Can't work out if new job pays - help?

planner590

Hello,

I hope someone can help me, I'm getting so worried and stressed trying to work out if my new job is actually going to leave me worse off.
I'm sorry if this is long/overly complicated, I've tried over and over to make sense and getting nowhere so far...

I'm a single parent, 2 children 6 & 4.

In theory I will have significant payrise, going from £7680 (16 hours p/w) to £16800 (28 hours a week).
I will have child care to pay (didn't have this cost before) of, roughly, an average £35 p/w.
On top of that I'll now have bus costs of about £50 a month to pay (obv I know that's not counted in tax credits, but it's an extra cost to take into account).

I've done the entitled2/turn2us calculators and everything seemed to work out ok, with me ending up roughly £80 a month better off - unsure about council tax support, that may take it down to £60.

However, I've just spoken to housing benefit people and tax credits on the phone and now I'm feeling quite worried, as their figures are quite different to the online calculators. Housing benefit state I'll qualify for at worst £5 p/w and at best £25 p/w - all depending on the tax credits I get.
Tax credits state I'll get £175 a week for 2016-17 (which is good) but £135 a week after that, 2017-18 and onwards, which I think puts me at a loss. I think. At this point my brain is melting.

I'd be so grateful if anyone can help me work this out, I really struggle to believe I won't be better off working more hours and getting a higher salary, but I'm starting to panic.

Thanks,
planner590
(Not a new poster but can't seem to get into my old account)

missbiggles1

If you have a Lone Parent Advisor at the Jobcentre, they should be able to do this calculation for you more accurately.

However, as this new job would seem to be giving you a 25% pay rise I imagine it must indicate career progression so could be worth taking even if you'll be very slightly worse off over all in the short term.

Darksparkle

Any chance of increasing to 30hrs? You get an extra element of tax credits for doing so.


I can only comment on tax credits. So at the moment you should be getting tax credits of around £184 per week. Is that about right?

By my calculations, if from April your earnings increased to £16,800 you'd get approx £156 per week tax credits and from April 2017, £136 per week.

So just from that you're going from:
Income £148 per week
Tax Credits £184 per week
Child Benefit £34 per week
Total £366 per week

To
Income £280 per week (approx net)
Tax Credits £156 per week
Child Benefit £34 per week

Less Childcare & Bus £46 per week

Total £424 per week or £58 per week better off. From April 2017 that'll go down by £20 which still leaves you £38 per week better off.

planner590

Thanks missbiggles - it's definitely a good career progression, and a chance I think I'm unlikely to be lucky enough to get again, so whatever happens I'm still taking it. I'm just a bit worried I'm putting us through a lot of stress timewise and being stretched financially for it. I won't need childcare forever, and I'm trying to focus on the bigger picture. But it'd still be nice to know where I am moneywise.


ETA: I don't know what we have at the jobcentre, I've never been. I might look into, thanks.

planner590

Sorry Darksparkle, I didn't see your reply before. Thank you, that's great - I'll look over it properly in a bit but at a quick glance I think you're pretty much spot on.

I didn't know about the 30 hours thing so thank you for that - I'm pretty sure there's scope for me to do extra hours and I might see if I can work that in, it'll be tricky to fit in but if it works out better it might worth the sacrifice.

I tend to work everything out on 4 week months and ignore 5 week months as I'm not used to working weekly so I wonder if that account for some of my confusion.

Darksparkle

planner590 wrote: »

Sorry Darksparkle, I didn't see your reply before. Thank you, that's great - I'll look over it properly in a bit but at a quick glance I think you're pretty much spot on.

I didn't know about the 30 hours thing so thank you for that - I'm pretty sure there's scope for me to do extra hours and I might see if I can work that in, it'll be tricky to fit in but if it works out better it might worth the sacrifice.

I tend to work everything out on 4 week months and ignore 5 week months as I'm not used to working weekly so I wonder if that account for some of my confusion.

Depends how you get paid and pay your bills etc. I get paid monthly and pay bills monthly so prefer to look at it that way.

To change to monthly just multiply by 52 and divide by 12. You don't need to consider how many weeks are in the month.

So from what if worked out before -

You're going from:
Income £641 per month
Tax Credits £797 per month
Child Benefit £147 per month
Total £1585 per month

To
Income £1213 per month (approx net)
Tax Credits £676 per month
Child Benefit £147 per month

Less Childcare & Bus £201 per month

Total £1835 per month or £250 per month better off. From April 2017 that'll go down by £86 per month which still leaves you £164 per month better off.

From that you obviously still need to consider the changes in housing/council tax.

planner590

Thanks Darksparkle - with housing benefit taken off, based on what they've estimated I think I'd basically break even. With council tax support removed (which I assume it will be), I lose about £20 a month.

I guess I just don't understand how a pretty decently increased salary can end up with me being out of pocket.

FBaby

It would probably help you to also know what it would be if you go to 30 hours as it might be very much worth the extra hours, especially once your youngest starts school.

missbiggles1

planner590 wrote: »

Thanks Darksparkle - with housing benefit taken off, based on what they've estimated I think I'd basically break even. With council tax support removed (which I assume it will be), I lose about £20 a month.

I guess I just don't understand how a pretty decently increased salary can end up with me being out of pocket.

You don't necessarily become financially better off by earning more but you do become more independent and closer to coming off benefits altogether, which has to be a good thing.:)

planner590

missbiggles1 - you're right, of course, and I'll be more independent and better off in the future when I don't need childcare/don't qualify for any help.

FBaby - It doesn't seem like it's much of a difference on 30 hours unless I'm mistaken, I did a quick calculation on turn2us. There is the option of taking more hours when my youngest starts school but as I'm also studying for a degree (related to the job), I'm hesitant to lose my only child and work free day that I can study. It's one to think about once I see how I'm managing balancing everything, I think.

Darksparkle

Whether 30hrs is better/worse off will depend on income on 30hrs and if that has any impact on childcare costs/travel costs etc.

If on same rate of pay, salary would be £18,000. If not change in childcare & travel then figures would be:

Income £1282 per month (approx net)
Tax Credits £702 per month
Child Benefit £147 per month

Less Childcare & Bus £201 per month

Total £1930 per month (down £87 per month from April 2017).