Tax Credits

andrewmp

martinsurrey wrote: »

https://www.gov.uk/guidance/tax-credits-working-out-income

net rental income is included in the income calc for WTC.

I don't mean someone who owns a buy to let. I'm talking about income towards housing costs that is received by someone renting, ie Housing Benefit, whereas someone earning £16k with a mortgage would get no housing benefit.

This could mean, that overall, someone on £0 and renting is better off financially than someone on £16k with a mortgage. It won't always be the case, but it could happen.

wotsthat

This has nothing to do with tax credits and all to do with politics.

Labour and the SNP should be holding their heads in shame. They're such a !!!! poor opposition they didn't hold the government to account and it's been left, ironically, to an unelected body to rescue the left of politics. Not that they care - Labour are too busy building a party of left wing, white, middle aged and middle class 'revolutionaries' and the SNP couldn't give a flying fig about anything else but independence - like most ideallists any pain on the journey to utopia is worth it.

The Lords debate meanwhile showed just how out of touch they are - they didn't have the first clue about tax credits - they just fancied giving the government a bloody nose.

Lesson number one for big government - don't give away money unless you have a strategy to stop giving away money at the outset.

wotsthat

andrewmp wrote: »

I don't mean someone who owns a buy to let. I'm talking about income towards housing costs that is received by someone renting, ie Housing Benefit, whereas someone earning £16k with a mortgage would get no housing benefit.

This could mean, that overall, someone on £0 and renting is better off financially than someone on £16k with a mortgage. It won't always be the case, but it could happen.

The creation of a system where some perfectly able adults are favoured over other perfectly able adults by the gift of free money will always lead to discrepancies and oddities.

Funnily enough these things only became of interest when Autumn arrived at the money tree.

martinsurrey

andrewmp wrote: »

I don't mean someone who owns a buy to let. I'm talking about income towards housing costs that is received by someone renting, ie Housing Benefit, whereas someone earning £16k with a mortgage would get no housing benefit.

This could mean, that overall, someone on £0 and renting is better off financially than someone on £16k with a mortgage. It won't always be the case, but it could happen.

Yes, as it should, just like someone on £0 who rides the bus should be better off than the person on £16k who buys a Porsche to drive around in, benefits should be there to support when there are no other options, selling or moving are an option.

andrewmp

martinsurrey wrote: »

Yes, as it should, just like someone on £0 who rides the bus should be better off than the person on £16k who buys a Porsche to drive around in, benefits should be there to support when there are no other options, selling or moving are an option.

So you think someone not working, earning nothing and claiming JSA should be better off financially than someone working full time?

Fair enough, you're entitled to your opinion. To me, everyone needs a home to live in, why should a working person be worse off just because they've got a mortgage to pay.

Selling up and renting instead would simply cost the tax payer more money. The Porche comparison is stupid IMO, I'm taking comparable houses here, not a mansion and a two up/two down.

andrewmp

wotsthat wrote: »

This has nothing to do with tax credits and all to do with politics.

Labour and the SNP should be holding their heads in shame. They're such a !!!! poor opposition they didn't hold the government to account and it's been left, ironically, to an unelected body to rescue the left of politics. Not that they care - Labour are too busy building a party of left wing, white, middle aged and middle class 'revolutionaries' and the SNP couldn't give a flying fig about anything else but independence - like most ideallists any pain on the journey to utopia is worth it.

The Lords debate meanwhile showed just how out of touch they are - they didn't have the first clue about tax credits - they just fancied giving the government a bloody nose.

Lesson number one for big government - don't give away money unless you have a strategy to stop giving away money at the outset.

I agree entirely. The Labour Party (pre Corbyn) rolled over and let the Finance Bill go through unopposed. Post Corbyn they're a shambles for other reasons.

zagfles

andrewmp wrote: »

I believe he thought he could slip it through without much scrutiny if it was in a SI.

He seemingly played a blinder in June, the press/most people (barring a few on here) seemed to way underplay the degree of the cuts, part of that surely must be because the new Child Tax Credit threshold was never mentioned by anyone in government until the SI. Those in the know knew how the Child Tax Credit threshold was calculated, but big hitters online with their calculators, and therefore the press basing their articles on these calculators had no idea.

Just goes to show - don't believe what you read in the papers, we know better on the MSE forums :money:

So yes, I think he thought he was being clever, the bloke is no mug, he does everything for a reason.

Exactly - and they could easily turn this defeat into a propaganda win. People who don't claim tax credits are generally totally clueless about them. They think it's just a top up of wages of a few quid for the lowest paid. This controversy could help educate them.

Some examples: as mentioned earlier a family 2 kids with 1 earner on £11k would get about £9000 tax credits.

A single parent with 2 kids earning £20k plus £5k a year maintenance payments could get over £16,000 (inc childcare) tax credits.

The example mentioned in Lords last night, the couple with the 2 disabled children who'll lose £3120. Well to lose £3120, income would be £33,368 including presumably carer's allowance. Tax credits would likely be around £6000-9000 depending on level of disability, plus DLA of anything between about £2,000-14,000.

The losses are big, much bigger in general than the press have been highlighting, but rather than just highlighting the losses, perhaps the govt will try to move the propaganda battle to a "before and after" picture. I think this would open some peoples' eyes!

martinsurrey

andrewmp wrote: »

So you think someone not working, earning nothing and claiming JSA should be better off financially than someone working full time?

Fair enough, you're entitled to your opinion. To me, everyone needs a home to live in, why should a working person be worse off just because they've got a mortgage to pay.

Selling up and renting instead would simply cost the tax payer more money. The Porche comparison is stupid IMO, I'm taking comparable houses here, not a mansion and a two up/two down.

Instead of using hypotheticals can you give a concrete example of what you mean, so show me how 2 people one earning £0 and one earning £16k in the same situation otherwise, and the £16k one is worse off.

andrewmp

martinsurrey wrote: »

Instead of using hypotheticals can you give a concrete example of what you mean, so show me how 2 people one earning £0 and one earning £16k in the same situation otherwise, and the £16k one is worse off.

Working couple with three kids and a mortgage (costing £550 per month rent), earning £16k per year would receive the following per month:

Salary £1,163.93
Tax Credits (if cuts went ahead) £653.40

Total : £1817.38 (plus CB)

Unemployed couple with three kids, three bed house costing £550 per month, earning £0 per year would receive the following:

JSA £500.41
Tax Credits (if cuts went ahead) £740.84
Council Tax Support : £60.60
Housing Benefit £550


Total : £1851.85 (plus CB)

So in this real world example, the unemployed couple would be better off, they'd also be pass-ported to free prescriptions, free school meals for the kids etc and have no travelling expenses to get to/from work.

Feel free to pick holes in my figures. The point of my argument is JSA+Housing Benefit is sometime more than a low salary thus working people with a mortgage can be financially worse off than those who don't work.

Graham_Devon

martinsurrey wrote: »

the thing is to me and most people in my office, its the lords that are coming off worse here.

The commons voted 3 times on this, and it passed 3 times. Like the measure of not, its been voted on by our elected representatives.

The lords are un elected, and by defying 100's of years of convention we'll see a weaker House of Lords as a result, as they obviously cannot self regulate.

Yes, I can see where people are coming from here.

However, even a Tory MP has stated now that if he knew the full impact of what he was voting for in the commons at the time he wouldn't have voted the way he did. So it appears he is now armed with the full information about how this will impact people and will vote differently.

It's kind of given a chance for MPsto vote on something now they know the full impact.

The votes before this were undertaken in a way which made the results of the policy look far less damaging.