A worker on £40k per year is £39 pw better off than his unemployed counterpart.

(181 Posts)
orwellian Wed 16-Oct-13 15:40:20

I find this astounding.

A nuclear family in one of the outer London boroughs (2 parents, 2 kids) with husband sole breadwinner will have an income of £30,007 (£577 per week) on a £40k wage plus child benefit of £1,750 per year or £33 per week. Council tax is approx £30 pw. A travelcard from zone 4 into town is £43.60 per week.
Pay in full for school meals.
Pay in full for prescriptions.

Weekly total (minus council tax and travelcard) of: £536.

A nuclear family where both parents are unemployed in London would get;

child benefit x 2: £33
child tax credits x 2: £115
2 bedroom LHA allowance (outer London) of: £236 or 3 bed if children are different sexes and over a certain age: £300
income support/jobseekers allowance: £112.55.
No or little council tax to pay.
Free school meals.
Free prescriptions.

Weekly total of: £497 (2 children both same sex) or £560 (if different sexes or one over ten).

So, the household with one earner on £40k per week is at the most £39 a week better off than their unemployed counterpart and the unemployed family is not affected by the benefit cap unless they claim the 3 bedroom rate of LHA.

Work really doesn't pay does it.

gamerchick Wed 16-Oct-13 15:42:28

Well there you are then OP.. give up work and you'll rake it in. What you complaining about?

Reality Wed 16-Oct-13 15:43:06

I'm not really sure what your point is? Unless it's that wages dont' meet the cost of living, especially in London.

Work does pay, in more ways than just money.

I think you're being just a teeeeensy bit goady there, no?

No, Work doesn't pay as much as it ought to under this government (not that labour are any better). I suspect though that you meant "we should make unemployed people suffer more so that I can feel better about what I have"

Was that it?

gamerchick Wed 16-Oct-13 16:02:35

I must admit according to the OP if benefits match 40k a week then maybe they are a tad high grin

Lizzylou Wed 16-Oct-13 16:06:28

And so the reports go more and more people are using foodbanks every month.
What are these feckless scroungers spending the taxpayers money on?
Wide screen tvs, lots of Christmas presents, fags and booze I would wager!

(just getting the bingo started wink )

orwellian Wed 16-Oct-13 16:08:46

The point is that people in work should be taking home much more than those on benefits. The whole system discourages work.

Income taxes should be reduced and benefits should be replaced with a higher tax threshold so that when people move into work they pay no tax.

Those on benefits should not be paid more for each subsequent child or to level the playing field perhaps all families in work should be paid child tax credits, regardless of how much they earn rather than being punished for working?

ZippityDoodahday Wed 16-Oct-13 16:13:46

It still pays to work, in the long run. There's a huge stigma attached to being on unemployment benefits. Not that many people out there aspire to make a career out of claiming benefits nor raise a family on them.

gamerchick Wed 16-Oct-13 16:15:07

So you want people to suffer so it's worthwhile you working?

Like I said, if it's so cushty.. what's stopping you claiming? Sounds like the life of riley.

ZippityDoodahday Wed 16-Oct-13 16:15:19

I do agree though that our benefit system is too generous. The cost of childcare is also an issue.

TheOrginalPoster Wed 16-Oct-13 16:15:50

The point is obvious.

Why bother getting up early in the pitch black, paying a fortune in travel, get treated like shite by your boss, have loads of work stress laid on you, commute for up to three hours a day and never , ever see your family while the person at home who cant afford childcare get to deal with everything else all on there own for 14 hours a day while trying to work from home.

Why bother having no time to do other jobs so your entire weekend gets taken up catching up on chores so really you never, ever rest.

Its fucking miserable.

Why be exhausted and stressed all the time for no advantage at all ?

THATS THE POINT

JohnnyUtah Wed 16-Oct-13 16:18:54

I think you also can do a similar calculation for a low paid worker on tax credits - there is no point in bettering your earnings through learning skills or getting promotion because everyone ends up on the same income.

noblegiraffe Wed 16-Oct-13 16:19:14

They wouldn't both get child tax credits, so deduct £115 per week from your calculation.

HeeHiles Wed 16-Oct-13 16:21:10

Benefits are not too bloody generous - wages are shit!! That's the problem.

ouryve Wed 16-Oct-13 16:25:49

but noblegiraffe, a difference of £154 per week doesn't give people so much to froth about!

Wallison Thu 17-Oct-13 09:39:30

They wouldn't get £560 a week anyway - as you yourself point out, OP, there is a benefit cap of £500 a week.

Also, it's probably worth noting that the bulk of the benefits payment is housing benefit, which of course is money that the family never sees because they hand it over straight to the landlord. With the LHA cap in place, that is unlikely to cover the full rent. For example, round here LHA is £135 a week for a 2-bedroom place, but even the cheapest 2-bedroom places cost £650 a month to rent - and many of them are £675. So, there's a shortfall of £90-£125 a month. That's not in London, where I'm guessing the disparity is even greater - so let's say that they're having to find say £130 a month or £32.50 a week out of the rest of their benefits just to pay the rent. Council tax won't be a negligible amount any more now either because of the abolition of council tax benefit - say another £40 a month at least. And they'll have to spend something on travel - if nothing else, fares for going food shopping, fares into the job centre and also fares to the mandatory work programme, probably fares to interviews etc. That's before any discretionary travel is taken into account. Not sounding quite so generous now, is it?

A big thing to remember as well is that the earner on £40k is likely paying off a mortgage - the renter on benefits is paying off their landlord's mortgage and will have nothing to show for all of that money 25 years down the line.

But hey, if you want to live like that, then give up your job and go and try to find somewhere to live while you're on the dole - after all, it's an easy life, isn't it?

MrJudgeyPants Thu 17-Oct-13 13:23:52

orwellian Whilst I understand the point you are making, and even feel some sympathy towards your position, you're fecking mental if you think Mumsnet is the sort of place for this debate!

Those on benefits should not be paid more for each subsequent child

This gets trotted out regularly by people who haven't thought it through.

Imagine you have a good job. Enough to support your four children - though your savings have been gradually eaten up by the recession. Suddenly you're out of work and someone says "Well you can't have food for child 3 and 4. You shouldn't have had so many you worthless parasite".

What do you do? take 2 of your kids to the vet to be put down?

MrJudgeyPants Thu 17-Oct-13 15:54:38

Conversely BackOnlyBriefly, if you cant find a job to support yourself, why do you think you'll have more luck securing one that pays enough to support a large family? It's a question of incentives and disincentives to work balanced against incentives and disincentives to have more and more kids and where we choose to draw a line. But on that note, I'm going to take my own advice - I'm outta here!

SoonToBeSix Thu 17-Oct-13 15:59:54

No Op the worker would be £154 a week or £667 a month better off as you doubled the tax credits. Next time check your facts before posting.

KiplingBag Thu 17-Oct-13 16:10:59

BackOnly - the 2 children bit is not about children already born, but being on benefits and then having more children whilst still on them. And I wholeheartedly agree with that.

Anyone can find themselves claiming through not fault of their own., but being on bens and then increasing the family is just plain irresponsible.

Chubfuddler Thu 17-Oct-13 16:24:33

I'm a single working parent with two young children

There may well be single parents who not at work whose household income, taking into account housing benefit and the equivalent value of free school meals, equals mine.

Guess whst?

I don't mind.

JohnnyUtah Thu 17-Oct-13 17:26:09

The unemployed family would get tax credits, noble. They would get CTC but not WTC.

oliveoctagon Thu 17-Oct-13 17:30:20

I would find it embarassing if I didnt work so even if I got double for doing nothing at home I wouldnt take it. In the long run its much better as you have prospects, maintain your self respect and your own life. Its always better to be in work.

Chubfuddler Thu 17-Oct-13 17:33:10

Yes if I didn't work I wouldn't be sitting at home stressless. I'd be shitting myself with fear about benefits cuts and how I was going to cope financially when my children were no longer deemed to be my dependants and my income was drastically cut. And I'd be bored.

Being on benefits sounds terrible and I sincerely sympathise with anyone in that situation.

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