Benefit cuts to hit more than 330,000 children

pmlindyloo

The question shouldn't be if the government should financially support families on low incomes but by how much.

Tax credits aren't going to be abolished. Housing benefit continues. So does Council Tax Support. So does Child Benefit.

In Sxcizme3010's case it is likely that they struggling because of high mortgage costs, not because their annual income isn't sufficient. Hence my offer to look at their expenditure.

There is always an answer to cutting down on expenditure. S. is sensible enough to know that things will improve as she finds full time work and sorts out her child care. Lots of people go through times when they are less well off when the children are little.

In S's case she has a fall back position as she can sell the house and rent.

bloolagoon

Well when you have posters saying OMG how can I manage on the loss of TC and you know they own homes and have huge savings and a good accountant to keep the figure low, you do lose sympathy

FBaby

I also think that what many 'struggling' families relaying on tax credits forget to say is that a large chunk of their budget has to go on repaying debts.

Of course there are various reasons to end up in debts, and some through no fault at all of the family, but going on the debt-free board shows that many get into debts through indulging spending.

Many of these families would do just fine on their income if they didn't have to repay debts.

NYM

In Sxcizme3010's case it is likely that they struggling because of high mortgage costs, not because their annual income isn't sufficient. Hence my offer to look at their expenditure.

There is always an answer to cutting down on expenditure. S. is sensible enough to know that things will improve as she finds full time work and sorts out her child care. Lots of people go through times when they are less well off when the children are little.

As you've mentioned a particular posters circumstances, this is a post they made very recently..

Ok I owe

£10400 car finance £219 pm 47 months remaining
£7000 loan £200 pm 35 months remaining
£4150 Barclaycard (interest free) currently £100 pm payment
£1200 Lloyds CC - £50 monthly payment
£530 - sofa and dining table £45 pm
£700 - HMRC - £50 pm
£500 - Wedding rings £67 pm

So its actually 24500 :-(

They appear to be making a considerable payment each month to service that debt but once it's paid off, the reduction in the tax credits will be easier to cope with.

TheGardener

Spendless wrote: »

Once upon a time a family working 1.5 jobs with young children wouldn't have received a benefit top up for their wages in the manner it's been for the last 12 years. .

Let not forget that before WTC - there were tax allowances - for being married, for having children, for mortgage interest etc - and couples could share their allowances to get maximum tax free earnings. The govt of the time removed all tax allowances and everyone paid single persons at the same basic rate no matter how much you earn (until you get into the high earner brackets). so there was help for all families in that respect.
The lunacy is that they take it at source with one hand and give it back with another (or not, as now appears to be the case)
Meaningful reductions in tax liability for the lower paid and removal of WTC would save millions just in administration costs and all but wipe out fraudulent claims.

sxcizme3010

NYM wrote: »

As you've mentioned a particular posters circumstances, this is a post they made very recently..




They appear to be making a considerable payment each month to service that debt but once it's paid off, the reduction in the tax credits will be easier to cope with.

Yes - you are right and most of them will be paid off by April anyway however we were earning enough to cover these things and when things changed obviously then we have to make sacrifices. We manage - and by time my income goes up we will be in a much more comfortable position however my point is that not everybody who claims tax credits is a scrounger!

Spendless

TheGardener wrote: »

Let not forget that before WTC - there were tax allowances - for being married, for having children, for mortgage interest etc - and couples could share their allowances to get maximum tax free earnings. The govt of the time removed all tax allowances and everyone paid single persons at the same basic rate no matter how much you earn (until you get into the high earner brackets). so there was help for all families in that respect.
The lunacy is that they take it at source with one hand and give it back with another (or not, as now appears to be the case)
Meaningful reductions in tax liability for the lower paid and removal of WTC would save millions just in administration costs and all but wipe out fraudulent claims.

That must have been a while back because I'm not aware of it. When was it? I agree that there was tax allowances and that I would support there being again, but the childrens one was taken away a number of years ago. I remember a colleague having twins in 1993 and querying it with the tax office and it had gone several years before then.


The married mans allowance we got when we married in 1999 for 9 months but that went in April 2000 and though they fetched one in for children that only started in 2001, which was then superseded by the current system in April 2003.


The MIRAS system reduced over a number of years before going altogether.

pmlindyloo

sxcizme3010 wrote: »

Yes - you are right and most of them will be paid off by April anyway however we were earning enough to cover these things and when things changed obviously then we have to make sacrifices. We manage - and by time my income goes up we will be in a much more comfortable position however my point is that not everybody who claims tax credits is a scrounger!

I don't think many people have said that people on a low income claiming tax credits are scroungers.

As it stands, and has previously been said, there will be people who, through no fault of their own, will only manage to earn low incomes. Tax credits will continue to exist for those.

What the reform has sought to do is reduce the level of tax credits to prevent people from abusing the system and working the minimum amount of hours because they knew that their income could be 'topped up' by tax credits.

Universal credit has already addressed this problem - the abuse of hrs and abuse of the system by some self employed who even after some time are earning less than the NMW in their self employment.

In my opinion benefits should be provided to 'protect' people financially, not to provide a system that allows the able bodied to rely on the state to the extent that they can 'under perform' and relinquish responsibility.

I honestly believe that we have a society that has over reliance on the state instead of using it as a safety net. And I mean a safety net that doesn't include money for anything other than the necessities of life. Unfortunately, and again just my opinion, the necessities in life now include a multitude of expectations/'rights', previously designated 'luxuries'.

So many people never 'save for a rainy day', save up for something instead of the 'must have it now' attitude, over stretch themselves... I could go on and on.

As you can tell I have a lot of despair about our society.

curty510

I'm now in a position where I'm comfortable, kids grown up etc and two wages coming in.
But it wasn't always that way, we really struggled when our family was young, only one wage etc and no such handouts as tax credits. But we got by.

I think a lot of people have become too dependant on benefits, I have found personally that you will always live too your means. If that means no sky tv, car, holiday then so be it. We never had a nice car or overseas holidays, but nowadays these items are classed as essential not luxury.

I'm sure there is no reason to worry or panic, cuts are coming and belts need tightening.

bloolagoon

curty510 wrote: »

I'm now in a position where I'm comfortable, kids grown up etc and two wages coming in.
But it wasn't always that way, we really struggled when our family was young, only one wage etc and no such handouts as tax credits. But we got by.

I think a lot of people have become too dependant on benefits, I have found personally that you will always live too your means. If that means no sky tv, car, holiday then so be it. We never had a nice car or overseas holidays, but nowadays these items are classed as essential not luxury.

I'm sure there is no reason to worry or panic, cuts are coming and belts need tightening.

They have come to see tax credits as a pay supplement. Some rely on them to exist others to pay luxuries.

I honestly think they should have left the tax break so all got benefit and the old income support model and low income top ups. The effects have been disastrous. I dont know any other country that handles in work benefits like we do and they seem to do better.