Turning down wage increase to maintain benefits

bloolagoon

SnooksNJ wrote: »

The mindset is your wife should work 50 hours to support the people who won't work a minute over 16 hours.

In addition to their own 50 hrs

zagfles

SmokieJoe wrote: »

Hi, wondered if anyone here can answer this. Small number working in an office and the employer has offered a pay rise. The staff have declined the rise as it would cause them to miss out on other benefits, and the rise doesn't make up for the shortfall. Could this affect the benefit entitlement if DWP or Tax Credits were made aware of the decision to decline an offered pay rise?

This sounds utter bulls**t. There are hardly any circumstances in which getting a payrise would make you worse off. There are a few very specific circumstances where it might happen but the chances of those circumstances applying to an office of people (even a small office) is vanishly unlikely.

Either the staff are clueless or it's troll...

bloolagoon

zagfles wrote: »

This sounds utter bulls**t. There are hardly any circumstances in which getting a payrise would make you worse off. There are a few very specific circumstances where it might happen but the chances of those circumstances applying to an office of people (even a small office) is vanishly unlikely.

Either the staff are clueless or it's troll...

It's common for overtime to be refused so a payrise if they have already calculated their disregard is possible.

zagfles

bloolagoon wrote: »

It's common for overtime to be refused so a payrise if they have already calculated their disregard is possible.

Well yes but overtime means working extra hours - sometimes people may only be marginally better off so it's not working extra for (in some cases) less than £1 per hour.

But a payrise is extra pay for no extra work. Even if they lose 90% of the extra pay in tax/NI/loss in tax credits & benefits, they are still better off for doing no extra work.

The tax credits disregard is not a cliff-edge. Even if exceed the disregard you'll only get tax credits reduced by 41% of the extra, not the total. So you're still better off.

restless6

Where's their aspiration to climb the ladder and leave tax credits behind ?

kittygirl20

tea-bag wrote: »

This is one of the things wrong with this country! My wife works in a large retail shop and many of the other workers REFUSE to work a minute more than 16 Hours a week as they lose too much in benefits. It is wrong as there are lots of hours going my wife could work 50 hours if she wanted.

Totally agree, am in the same position. Always getting hassled for overtime even though I work in retail just for something to do above being self employed (Where I don't have a lot to do) I want to work around 20 hours max and the amount of women there refusing to work over the 16 hours and thinking they deserve a pat on the back for working!!

My motto has to be that more money is always good, even though every £1 I earn there gets taxed at 20 per cent.

SmokieJoe

zagfles wrote: »

This sounds utter bulls**t. There are hardly any circumstances in which getting a payrise would make you worse off. There are a few very specific circumstances where it might happen but the chances of those circumstances applying to an office of people (even a small office) is vanishly unlikely.

Either the staff are clueless or it's troll...

From the Hansard record - Steve Double (St Austell and Newquay) (Con): "....... I have offered pay rises and additional hours to members of my staff, and they have turned them down because of the tax credits that they would lose as a result." Made during the recent Welfare Reform debate in the HoC. Yeah, he's probably a Troll!

[Deleted User]

The only scenario I can think of where they would be worse off, is if pretty much every deduction under the sun was coming off...

20% income tax
12% NI
9% student loan
65% universal credit withdrawal

Meaning that for every £1 of pay rise, they'd have 6p less in their pocket.

JimmyTheWig

I agree with zagfles (I often do, I find) that it is an unlikely sounding situation.

There are cases where it wouldn't be in their interest (e.g. earning between £50k and £60k with 5 or more children) to have extra money coming in, but as rogerblack says they can just pay the extra into a pension and be in the same position for now and better off when they retire.

There may be other cut-offs where this isn't an option, though I don't know. I'm thinking about things like free school meals (which also opens the door to other school related help), free prescriptions, etc.

Obviously if they are being asked to do more work / take on more responsibility for this extra money then I can see the point in turning it down if the only gain they'll see is when they retire in 30 years time.

Pennywise

It's not just tax, NIC and tax credits though, is it?

A slight wage rise may affect someone's right to council tax relief, free prescriptions, housing benefits, free school meals, school bus passes, etc.