Tax credits cut petition

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blondebubbles wrote: »

Unless you earn enough to actually come off tax credits then there is barely any incentive to in many cases.

Assuming your personal allowance, NI allowances are already used, for every £1 earned, you'd pay 20p in tax, 12p in NI and 48p (41p currently) in tax credits.

So for that extra £1 earned you'd have 20p left over. But you may also have additional travel costs and other expenses.

Say you are a single parent, with one child and childcare of £175 per week. You earn £11,000 for 30hrs:
Net pay: £10,569
Plus Tax credits: £12,597
Minus childcare: £9,100
Total income: £14,066

You have the option of increasing your hours to 40 per week, earning £14,667. This increases your childcare to £218 per week which you cannot claim any extra for.
Net pay: £13,063
Plus Tax credits: £11,093
Minus Childcare: £11,336
Total income: £12,820

So you are actually worse off.

Thanks for explaining

I take it with the new changes it makes it a lot better off working vs. the tax credits?

zagfles

blondebubbles wrote: »

There still seems to be many people who don't get salary sacrifice, especially in smaller businesses. That and it can't be used if it reduces income below NMW.l so that prevents people from getting full use of it.

The figures I've used are just slightly above the average childcare costs in the UK, currently £212 per week I believe.

That'll be full time childcare I assume, ie pre-school children, rather than after-school childcare.

Is there really any point in a single parent/second earner on NMW working with a pre-school child? I could understand it if they had a high-flying career where they'd get left behind if they took a few years out - but then they'd be on far more than NMW.

OhWow

dizzybuff wrote: »

if I can or attempt to.do anything I'll lose more tax credits.

That's been the problem, people not wanting to do anything that makes their benefits reduce.

The aim should be to get off benefits asap.

OhWow

blondebubbles wrote: »

More help should be available for those who are working full time but are having to pay childcare in order to work.

They could work around each others hours. Isn't that's how it was done before the welfare state paid childcare costs?

OhWow

blondebubbles wrote: »

How is a single person meant to do that?

Do self employment from home doing something that makes a profit of at least NMW. That's how it would have worked before Tax Credits allowed people to pretend they were SE to get extra benefits and avoid the job centres.

FBaby

Surely if children starts to get 30 hours free childcare, then even single mothers should be expect to look for work for 24h at least as soon as this kicks in? Why wait until they start school?

zagfles

blondebubbles wrote: »

Yes that's based on full time childcare.

Under current rules then no, there isn't much point. That to me is the issue. More help should be available for those who are working full time but are having to pay childcare in order to work. Instead they are penalising those who are working more. Not everyone has grandparents to rely on, especially with pension age increasing.

I also don't understand why the 15hrs free childcare (later to be 30hrs free childcare) is for 3-4 year olds. The incentive should be there for after maternity leave finishes. Or instead of 30hrs free for 3-4 year olds, have 15hrs free for all children between 1-4.

But why should the govt subsidise childcare when the cost of childcare is almost the full wage earnt? Why is that seen as a good idea and looking after your own children seen as a bad idea?

zagfles

blondebubbles wrote: »

Why should the government continue to pay people to sit at home rather than help people into work?

They are not "sitting at home". They are caring for their child. Why should caring for your own child be seen as sitting at home idle, whereas caring for someone else's child (ie what a childminder does) be seen as work worthy of subsidy?

What if two single parents decided to be become childminders and they swapped children, so they are now both "working" as childminders looking after someone else's child, rather than "sitting at home" looking after their own child. Is that better than them simply looking after their own child?

zagfles

blondebubbles wrote: »

I'm not going to argue with you on this.

Aren't you?...

You are entitled to your opinion as I am entitled to mine.

I believe people should work unless an illness or disability prevents them from doing so. They should financially contribute to the upbringing of their own child. That is my opinion.

They are not financially contributing if they earn hardly any more than the cost of childcare. They need a subsidy whatever they choose to do, whether it's income support or childcare tax credits

If you are in a position to stay at home and look after your own child without government help then do that if you like. But I do not agree that the government should provide benefits to someone who chooses to do so.

Good job even this govt disagree then. Otherwise you would get parents"swapping" children and both "working" as childminders instead of "sitting at home" idle. It could be a good benefits scam too

FBaby

zagfles wrote: »

They are not "sitting at home". They are caring for their child. Why should caring for your own child be seen as sitting at home idle, whereas caring for someone else's child (ie what a childminder does) be seen as work worthy of subsidy?

What if two single parents decided to be become childminders and they swapped children, so they are now both "working" as childminders looking after someone else's child, rather than "sitting at home" looking after their own child. Is that better than them simply looking after their own child?

But if their child is away for 30 hours a week then they are not looking after the child during 6 hours a day. So why can't they work?