Can someone explain benefits please?

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I'm not having a rant about benefits, I am genuinely interested in what the criteria is.

I earn £35k so after pension, take home is around £2050. My wife looks after the 2 pre school children but retains a zero hour contract for her old job and brings home about £500-£600 a month on average.
The only other income is whatever the money you get for having 2 children, something like £34 a week.

I often read the DFW board and I don't understand some of the figures. A recent example is :
Adults - 2
Children - 4
Take home 1 - £555
Take home 2 - £1731
Benefits - £787
Other income - £650

Per month that is over £2900 then another £780 in benefits.

Can anyone explain how that works please, am I entitled to more money from the government?

Like I say, I am genuinely interested how people who earn less end up with a lot more. Is there something I should claim for?

Comments

  • Indie_Kid
    Indie_Kid Posts: 23,077 Forumite
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    Assuming neither child has a disability for which you claim DLA for / registered blind, the cut off for tax credits is £32k for two children.
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  • cliffandsue
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    Indie_Kid wrote: »
    Assuming neither child has a disability for which you claim DLA for / registered blind, the cut off for tax credits is £32k for two children.

    Hence the reason why people sometimes refuse to do overtime or accept a promotion. It simply doesn't pay financially.
  • Caz3121
    Caz3121 Posts: 15,561 Forumite
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    gr1340 wrote: »
    Children - 4

    Can anyone explain how that works please, am I entitled to more money from the government?

    your answer was in your post, you are comparing the benefit rates for 2 children with those for 4 children
    there may have been help with childcare included in the "benefits" number as both working over 16 hours
  • [Deleted User]
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    For tax credits, one thing to understand is the "marginal tax rate" - that is, how much you get taken off you for each extra £ you earn.

    Example:

    Joe Bloggs went to uni, and now has a job where he earns £20000 a year. His wife doesn't work. They've got one child, and are getting around £500 Child Tax Credit a year.

    Joe's considering bringing in some extra cash, so he's thinking of taking a few hours at a local shop in the town centre on a Saturday. It'll be a minimum wage job, so £6.70/hour.

    From that, Joe will pay 20% income tax, 12% national insurance, and 9% student loan deduction. On top of that, for each £1 he earns, he loses 41p of Tax Credits (41%).

    Therefore, Joe's "Marginal Tax Rate" is 81% (20%+12%+9%+41%). This means that for each hour Joe works and "earns" £6.70, he loses 81% of it, and keeps the remaining 19% - or £1.27.
  • [Deleted User]
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    confusing marginal tax rate and tc deduction is not how you arrive at any figure
  • Pollycat
    Pollycat Posts: 34,757 Forumite
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    gr1340 wrote: »
    I'm not having a rant about benefits, I am genuinely interested in what the criteria is.

    I earn £35k so after pension, take home is around £2050. My wife looks after the 2 pre school children but retains a zero hour contract for her old job and brings home about £500-£600 a month on average.
    The only other income is whatever the money you get for having 2 children, something like £34 a week.

    I often read the DFW board and I don't understand some of the figures. A recent example is :
    Adults - 2
    Children - 4
    Take home 1 - £555
    Take home 2 - £1731
    Benefits - £787
    Other income - £650

    Per month that is over £2900 then another £780 in benefits.

    Can anyone explain how that works please, am I entitled to more money from the government?

    Like I say, I am genuinely interested how people who earn less end up with a lot more. Is there something I should claim for?
    There are 2 benefit checkers on this link. Inputting your actual details will tell you if you can claim anything (don't hold your breath):
    https://www.gov.uk/benefits-calculators
  • gr1340
    gr1340 Posts: 80 Forumite
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    Thank you for your replies.

    I think I understand now. It just didn't seem right that you could earn less but because of benefits you end up with more. However, I understand there may be other reasons why the benefits are nearly £800 a month such as DLA.

    I don't think we are entitled to anything else as my wife also receives a 50% share of 2 rental incomes and sometimes receives a dividend from her business.

    I don't feel we need to claim any benefits though, we are happy with out situation.

    Once again, thank you for explaining the system in better detail.
  • Sncjw
    Sncjw Posts: 3,511 Forumite
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    It looks like your getting more if you dla or pip and also child or working tax credits but remember they have to pay costs of looking after disabled child so with the care taken care of money wise it may come down to same level but may be less as care is expensive.
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