a factual inaccuracy. Most benefits ended up around the same in real terms (at least the base, untapered rates). The child element of CTC actually went up by way over inflation in the early years of the coalition, overall over 20%, way above RPI let alone CPI.

JSA & IS went up by 11.6% over the last 5 years, DLA about 15%. CPI was 11.8%, RPI was 15.6%. Hardly a "15% cut".It doesn't affect those who don't work at all. That was the point. Like I said it affects low paid people in work and intermittant work most. Yes, for a while benefits were rising faster than earnings. Same with pensions, same with education, same with health, politicians can't help tinkering but it means there's no stability in the system.

zagfles wrote: »

Sorry but that's just drivel. The point was comparing the percentage rise in benefits with the percentage rise in prices. If they are the same, then people are no worse or better off. If stuff costs 15% more, then you need 15% more income to maintain the same standard of living.

Or do you think it would be sensible to compare the cash rise a single person on JSA living with their parents gets to a family of 4 claiming tax credits, housing benefit as well as JSA?? Do you think they should have been the same, in cash terms rather than percentage terms??

OK I didn't realise that, sorry.


All you have to be sure though is that the figure given to people on JSA is actually enough to pay all your bills in the first place. It would be no good getting a like for like rise if, for example, they weren't getting enough money 10 years ago.


We also have to be considerate that some younger claimants who may be living by themselves receive less money only due to their age, so are harder hit if everything else remains constant.


Does this increase also include the requirement to pay Council Tax if you are claiming and under the age of 65, because that took around £3 - £4 per week off a person down this part of the world, in a Band A Property.