Benefits - does this sound correct?

[PollyIndia]

I'm a lone single parent but have always been lucky enough to be able to manage financially through bits and bobs of consultancy so never had to claim benefits, other than child benefit.
I now am running my own business with a business partner who is a single parent but with involvement and some financial help from her ex. She has been on topup benefits, so takes £1000 from the business then her benefits top her up to £3000 per month.
We have both agreed to take a proper salary of £3000 a month from the business from April so no more benefits, however she didn't take tax into account and says she needs to have £3k take home pay. I have used a basic tax calculator and worked out that even £48k pa so £4k per month doesn't quite give you a take home pay of £3k per month.
I am posting here because lots of people seem to know about this here based on threads I have read. But AIBU to think I have calculated something wrongly. Surely people can't be on an equivalent £48k pa salary through working 16hours per week and taking home £1k per month which is topped up?
I hope I am wrong as the business can afford to sustain that but she wants to come off benefits. Both our sons are pre school age.
I must be wrong, surely?

[PollyIndia]

Sorry, the business CAN'T afford to sustain this, that is meant to say!

[witsender]

Why do you want to change? And if you genuinely want to know, input her details into entitledto.com and see what it says.

[PollyIndia]

Do you mean change from being on benefits? I guess because I am not claiming benefits currently and i need to take a salary now that my savings are used up and she wants to as well. All fair enough. And they also make you jump through loads of hoops, as of course they should, and she doesn't want to go through that again. Also totally fair enough. It's more that I am surprised by the numbers, and think I've got them wrong!

[carrielou2007]

She may be receiving tax credits which can help with cost of registered childcare. It will depend on how much she pays, her salary and how many children. There is no 'top up' to a certain level of salary. For one child I think her salary would be up to 26k above that she would receive nothing and I think the thresholds are dropping again in new tax year.

[AndNowItsSeven]

Yes HB , childcare max £910 a month, tax credits ( two kids) approx £500 a month max and council tax support can add up to £2k a month in addition to the £1k wages.

[AliceInUnderpants]

Not quite sure what you are asking. Surely you decide a salary, pay it and she sorts out what it means WRT benefits?

[AndNowItsSeven]

Sorry just re read if she only has one son then I can't see how the numbers would add up unless her rent is very high.

[Lauren15]

I know nothing about benefits but a gross salary of £3000 per month is surely decent particularly for a household of two people including a little one.

[Witchend]

£3000 a month is £36000 a year, a pretty good salary. I can't believe that standard benefits expect to top up to that level.

[mummymeister]

she cannot expect the new job to pay her exactly what she gets in benefits at the moment. this is something that you should have sorted out well in advance of becoming a business partnership. what if the business has a lean year will she still expect her £3K a month even if it means you get nothing? is she a partner or employed by you? if she is a partner then you need to look closely at your partnership agreement - you must have one of these in place to stop things like this happening. £48k per annum for a 16 hour working week shows why the benefits system is broken imo. Thats £120K for a 40 hour week fgs. I am self employed and took home half of this last year but wouldn't dream of taking benefits as this was just an unusually lean year.

I think your partner has to wise up about what being employed and particularly self employed means. it means sometimes having a good salary which you save some of and sometimes having no salary at all because you are reinvesting in the business or its just a bit quiet.

you pay the salary that the business can afford and that the partnership agreement says is reasonable. if she is a partner then she should know that the extra money is unsustainable. and if she doesn't or doesn't care then why the hell are you in a partnership with her.

[Helennn]

There is no such thing as top-up benefits. There is working and child tax credit but nothing that ensures you have a guaranteed amount coming in every month that I am aware of. I wish there was!

Quite frankly, it sounds as though she hasn't got a clue about money if she forgot to take paying tax into account when demanding how much she wants to take home every month. Can I be your business partner? Sounds cushy!

[Babyroobs]

Even with maximum childcare help and tax creditss she would not get £2k for one child. Something doesn't add up. You would need to have lots of kids and a very low income to receive £2k in top ups !!

[Helennn]

Should have said, benefits are tapered. It is not an either/or case that she is getting full whack or nothing. They are paid depending on what she earns/how much profit the business makes.

[AndNowItsSeven]

Babyroobs with two children, HB at £550 a month and council tax support, childcare and regular tax credits would add up to £2k a month. However almost half of that would be childcare payments.

[SeldomAthleticFC]

These are means-tested benefits. There's no cut off, as such: as your earnings increase, your benefits decrease. There will come a point when they reduce to zero.
Don't worry how much she receives in benefits. Just pay yourselves a fair amount for the job. It's absolutely not your problem.
I find it very hard to believe that she cannot support herself and one child on £36k gross. My DP and I earn that between us and get no benefits despite having two kids.

[Babyroobs]

If she has been taking home £1k a month from the business already, I doubt she would be entitltled £550 housing benefit, especially if only needing to provide a 2 bed house with one child. Unless living in an area with very high rent of course.

[tilder]

I thought that too lauren15.

[Babyroobs]

We have 4 kids and a monthly income of slightly over £3k and just about manage, but then again we have no childcare costs as we work around each other, and a lowish mortgage.

[Pantone363]

Bullshit she gets 2k on top of 1k salary

Just doesn't happen

[DeoGratias]

One reason we all elected the Tories was because of exactly this issue - many of us flogging our guts out working full time with no benefits and others working very short hours kept by the rest of us. It has to stop. Even a £26k a year benefit cap is far far too h igh.

[Sparklycat]

She gets 2000 per month of benefits??? What?? That's tons and surely not right.

[AliceInUnderpants]

One reason we all elected the Tories

We did? I think you'll find "we" voted against the Tories.

[Helennn]

Unless she has a child with major disabilities/health problems I can't see this is right. I earn under 10k, work over the 16 hour threshold, have two kids and get way less than £1,000 in benefits. I do have a mortgage though so don't get housing benefit so that could make a big difference I suppose if she is in rented. I think she is lying to the op to try to get more out of the business.

[Oldraver]

A single parent not working will get benefits that are equal to a £29,000 salary so I could see that as a figure.

A lot of it will be made up of Housing Benefit but a lot of people dont see this as 'benefit'

[BarbaraofSeville]

It doesn't sound right for one DC unless she gets a lot of HB but a relative of mine with 5 children and part time low paid work has a higher income from CB, CTB, council tax benefit and about £600 pm earnings than I do on a £40k salary. She has a mortgage so no HB and no childcare needed.