Tax Credits

MFW_ASAP

Graham_Devon wrote: »

And finally, none of them would pay out if you were made redundant from your full time position but then offered a part time position. If you turn down the part time position that's voluntary redundancy and the insurance is null and void.

As usual, you're talking rubbish Graham.

lisyloo

This isn't really relevant to the impending changes though, more a response to the "can't afford kids don't have them rhetoric".

I don't agree with that rhetoric, but MFW's terminology is spot off.
Benefits should be safety net, not a lifestyle choice or excuse not to plan.

The arguments about insurance are moot - anyone can save for anything they like at any time. Contingency is not limited to formal insurance policies in fact it can be poor value.

Don't spend as much as you earn and save the rest.
If you have zero to save then how are you going to afford all the things a child needs? so perhaps it's not the right time to have a child?

gadgetmind

Graham_Devon wrote: »

Is there such an insurance product that will cover you for loss of income in the following circumstances?

- Less hours
- Redundancy from any part time job

It's called "an education".

Graham_Devon

MFW_ASAP wrote: »

I'm surprised. From your post you seemed completely unaware that redundancy insurance exists and yet just a few minutes later, you're an expert on the subject!

No I wasn't - I asked a specific question about whether such a product exists that would pay out on my two scenarios.

lisyloo

I asked a specific question about whether such a product exists that would pay out on my two scenarios.

You can get a savings account (or even put it under the mattress).
Payouts are admitedly poor to begin with if you are unlucky enough to fall on hard times in the early years, but improve over time.
There is no profit taken off and no admin charges and it can payout for ANY circumstances.

So not having a formal product cannot be used as an excuse to do nothing.

Graham_Devon

Yes, wondrous. Just create a savings account and you'll be sorted.

Easy as that!

You should let Martin know, I'm sure this would go out in his e-mail as a top tip for those using tax credits. Just create a savings account, life is glorious once again!

MFW_ASAP

Graham_Devon wrote: »

No I wasn't - I asked a specific question about whether such a product exists that would pay out on my two scenarios.

And I answered you. You then changed the parameters to suggest the product should not only cover the scenarios but provide complete lifetime cover. You now appear indignant/surprised that no such product exists.

People need insurance and benefit packages to help them get back on their feet when they have fallen over. They shouldn't receive indefinite handouts just for being alive.

Graham_Devon

It appears Osbourne is now back peddling a bit...

George Osborne will soften the impact of his planned tax credits cuts if peers step back from a confrontation with the government and instead back a “regret motion”, the Cabinet Office minister, Matt Hancock, has indicated.

michaels

Graham_Devon wrote: »

This has been discussed several times in the media with the tories claiming more childcare sorts out earning issues. It doesn't.

In theory, yes, they can work longer hours. Much of the time though they are low income precisely because they cannot get longer hours. Have a look at tesco jobs for instance, the vast majority are all part time 20 hour jobs at weird times.

If the jobs are there, all is fine and dandy. But that's textbook stuff, it's not real world stuff.

Except you didn't answer the substantive point re how much tax credits yo think a couple with 2 kids on 26k should get? I don't know how much housing and council tax benefit you would get with this income but I have 3 kids and we spend less than 22k pa (net of 26 gross) after housing costs.

Graham_Devon wrote: »

I think the majority generally agree that tax credits should be reduced hand in hand with raising the minimum wage.

However, to receive £10 extra a week because the minimum wage has increased and to lose £50 a week from tax credits is where people take issue.

It's the sheer size of the income drop that's the issue. This isn't about "people being livid" or whatever other meme you wish to create. Even those not getting a single pound from the tax credit system can see the issue.

We had 2.4k per annum taken off us at a stroke with the removal of child benefit, no talk of needing time to transition for that one.

wotsthat wrote: »

Maybe. I looked at that infographic and was just stunned by the amount of money being given away. You can't legislate people richer - they need to earn more or work more hours or both. Easier said than done but if it were me I'd find the potential loss of £1000 quite a motivator.

Less than two hours a week on minimum wage would make up the difference for the low income single parent or low income family.

No because they are effectively taxed at marginal 81% or more with NI, income tax and the removal of tax credits; where as for a high earner an marginal tax rate of 52% is considered enough to deter them from working more.

wotsthat

michaels wrote: »

No because they are effectively taxed at marginal 81% or more with NI, income tax and the removal of tax credits; where as for a high earner an marginal tax rate of 52% is considered enough to deter them from working more.

When I was skint with three kids and tax credits hadn't been invented my wife (if we included child care) paid a marginal 'tax' rate of 90%.

Today we wouldn't get out of bed to work extra hours at that tax rate but then we did - we needed/ wanted the 10% that was left.

It makes sense to me that the better off will be deterred from working at lower marginal rates than the less well off.